diff --git a/config.tf b/config.tf
index 53305d6a45..eede584869 100644
--- a/config.tf
+++ b/config.tf
@@ -23,7 +23,7 @@ variable "tectonic_container_images" {
     identity                        = "quay.io/coreos/dex:v2.4.1"
     container_linux_update_operator = "quay.io/coreos/container-linux-update-operator:v0.2.1"
     kube_version_operator           = "quay.io/coreos/kube-version-operator:v1.6.7"
-    tectonic_channel_operator       = "quay.io/coreos/tectonic-channel-operator:0.3.6"
+    tectonic_channel_operator       = "quay.io/coreos/tectonic-channel-operator:0.3.7"
     node_agent                      = "quay.io/coreos/node-agent:787844277099e8c10d617c3c807244fc9f873e46"
     prometheus_operator             = "quay.io/coreos/prometheus-operator:v0.10.2"
     tectonic_monitoring_auth        = "quay.io/coreos/tectonic-monitoring-auth:v0.0.1"
@@ -64,7 +64,7 @@ variable "tectonic_versions" {
     alertmanager  = "v0.7.1"
     monitoring    = "1.3.0"
     kubernetes    = "1.6.7+tectonic.1"
-    tectonic      = "1.6.7-tectonic.1"
+    tectonic      = "1.6.7-tectonic.2"
     tectonic-etcd = "0.0.1"
   }
 }
diff --git a/modules/update-payload/payload.json b/modules/update-payload/payload.json
index 46bc9766c4..e39ab1531c 100644
--- a/modules/update-payload/payload.json
+++ b/modules/update-payload/payload.json
@@ -1,5 +1,5 @@
 {
-  "version": "1.6.7-tectonic.1",
+  "version": "1.6.7-tectonic.2",
   "deployments": [
     {
       "apiVersion": "extensions/v1beta1",
@@ -139,7 +139,7 @@
                     }
                   }
                 ],
-                "image": "quay.io/coreos/tectonic-channel-operator:0.3.6",
+                "image": "quay.io/coreos/tectonic-channel-operator:0.3.7",
                 "name": "tectonic-channel-operator",
                 "resources": {
                   "limits": {