diff --git a/Dockerfile b/Dockerfile
index 2d89598..0c49b53 100644
--- a/Dockerfile
+++ b/Dockerfile
@@ -25,6 +25,7 @@ COPY --from=builder /install /usr/local
 COPY backend ./backend
 COPY frontend ./frontend
 COPY config.yaml .
+COPY VERSION .
 COPY plugins ./plugins
 COPY themes ./themes
 COPY generate_password.py .
diff --git a/VERSION b/VERSION
new file mode 100644
index 0000000..26b5dec
--- /dev/null
+++ b/VERSION
@@ -0,0 +1,2 @@
+0.4.0
+
diff --git a/backend/main.py b/backend/main.py
index 17ac833..4b0e2c1 100644
--- a/backend/main.py
+++ b/backend/main.py
@@ -43,6 +43,14 @@ config_path = Path(__file__).parent.parent / "config.yaml"
 with open(config_path, 'r', encoding='utf-8') as f:
     config = yaml.safe_load(f)
 
+# Load version from VERSION file (single source of truth)
+version_path = Path(__file__).parent.parent / "VERSION"
+if not version_path.exists():
+    raise FileNotFoundError("VERSION file not found. Please create it with the current version number.")
+with open(version_path, 'r', encoding='utf-8') as f:
+    version = f.read().strip()
+    config['app']['version'] = version
+
 # Initialize app
 app = FastAPI(
     title=config['app']['name'],
diff --git a/config.yaml b/config.yaml
index 0b5c941..6d0f215 100644
--- a/config.yaml
+++ b/config.yaml
@@ -4,7 +4,6 @@
 app:
   name: "NoteDiscovery"
   tagline: "Your Self-Hosted Knowledge Base"
-  version: "1.0.0"
   
 server:
   host: "0.0.0.0"
diff --git a/frontend/app.js b/frontend/app.js
index 028d3ef..10a2f36 100644
--- a/frontend/app.js
+++ b/frontend/app.js
@@ -35,6 +35,7 @@ function noteApp() {
         // App state
         appName: 'NoteDiscovery',
         appTagline: 'Your Self-Hosted Knowledge Base',
+        appVersion: '0.0.0',
         notes: [],
         currentNote: '',
         currentNoteName: '',
@@ -394,6 +395,7 @@ function noteApp() {
                 const config = await response.json();
                 this.appName = config.name;
                 this.appTagline = config.tagline;
+                this.appVersion = config.version || '0.0.0';
             } catch (error) {
                 console.error('Failed to load config:', error);
             }
diff --git a/frontend/index.html b/frontend/index.html
index 49f7bd2..224c607 100644
--- a/frontend/index.html
+++ b/frontend/index.html
@@ -995,6 +995,8 @@
             <div class="p-3 border-t" style="border-color: var(--border-primary);">
                 <div class="text-xs text-center" style="color: var(--text-tertiary);">
                     <span x-text="notes.length"></span> notes
+                    <span class="mx-1">·</span>
+                    <span x-text="'v' + appVersion"></span>
                 </div>
             </div>
         </div>
diff --git a/release.ps1 b/release.ps1
new file mode 100644
index 0000000..881963d
--- /dev/null
+++ b/release.ps1
@@ -0,0 +1,56 @@
+param(
+    [Parameter(Mandatory=$true)]
+    [string]$Version,
+    
+    [Parameter(Mandatory=$false)]
+    [switch]$SkipCommit = $false
+)
+
+# Validate version format (semantic versioning)
+if ($Version -notmatch '^\d+\.\d+\.\d+$') {
+    Write-Host "Error: Version must be in format X.Y.Z (e.g., 0.4.0)" -ForegroundColor Red
+    exit 1
+}
+
+Write-Host "Releasing version $Version..." -ForegroundColor Green
+
+# Check if working directory is clean (unless skipping commit)
+if (-not $SkipCommit) {
+    $status = git status --porcelain
+    if ($status) {
+        Write-Host "Warning: Working directory has uncommitted changes:" -ForegroundColor Yellow
+        Write-Host $status -ForegroundColor Yellow
+        $response = Read-Host "Continue anyway? (y/N)"
+        if ($response -ne 'y' -and $response -ne 'Y') {
+            Write-Host "Aborted." -ForegroundColor Red
+            exit 1
+        }
+    }
+}
+
+# Update VERSION file (single source of truth)
+Write-Host "Updating VERSION file..." -ForegroundColor Yellow
+$Version | Out-File -FilePath "VERSION" -Encoding utf8 -NoNewline
+
+# Commit changes (unless skipped)
+if (-not $SkipCommit) {
+    Write-Host "Committing version changes..." -ForegroundColor Yellow
+    git add VERSION
+    git commit -m "Bump version to $Version"
+    
+    # Push commits first
+    Write-Host "Pushing commits..." -ForegroundColor Yellow
+    git push
+}
+
+# Create git tag
+Write-Host "Creating git tag v$Version..." -ForegroundColor Yellow
+git tag -a "v$Version" -m "Release version $Version"
+
+# Push tag to remote
+Write-Host "Pushing tag to remote..." -ForegroundColor Yellow
+git push origin "v$Version"
+
+Write-Host "`nRelease $Version completed successfully!" -ForegroundColor Green
+Write-Host "Tag: v$Version" -ForegroundColor Cyan
+