diff --git a/lib/sugar/activity/registry.py b/lib/sugar/activity/registry.py
index c21d4a50..ac672d5e 100644
--- a/lib/sugar/activity/registry.py
+++ b/lib/sugar/activity/registry.py
@@ -29,15 +29,17 @@ def _activity_info_from_dict(info_dict):
     if not info_dict:
         return None
     return ActivityInfo(info_dict['name'], info_dict['icon'],
-                        info_dict['bundle_id'], info_dict['path'],
-                        info_dict['show_launcher'], info_dict['command'])
+                        info_dict['bundle_id'], info_dict['version'],
+                        info_dict['path'], info_dict['show_launcher'],
+                        info_dict['command'])
 
 class ActivityInfo(object):
-    def __init__(self, name, icon, bundle_id,
+    def __init__(self, name, icon, bundle_id, version,
                  path, show_launcher, command):
         self.name = name
         self.icon = icon
         self.bundle_id = bundle_id
+        self.version = version
         self.path = path
         self.command = command
         self.show_launcher = show_launcher
@@ -146,6 +148,8 @@ class ActivityRegistry(gobject.GObject):
         self._mime_type_to_activities.clear()
 
     def remove_bundle(self, bundle_path):
+        self._service_name_to_activity_info.clear()
+        self._mime_type_to_activities.clear()
         return self._registry.RemoveBundle(bundle_path)
 
     def _activity_removed_cb(self, info_dict):
diff --git a/lib/sugar/bundle/activitybundle.py b/lib/sugar/bundle/activitybundle.py
index ce1510f0..ee72f809 100644
--- a/lib/sugar/bundle/activitybundle.py
+++ b/lib/sugar/bundle/activitybundle.py
@@ -22,10 +22,15 @@ import locale
 import os
 import tempfile
 
-from sugar.bundle.bundle import Bundle, MalformedBundleException
+from sugar.bundle.bundle import Bundle, MalformedBundleException, \
+    AlreadyInstalledException, RegistrationException, \
+    NotInstalledException
+
 from sugar import activity
 from sugar import env
 
+import logging
+
 class ActivityBundle(Bundle):
     """A Sugar activity bundle
     
@@ -204,8 +209,16 @@ class ActivityBundle(Bundle):
         else:
             return False
 
+    def need_upgrade(self):
+        act = activity.get_registry().get_activity(self._bundle_id)
+        if act is None or act.version != self._activity_version:
+            return True
+        else:
+            return False
+
     def install(self):
-        if self.is_installed():
+        act = activity.get_registry().get_activity(self._bundle_id)
+        if act is not None and act.path.startswith(env.get_user_activities_path()):
             raise AlreadyInstalledException
 
         install_dir = env.get_user_activities_path()
@@ -250,12 +263,21 @@ class ActivityBundle(Bundle):
         if not activity.get_registry().add_bundle(install_path):
             raise RegistrationException
 
-    def uninstall(self):
+    def uninstall(self, force=False):
         if self._unpacked:
             install_path = self._path
         else:
             if not self.is_installed():
                 raise NotInstalledException
+
+            act = activity.get_registry().get_activity(self._bundle_id)
+            if not force and act.version != self._activity_version:
+                logging.warning('Not uninstalling because different bundle present')
+                return
+            elif not act.path.startswith(env.get_user_activities_path()):
+                logging.warning('Not uninstalling system activity')
+                return
+
             install_path = os.path.join(env.get_user_activities_path(),
                                         self._zip_root_dir)
 
@@ -283,3 +305,17 @@ class ActivityBundle(Bundle):
         if not activity.get_registry().remove_bundle(install_path):
             raise RegistrationException
 
+    def upgrade(self):
+        act = activity.get_registry().get_activity(self._bundle_id)
+        if act is None:
+            logging.warning('Activity not installed')
+        elif act.path.startswith(env.get_user_activities_path()):
+            try:
+                self.uninstall(force=True)
+            except Exception, e:
+                logging.warning('Uninstall failed (%s), still trying to install newer bundle', e)
+        else:
+            logging.warning('Unable to uninstall system activity, installing upgraded version in user activities')
+
+        self.install()
+
diff --git a/lib/sugar/datastore/datastore.py b/lib/sugar/datastore/datastore.py
index 5238d18b..334c866a 100644
--- a/lib/sugar/datastore/datastore.py
+++ b/lib/sugar/datastore/datastore.py
@@ -160,10 +160,16 @@ class DSObject(object):
             if bundle_id is not None:
                 raise ValueError('Object is a bundle, cannot be resumed as an activity.')
 
+            logging.debug('Creating activity bundle')
             bundle = ActivityBundle(self.file_path)
             if not bundle.is_installed():
+                logging.debug('Installing activity bundle')
                 bundle.install()
+            elif bundle.need_upgrade():
+                logging.debug('Upgrading activity bundle')
+                bundle.upgrade()
 
+            logging.debug('activityfactory.creating bundle with id %r', bundle.get_bundle_id())
             activityfactory.create(bundle.get_bundle_id())
         else:
             if not self.get_activities() and bundle_id is None:
diff --git a/services/shell/activityregistryservice.py b/services/shell/activityregistryservice.py
index b4323ee2..9c2dda7f 100644
--- a/services/shell/activityregistryservice.py
+++ b/services/shell/activityregistryservice.py
@@ -113,6 +113,7 @@ class ActivityRegistry(dbus.service.Object):
         return {'name': bundle.get_name(),
                 'icon': bundle.get_icon(),
                 'bundle_id': bundle.get_bundle_id(),
+                'version': bundle.get_activity_version(),
                 'path': bundle.get_path(),
                 'command': bundle.get_command(),
                 'show_launcher': bundle.get_show_launcher()}
diff --git a/shell/view/frame/activitiestray.py b/shell/view/frame/activitiestray.py
index 6f8e89e9..3dbf9552 100644
--- a/shell/view/frame/activitiestray.py
+++ b/shell/view/frame/activitiestray.py
@@ -129,7 +129,7 @@ class ActivitiesTray(hippo.CanvasBox):
 
     def _activity_removed_cb(self, activity_registry, activity_info):
         for item in self._tray.get_children():
-            if item.get_bundle_id() == activity_info.service_name:
+            if item.get_bundle_id() == activity_info.bundle_id:
                 self._tray.remove_item(item)
                 return