To be able to install and run extensions, you must edit the file
chrome.manifest
located in the K-Meleon root folder

append this line:
manifest extensions/extensions.manifest

an extensions-enabled chrome.manifest is also available for download at this link:
http://kmext.sourceforge.net/km74/chrome.manifest

save it to the K-Meleon folder to replace the existing chrome.manifest file

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In addition to the extensions listed in this directory which are specific for K-Meleon 74, there are other extensions on the kmext website which should work properly on K-Meleon 74 without modifications.
Just follow the regular steps to install other extensions manually.

For chrome(XUL) extensions, you will need to extract the chrome file xxxx.jar and its xxxx.manifest file to the K-Meleon\Extensions folder

Edit Extensions.manifest in the root\extensions folder and append this line:

xxxx.manifest

where xxxx is the name of the downloaded chrome extension

For non-chrome extensions, just extract the macros or the Tools binaries normally in K-Meleon's folder.

If there are different versions of an extension, download the latest one or the one for K-Meleon 1.6

Note:
The Extensions Manager does not work with K-Meleon 74.