diff --git a/.github/workflows/airflow-distributions-tests.yml b/.github/workflows/airflow-distributions-tests.yml
index 3f0cbeff08c24..69d31d60dfc2d 100644
--- a/.github/workflows/airflow-distributions-tests.yml
+++ b/.github/workflows/airflow-distributions-tests.yml
@@ -113,7 +113,7 @@ jobs:
           USE_LOCAL_HATCH: "${{ inputs.use-local-venv }}"
         run: |
           uv tool uninstall hatch || true
-          uv tool install hatch==1.16.0
+          uv tool install hatch==1.16.1
           breeze release-management "${DISTRIBUTION_TYPE}" --distribution-format wheel
         if: ${{ matrix.python-version == inputs.default-python-version }}
       - name: "Verify wheel packages with twine"
diff --git a/dev/breeze/pyproject.toml b/dev/breeze/pyproject.toml
index eeb4f864fe424..30397d00d04d5 100644
--- a/dev/breeze/pyproject.toml
+++ b/dev/breeze/pyproject.toml
@@ -54,7 +54,7 @@ dependencies = [
     "google-auth-httplib2>=0.2.0",
     "google-auth-oauthlib>=1.2.0",
     "gitpython>=3.1.40",
-    "hatch>=1.16.0",
+    "hatch>=1.16.1",
     "inputimeout>=1.0.4",
     "jinja2>=3.1.5",
     "jsonschema>=4.19.1",
diff --git a/dev/breeze/src/airflow_breeze/commands/release_management_commands.py b/dev/breeze/src/airflow_breeze/commands/release_management_commands.py
index 6a0d75ba9fb94..f0d70de7a0103 100644
--- a/dev/breeze/src/airflow_breeze/commands/release_management_commands.py
+++ b/dev/breeze/src/airflow_breeze/commands/release_management_commands.py
@@ -259,7 +259,7 @@ class VersionedFile(NamedTuple):
 GITPYTHON_VERSION = "3.1.45"
 RICH_VERSION = "14.2.0"
 PREK_VERSION = "0.2.19"
-HATCH_VERSION = "1.16.0"
+HATCH_VERSION = "1.16.1"
 PYYAML_VERSION = "6.0.3"
 
 # prek environment and this is done with node, no python installation is needed.
diff --git a/dev/breeze/uv.lock b/dev/breeze/uv.lock
index 90d7007d347df..00cb685f74b32 100644
--- a/dev/breeze/uv.lock
+++ b/dev/breeze/uv.lock
@@ -70,7 +70,7 @@ requires-dist = [
     { name = "google-api-python-client", specifier = ">=2.142.0" },
     { name = "google-auth-httplib2", specifier = ">=0.2.0" },
     { name = "google-auth-oauthlib", specifier = ">=1.2.0" },
-    { name = "hatch", specifier = ">=1.16.0" },
+    { name = "hatch", specifier = ">=1.16.1" },
     { name = "inputimeout", specifier = ">=1.0.4" },
     { name = "jinja2", specifier = ">=3.1.5" },
     { name = "jsonschema", specifier = ">=4.19.1" },
@@ -739,7 +739,7 @@ wheels = [
 
 [[package]]
 name = "hatch"
-version = "1.16.0"
+version = "1.16.1"
 source = { registry = "https://pypi.org/simple" }
 dependencies = [
     { name = "backports-zstd", marker = "python_full_version < '3.14'" },
@@ -760,9 +760,9 @@ dependencies = [
     { name = "uv" },
     { name = "virtualenv" },
 ]
-sdist = { url = "https://files.pythonhosted.org/packages/ce/21/acf913c90554feb5a44a7fadf5f16209a63fa0e767a024f09ccc39d1a85f/hatch-1.16.0.tar.gz", hash = "sha256:bcbf7548a6bab3526ae222f91381d76adccfb5acc656dc09e527621a83e1c02b", size = 5214810, upload-time = "2025-11-27T00:32:44.556Z" }
+sdist = { url = "https://files.pythonhosted.org/packages/4f/03/7fb64d1a85c84843890007b545dd64702ec3ace972df6fc3655badc1f152/hatch-1.16.1.tar.gz", hash = "sha256:87df6a17a0f8dc6f9a8ae459b742cb32ccc844a79634f9072797a2e38af1280f", size = 5215833, upload-time = "2025-11-27T20:06:41.204Z" }
 wheels = [
-    { url = "https://files.pythonhosted.org/packages/7e/b8/58fd4f4b0c371421f703707058d34e11f9458becda77cc294b7bd8c1a4d3/hatch-1.16.0-py3-none-any.whl", hash = "sha256:d7adc16b02991169774d9644822fb65a0f7946b61f0439e85d97b9b819fc8d25", size = 140521, upload-time = "2025-11-27T00:32:42.472Z" },
+    { url = "https://files.pythonhosted.org/packages/b6/39/42d25fed23c4fd4eb3c4ff3f0a7f547ed0d4ad6a1efb0105da0f43768141/hatch-1.16.1-py3-none-any.whl", hash = "sha256:c7c90d122f8fca602d10c9f2176027f935cc6071710d4aec2d94490f6c5ef697", size = 140600, upload-time = "2025-11-27T20:06:39.547Z" },
 ]
 
 [[package]]