diff --git a/MANIFEST.md b/MANIFEST.md
index eb8ee46..bd0a160 100644
--- a/MANIFEST.md
+++ b/MANIFEST.md
@@ -11,7 +11,7 @@ A basic `manifest.json` with just the required fields looks like this:
 
 ```json
 {
-  "manifest_version": "0.1", // Manifest spec version this manifest conforms to
+  "manifest_version": "0.2", // Manifest spec version this manifest conforms to
   "name": "my-extension", // Machine-readable name (used for CLI, APIs)
   "version": "1.0.0", // Semantic version of your extension
   "description": "A simple MCP extension", // Brief description of what the extension does
@@ -37,7 +37,7 @@ A basic `manifest.json` with just the required fields looks like this:
 
 ```json
 {
-  "manifest_version": "0.1",
+  "manifest_version": "0.2",
   "name": "my-extension",
   "version": "1.0.0",
   "description": "A simple MCP extension",
diff --git a/README.md b/README.md
index 1d768f2..0675ef9 100644
--- a/README.md
+++ b/README.md
@@ -1,8 +1,9 @@
 # MCP Bundles (MCPB)
 
 > **⚠️ IMPORTANT NOTICE: This project is being renamed from DXT (Desktop Extensions) to MCPB (MCP Bundles)**
-> 
+>
 > If you're looking for the DXT tools, they have been renamed to MCPB. Please update your dependencies and tooling:
+>
 > - `dxt` CLI is now `mcpb`
 > - `.dxt` files are now `.mcpb` files
 > - `@anthropic-ai/dxt` package will be moved to `@anthropic-ai/mcpb`
@@ -154,4 +155,4 @@ npm test
 
 # License
 
-This project is licensed under the MIT License - see the [LICENSE](LICENSE) file for details.
\ No newline at end of file
+This project is licensed under the MIT License - see the [LICENSE](LICENSE) file for details.
diff --git a/package.json b/package.json
index 6864e7c..cb00b16 100644
--- a/package.json
+++ b/package.json
@@ -1,7 +1,7 @@
 {
   "name": "@anthropic-ai/mcpb",
   "description": "Tools for building MCP Bundles",
-  "version": "1.1.0",
+  "version": "1.1.1",
   "type": "module",
   "main": "dist/index.js",
   "module": "dist/index.js",
diff --git a/scripts/build-mcpb-schema.js b/scripts/build-mcpb-schema.js
index b24856f..28d813c 100644
--- a/scripts/build-mcpb-schema.js
+++ b/scripts/build-mcpb-schema.js
@@ -1,4 +1,7 @@
-import { McpbManifestSchema, McpbSignatureInfoSchema } from "../dist/schemas.js";
+import {
+  McpbManifestSchema,
+  McpbSignatureInfoSchema,
+} from "../dist/schemas.js";
 import * as z from "zod/v4";
 import fs from "node:fs/promises";
 import path from "node:path";
diff --git a/src/cli/init.ts b/src/cli/init.ts
index 4f104be..5c16885 100644
--- a/src/cli/init.ts
+++ b/src/cli/init.ts
@@ -2,6 +2,7 @@ import { confirm, input, select } from "@inquirer/prompts";
 import { existsSync, readFileSync, writeFileSync } from "fs";
 import { basename, join, resolve } from "path";
 
+import { CURRENT_MANIFEST_VERSION } from "../schemas.js";
 import type { McpbManifest } from "../types.js";
 
 interface PackageJson {
@@ -773,7 +774,7 @@ export function buildManifest(
   const { keywords, license, repository } = optionalFields;
 
   return {
-    manifest_version: "0.1",
+    manifest_version: CURRENT_MANIFEST_VERSION,
     name,
     ...(displayName && displayName !== name
       ? { display_name: displayName }
diff --git a/src/cli/pack.ts b/src/cli/pack.ts
index d095e5c..4e3c670 100644
--- a/src/cli/pack.ts
+++ b/src/cli/pack.ts
@@ -13,7 +13,7 @@ import { basename, join, relative, resolve, sep } from "path";
 
 import { getAllFilesWithCount, readMcpbIgnorePatterns } from "../node/files.js";
 import { validateManifest } from "../node/validate.js";
-import { McpbManifestSchema } from "../schemas.js";
+import { CURRENT_MANIFEST_VERSION, McpbManifestSchema } from "../schemas.js";
 import { getLogger } from "../shared/log.js";
 import { initExtension } from "./init.js";
 
@@ -101,6 +101,17 @@ export async function packExtension({
     return false;
   }
 
+  const manifestVersion = manifest.manifest_version || manifest.dxt_version;
+  if (manifestVersion !== CURRENT_MANIFEST_VERSION) {
+    logger.error(
+      `ERROR: Manifest version mismatch. Expected "${CURRENT_MANIFEST_VERSION}", found "${manifestVersion}"`,
+    );
+    logger.error(
+      `  Please update the manifest_version in your manifest.json to "${CURRENT_MANIFEST_VERSION}"`,
+    );
+    return false;
+  }
+
   // Determine output path
   const extensionName = basename(resolvedPath);
   const finalOutputPath = outputPath
diff --git a/src/node/validate.ts b/src/node/validate.ts
index 19727ff..2f86e5e 100644
--- a/src/node/validate.ts
+++ b/src/node/validate.ts
@@ -25,7 +25,7 @@ export function validateManifest(inputPath: string): boolean {
     const result = McpbManifestSchema.safeParse(manifestData);
 
     if (result.success) {
-      console.log("Manifest is valid!");
+      console.log("Manifest schema validation passes!");
       return true;
     } else {
       console.log("ERROR: Manifest validation failed:\n");
diff --git a/src/schemas-loose.ts b/src/schemas-loose.ts
index 882b1a5..e44ba2a 100644
--- a/src/schemas-loose.ts
+++ b/src/schemas-loose.ts
@@ -79,38 +79,39 @@ export const McpbUserConfigValuesSchema = z.record(
 export const McpbManifestSchema = z
   .object({
     $schema: z.string().optional(),
-    dxt_version: z.string().optional().describe("@deprecated Use manifest_version instead"),
+    dxt_version: z
+      .string()
+      .optional()
+      .describe("@deprecated Use manifest_version instead"),
     manifest_version: z.string().optional(),
-  name: z.string(),
-  display_name: z.string().optional(),
-  version: z.string(),
-  description: z.string(),
-  long_description: z.string().optional(),
-  author: McpbManifestAuthorSchema,
-  repository: McpbManifestRepositorySchema.optional(),
-  homepage: z.string().url().optional(),
-  documentation: z.string().url().optional(),
-  support: z.string().url().optional(),
-  icon: z.string().optional(),
-  screenshots: z.array(z.string()).optional(),
-  server: McpbManifestServerSchema,
-  tools: z.array(McpbManifestToolSchema).optional(),
-  tools_generated: z.boolean().optional(),
-  prompts: z.array(McpbManifestPromptSchema).optional(),
-  prompts_generated: z.boolean().optional(),
-  keywords: z.array(z.string()).optional(),
-  license: z.string().optional(),
-  compatibility: McpbManifestCompatibilitySchema.optional(),
-  user_config: z
-    .record(z.string(), McpbUserConfigurationOptionSchema)
-    .optional(),
+    name: z.string(),
+    display_name: z.string().optional(),
+    version: z.string(),
+    description: z.string(),
+    long_description: z.string().optional(),
+    author: McpbManifestAuthorSchema,
+    repository: McpbManifestRepositorySchema.optional(),
+    homepage: z.string().url().optional(),
+    documentation: z.string().url().optional(),
+    support: z.string().url().optional(),
+    icon: z.string().optional(),
+    screenshots: z.array(z.string()).optional(),
+    server: McpbManifestServerSchema,
+    tools: z.array(McpbManifestToolSchema).optional(),
+    tools_generated: z.boolean().optional(),
+    prompts: z.array(McpbManifestPromptSchema).optional(),
+    prompts_generated: z.boolean().optional(),
+    keywords: z.array(z.string()).optional(),
+    license: z.string().optional(),
+    compatibility: McpbManifestCompatibilitySchema.optional(),
+    user_config: z
+      .record(z.string(), McpbUserConfigurationOptionSchema)
+      .optional(),
   })
-  .refine(
-    (data) => !!(data.dxt_version || data.manifest_version),
-    {
-      message: "Either 'dxt_version' (deprecated) or 'manifest_version' must be provided",
-    }
-  );
+  .refine((data) => !!(data.dxt_version || data.manifest_version), {
+    message:
+      "Either 'dxt_version' (deprecated) or 'manifest_version' must be provided",
+  });
 
 export const McpbSignatureInfoSchema = z.object({
   status: z.enum(["signed", "unsigned", "self-signed"]),
diff --git a/src/schemas.ts b/src/schemas.ts
index adaca4c..1f7ece2 100644
--- a/src/schemas.ts
+++ b/src/schemas.ts
@@ -1,5 +1,7 @@
 import * as z from "zod";
 
+export const CURRENT_MANIFEST_VERSION = "0.2";
+
 export const McpServerConfigSchema = z.strictObject({
   command: z.string(),
   args: z.array(z.string()).optional(),
@@ -79,7 +81,10 @@ export const McpbUserConfigValuesSchema = z.record(
 export const McpbManifestSchema = z
   .strictObject({
     $schema: z.string().optional(),
-    dxt_version: z.string().optional().describe("@deprecated Use manifest_version instead"),
+    dxt_version: z
+      .string()
+      .optional()
+      .describe("@deprecated Use manifest_version instead"),
     manifest_version: z.string().optional(),
     name: z.string(),
     display_name: z.string().optional(),
@@ -106,12 +111,10 @@ export const McpbManifestSchema = z
       .record(z.string(), McpbUserConfigurationOptionSchema)
       .optional(),
   })
-  .refine(
-    (data) => !!(data.dxt_version || data.manifest_version),
-    {
-      message: "Either 'dxt_version' (deprecated) or 'manifest_version' must be provided",
-    }
-  );
+  .refine((data) => !!(data.dxt_version || data.manifest_version), {
+    message:
+      "Either 'dxt_version' (deprecated) or 'manifest_version' must be provided",
+  });
 
 export const McpbSignatureInfoSchema = z.strictObject({
   status: z.enum(["signed", "unsigned", "self-signed"]),
diff --git a/test/cli.test.ts b/test/cli.test.ts
index d250b5c..dd18635 100644
--- a/test/cli.test.ts
+++ b/test/cli.test.ts
@@ -2,6 +2,8 @@ import { execSync } from "node:child_process";
 import fs from "node:fs";
 import { join } from "node:path";
 
+import { CURRENT_MANIFEST_VERSION } from "../src/schemas.js";
+
 interface ExecSyncError extends Error {
   stdout: Buffer;
   stderr: Buffer;
@@ -23,7 +25,7 @@ describe("DXT CLI", () => {
     const result = execSync(`node ${cliPath} validate ${validManifestPath}`, {
       encoding: "utf-8",
     });
-    expect(result).toContain("Manifest is valid!");
+    expect(result).toContain("Manifest schema validation passes!");
   });
 
   it("should reject an invalid manifest", () => {
@@ -91,7 +93,7 @@ describe("DXT CLI", () => {
       fs.writeFileSync(
         join(tempDir, "manifest.json"),
         JSON.stringify({
-          manifest_version: "1.0",
+          manifest_version: CURRENT_MANIFEST_VERSION,
           name: "Test Extension",
           version: "1.0.0",
           description: "A test extension",
@@ -188,7 +190,7 @@ describe("DXT CLI", () => {
         fs.writeFileSync(
           join(tempExecDir, "manifest.json"),
           JSON.stringify({
-            manifest_version: "1.0",
+            manifest_version: CURRENT_MANIFEST_VERSION,
             name: "Test Executable Extension",
             version: "1.0.0",
             description: "A test extension with executable files",
diff --git a/test/init.test.ts b/test/init.test.ts
index 68730ce..f79191e 100644
--- a/test/init.test.ts
+++ b/test/init.test.ts
@@ -10,6 +10,7 @@ import {
   getDefaultRepositoryUrl,
   readPackageJson,
 } from "../src/cli/init.js";
+import { CURRENT_MANIFEST_VERSION } from "../src/schemas.js";
 
 // Mock the fs module
 jest.mock("fs", () => ({
@@ -217,7 +218,7 @@ describe("init functions", () => {
       );
 
       expect(manifest).toEqual({
-        manifest_version: "0.1",
+        manifest_version: CURRENT_MANIFEST_VERSION,
         name: "test-extension",
         version: "1.0.0",
         description: "Test description",
@@ -303,7 +304,7 @@ describe("init functions", () => {
       );
 
       expect(manifest).toEqual({
-        manifest_version: "0.1",
+        manifest_version: CURRENT_MANIFEST_VERSION,
         name: "test-extension",
         display_name: "Test Extension",
         version: "1.0.0",