diff --git a/server/src/__tests__/version.test.ts b/server/src/__tests__/version.test.ts
new file mode 100644
index 0000000000..9d8f9d8b1f
--- /dev/null
+++ b/server/src/__tests__/version.test.ts
@@ -0,0 +1,60 @@
+import { describe, expect, it, vi } from "vitest";
+import { parseGitDescribeVersion, resolveServerVersion } from "../version.js";
+
+describe("parseGitDescribeVersion", () => {
+  it("reports drift from the nearest release tag as a PEP 440 local version", () => {
+    expect(parseGitDescribeVersion("v2026.626.0-58-g518fc71ce\n")).toBe(
+      "2026.626.0+58.git.518fc71ce",
+    );
+  });
+
+  it("collapses clean on-tag checkouts to the release version", () => {
+    expect(parseGitDescribeVersion("v2026.626.0-0-g012345678\n")).toBe("2026.626.0");
+  });
+
+  it("adds dirty state to the local version segment", () => {
+    expect(parseGitDescribeVersion("v2026.626.0-58-g518fc71ce-dirty\n")).toBe(
+      "2026.626.0+58.git.518fc71ce.dirty",
+    );
+  });
+
+  it("returns null for unparseable describe output so callers can fall back", () => {
+    expect(parseGitDescribeVersion("canary/v2026.706.0-canary.1")).toBeNull();
+  });
+
+  it("appends dirty suffix even when on-tag (zero commits since tag)", () => {
+    expect(parseGitDescribeVersion("v2026.626.0-0-g012345678-dirty\n")).toBe(
+      "2026.626.0+0.git.012345678.dirty",
+    );
+  });
+});
+
+describe("resolveServerVersion", () => {
+  it("returns the parsed git-derived version when git describe succeeds", () => {
+    expect(
+      resolveServerVersion({
+        packageVersion: "2026.706.0",
+        gitDescribeCommand: () => "v2026.626.0-58-g518fc71ce\n",
+        debugLog: vi.fn(),
+      }),
+    ).toBe("2026.626.0+58.git.518fc71ce");
+  });
+
+  it("falls back to package version without throwing when git is unavailable", () => {
+    const debugLog = vi.fn();
+
+    expect(
+      resolveServerVersion({
+        packageVersion: "2026.706.0",
+        gitDescribeCommand: () => {
+          throw new Error("fatal: not a git repository");
+        },
+        debugLog,
+      }),
+    ).toBe("2026.706.0");
+    expect(debugLog).toHaveBeenCalledWith(
+      expect.objectContaining({ reason: "git_describe_unavailable" }),
+      "falling back to package version for server version",
+    );
+  });
+});
diff --git a/server/src/version.ts b/server/src/version.ts
index 39a16a4cfe..1dfff0aa1a 100644
--- a/server/src/version.ts
+++ b/server/src/version.ts
@@ -1,10 +1,78 @@
 import { createRequire } from "node:module";
+import { execFileSync } from "node:child_process";
 
 type PackageJson = {
   version?: string;
 };
 
-const require = createRequire(import.meta.url);
-const pkg = require("../package.json") as PackageJson;
+type GitDescribeCommand = () => string;
+type DebugLog = (fields: Record<string, unknown>, message: string) => void;
 
-export const serverVersion = pkg.version ?? "0.0.0";
+const requirePackage = createRequire(import.meta.url);
+const pkg = requirePackage("../package.json") as PackageJson;
+
+const GIT_DESCRIBE_RE =
+  /^v(?<publicVersion>\d+\.\d+\.\d+)-(?<commitsSinceTag>\d+)-g(?<sha>[0-9a-f]{7,40})(?<dirty>-dirty)?$/i;
+
+function defaultDebugLog(fields: Record<string, unknown>, message: string): void {
+  console.debug(message, fields);
+}
+
+function defaultGitDescribeCommand(): string {
+  return execFileSync(
+    "git",
+    ["describe", "--tags", "--match", "v*", "--long", "--dirty"],
+    {
+      encoding: "utf8",
+      stdio: ["ignore", "pipe", "ignore"],
+      timeout: 1500,
+    },
+  );
+}
+
+export function parseGitDescribeVersion(output: string): string | null {
+  const match = output.trim().match(GIT_DESCRIBE_RE);
+  if (!match?.groups) return null;
+
+  const publicVersion = match.groups.publicVersion;
+  const commitsSinceTag = match.groups.commitsSinceTag;
+  const sha = match.groups.sha;
+  const isDirty = Boolean(match.groups.dirty);
+
+  if (commitsSinceTag === "0" && !isDirty) {
+    return publicVersion;
+  }
+
+  return `${publicVersion}+${commitsSinceTag}.git.${sha}${isDirty ? ".dirty" : ""}`;
+}
+
+export function resolveServerVersion(
+  opts: {
+    gitDescribeCommand?: GitDescribeCommand;
+    packageVersion?: string;
+    debugLog?: DebugLog;
+  } = {},
+): string {
+  const packageVersion = opts.packageVersion ?? pkg.version ?? "0.0.0";
+  const gitDescribeCommand = opts.gitDescribeCommand ?? defaultGitDescribeCommand;
+  const debugLog = opts.debugLog ?? defaultDebugLog;
+
+  try {
+    const parsedVersion = parseGitDescribeVersion(gitDescribeCommand());
+    if (parsedVersion) return parsedVersion;
+
+    debugLog(
+      { reason: "invalid_git_describe" },
+      "falling back to package version for server version",
+    );
+  } catch (err) {
+    debugLog(
+      { err, reason: "git_describe_unavailable" },
+      "falling back to package version for server version",
+    );
+  }
+
+  return packageVersion;
+}
+
+export const serverVersion = resolveServerVersion();