diff --git a/actions/setup-cli/install.sh b/actions/setup-cli/install.sh
index 58d73c6805d..8b3d322f685 100755
--- a/actions/setup-cli/install.sh
+++ b/actions/setup-cli/install.sh
@@ -253,15 +253,28 @@ if [ "$TRY_GH_INSTALL" = true ] && command -v gh &> /dev/null; then
         # Verify the installation succeeded
         if gh aw version &> /dev/null; then
             INSTALLED_VERSION=$(gh aw version 2>&1 | grep -oE 'v[0-9]+\.[0-9]+\.[0-9]+' | head -1)
-            print_success "Successfully installed gh-aw using gh extension install"
-            print_info "Installed version: $INSTALLED_VERSION"
             
-            # Set output for GitHub Actions
-            if [ -n "${GITHUB_OUTPUT}" ]; then
-                echo "installed_version=${INSTALLED_VERSION}" >> "${GITHUB_OUTPUT}"
+            # Ensure we could parse an installed version; empty means verification failed
+            if [ -z "$INSTALLED_VERSION" ]; then
+                print_warning "gh extension install completed but the installed gh-aw version could not be determined"
+                print_info "Falling back to manual installation..."
+            else
+                # Verify the installed version matches the requested version (if specific version was requested)
+                if [ "$VERSION" != "latest" ] && [ "$INSTALLED_VERSION" != "$VERSION" ]; then
+                    print_warning "Version mismatch: requested $VERSION but gh extension install installed $INSTALLED_VERSION"
+                    print_info "Falling back to manual installation to install the correct version..."
+                else
+                    print_success "Successfully installed gh-aw using gh extension install"
+                    print_info "Installed version: $INSTALLED_VERSION"
+                    
+                    # Set output for GitHub Actions
+                    if [ -n "${GITHUB_OUTPUT}" ]; then
+                        echo "installed_version=${INSTALLED_VERSION}" >> "${GITHUB_OUTPUT}"
+                    fi
+                    
+                    exit 0
+                fi
             fi
-            
-            exit 0
         else
             print_warning "gh extension install completed but verification failed"
             print_info "Falling back to manual installation..."
diff --git a/actions/setup-cli/install_test.sh b/actions/setup-cli/install_test.sh
index d9773bee4a0..8a22eb09052 100755
--- a/actions/setup-cli/install_test.sh
+++ b/actions/setup-cli/install_test.sh
@@ -109,6 +109,20 @@ test_checksum_validation() {
   fi
 }
 
+# Test 7: Verify version mismatch detection after gh extension install
+test_version_mismatch_detection() {
+  echo ""
+  echo "Test 7: Verify version mismatch detection after gh extension install"
+  
+  # Check if script detects when installed version differs from requested version
+  if grep -q 'INSTALLED_VERSION.*!=.*VERSION' "$SCRIPT_PATH" && \
+     grep -q 'Version mismatch' "$SCRIPT_PATH"; then
+    print_result "Script detects version mismatch after gh extension install" "PASS"
+  else
+    print_result "Script missing version mismatch detection (gh extension install may install wrong version)" "FAIL"
+  fi
+}
+
 # Run all tests
 echo "========================================="
 echo "Testing setup-cli action install.sh"
@@ -120,6 +134,7 @@ test_input_version
 test_gh_install
 test_version_pinning
 test_checksum_validation
+test_version_mismatch_detection
 
 # Summary
 echo ""
diff --git a/install-gh-aw.sh b/install-gh-aw.sh
index 58d73c6805d..8b3d322f685 100755
--- a/install-gh-aw.sh
+++ b/install-gh-aw.sh
@@ -253,15 +253,28 @@ if [ "$TRY_GH_INSTALL" = true ] && command -v gh &> /dev/null; then
         # Verify the installation succeeded
         if gh aw version &> /dev/null; then
             INSTALLED_VERSION=$(gh aw version 2>&1 | grep -oE 'v[0-9]+\.[0-9]+\.[0-9]+' | head -1)
-            print_success "Successfully installed gh-aw using gh extension install"
-            print_info "Installed version: $INSTALLED_VERSION"
             
-            # Set output for GitHub Actions
-            if [ -n "${GITHUB_OUTPUT}" ]; then
-                echo "installed_version=${INSTALLED_VERSION}" >> "${GITHUB_OUTPUT}"
+            # Ensure we could parse an installed version; empty means verification failed
+            if [ -z "$INSTALLED_VERSION" ]; then
+                print_warning "gh extension install completed but the installed gh-aw version could not be determined"
+                print_info "Falling back to manual installation..."
+            else
+                # Verify the installed version matches the requested version (if specific version was requested)
+                if [ "$VERSION" != "latest" ] && [ "$INSTALLED_VERSION" != "$VERSION" ]; then
+                    print_warning "Version mismatch: requested $VERSION but gh extension install installed $INSTALLED_VERSION"
+                    print_info "Falling back to manual installation to install the correct version..."
+                else
+                    print_success "Successfully installed gh-aw using gh extension install"
+                    print_info "Installed version: $INSTALLED_VERSION"
+                    
+                    # Set output for GitHub Actions
+                    if [ -n "${GITHUB_OUTPUT}" ]; then
+                        echo "installed_version=${INSTALLED_VERSION}" >> "${GITHUB_OUTPUT}"
+                    fi
+                    
+                    exit 0
+                fi
             fi
-            
-            exit 0
         else
             print_warning "gh extension install completed but verification failed"
             print_info "Falling back to manual installation..."