diff --git a/src/memory/__tests__/file-path.test.ts b/src/memory/__tests__/file-path.test.ts
index d1a16e4600..19b0f22d85 100644
--- a/src/memory/__tests__/file-path.test.ts
+++ b/src/memory/__tests__/file-path.test.ts
@@ -2,7 +2,35 @@ import { describe, it, expect, beforeEach, afterEach, vi } from 'vitest';
 import { promises as fs } from 'fs';
 import path from 'path';
 import { fileURLToPath } from 'url';
-import { ensureMemoryFilePath, defaultMemoryPath } from '../index.js';
+import { ensureMemoryFilePath, defaultMemoryPath, readPackageVersion } from '../index.js';
+
+describe('readPackageVersion', () => {
+  const testDir = path.dirname(fileURLToPath(import.meta.url));
+  const firstCandidate = path.join(testDir, `missing-package-${Date.now()}.json`);
+  const fallbackPackagePath = path.join(testDir, `package-version-${Date.now()}.json`);
+
+  afterEach(async () => {
+    try {
+      await fs.unlink(fallbackPackagePath);
+    } catch {
+      // Ignore if file doesn't exist
+    }
+  });
+
+  it('reads the server version from package.json', () => {
+    const version = readPackageVersion();
+
+    expect(version).toMatch(/^\d+\.\d+\.\d+$/);
+  });
+
+  it('uses the next package.json candidate when the first path is unavailable', async () => {
+    await fs.writeFile(fallbackPackagePath, JSON.stringify({ version: '2026.1.26' }));
+
+    const version = readPackageVersion([firstCandidate, fallbackPackagePath]);
+
+    expect(version).toBe('2026.1.26');
+  });
+});
 
 describe('ensureMemoryFilePath', () => {
   const testDir = path.dirname(fileURLToPath(import.meta.url));
diff --git a/src/memory/index.ts b/src/memory/index.ts
index 9865c5318e..6012989daa 100644
--- a/src/memory/index.ts
+++ b/src/memory/index.ts
@@ -4,12 +4,34 @@ import { McpServer } from "@modelcontextprotocol/sdk/server/mcp.js";
 import { StdioServerTransport } from "@modelcontextprotocol/sdk/server/stdio.js";
 import { SubscribeRequestSchema, UnsubscribeRequestSchema } from "@modelcontextprotocol/sdk/types.js";
 import { z } from "zod";
-import { promises as fs } from 'fs';
+import { promises as fs, readFileSync } from 'fs';
 import path from 'path';
 import { fileURLToPath } from 'url';
 
+const currentDir = path.dirname(fileURLToPath(import.meta.url));
+
+export function readPackageVersion(
+  packageJsonPaths = [
+    path.join(currentDir, 'package.json'),
+    path.join(currentDir, '..', 'package.json'),
+  ],
+): string {
+  for (const packageJsonPath of packageJsonPaths) {
+    try {
+      const packageJson = JSON.parse(readFileSync(packageJsonPath, 'utf-8')) as { version?: unknown };
+      if (typeof packageJson.version === 'string' && packageJson.version.length > 0) {
+        return packageJson.version;
+      }
+    } catch {
+      // Try the next candidate; source and dist resolve package.json from different directories.
+    }
+  }
+
+  throw new Error('Unable to read @modelcontextprotocol/server-memory package version');
+}
+
 // Define memory file path using environment variable with fallback
-export const defaultMemoryPath = path.join(path.dirname(fileURLToPath(import.meta.url)), 'memory.jsonl');
+export const defaultMemoryPath = path.join(currentDir, 'memory.jsonl');
 
 // Handle backward compatibility: migrate memory.json to memory.jsonl if needed
 export async function ensureMemoryFilePath(): Promise<string> {
@@ -17,11 +39,11 @@ export async function ensureMemoryFilePath(): Promise<string> {
     // Custom path provided, use it as-is (with absolute path resolution)
     return path.isAbsolute(process.env.MEMORY_FILE_PATH)
       ? process.env.MEMORY_FILE_PATH
-      : path.join(path.dirname(fileURLToPath(import.meta.url)), process.env.MEMORY_FILE_PATH);
+      : path.join(currentDir, process.env.MEMORY_FILE_PATH);
   }
   
   // No custom path set, check for backward compatibility migration
-  const oldMemoryPath = path.join(path.dirname(fileURLToPath(import.meta.url)), 'memory.json');
+  const oldMemoryPath = path.join(currentDir, 'memory.json');
   const newMemoryPath = defaultMemoryPath;
   
   try {
@@ -256,7 +278,7 @@ const RelationSchema = z.object({
 // The server instance and tools exposed to Claude
 const server = new McpServer({
   name: "memory-server",
-  version: "0.6.3",
+  version: readPackageVersion(),
 });
 
 const RESOURCE_URI = "memory://knowledge-graph";