diff --git a/tests/functional/charms/k8s-2-configurable/charmcraft.yaml b/tests/functional/charms/k8s-2-configurable/charmcraft.yaml
index b8dd0fa..10e1df8 100644
--- a/tests/functional/charms/k8s-2-configurable/charmcraft.yaml
+++ b/tests/functional/charms/k8s-2-configurable/charmcraft.yaml
@@ -46,4 +46,4 @@ resources:
     # used by the 'canonical/charming-actions' GitHub action for automated releases.
     # The test_deploy function in tests/integration/test_charm.py reads upstream-source
     # to determine which OCI image to use when running the charm's integration tests.
-    upstream-source: ghcr.io/canonical/api_demo_server:1.0.3
+    upstream-source: ghcr.io/canonical/api_demo_server:1.0.4
diff --git a/tests/functional/test_container.py b/tests/functional/test_container.py
index d5dcf5f..ea04090 100644
--- a/tests/functional/test_container.py
+++ b/tests/functional/test_container.py
@@ -49,7 +49,7 @@ def test_server_process(k8s_2_configurable):
         "./placeholder.charm",
         "fastapi-demo",
         "--resource",
-        "demo-server-image=ghcr.io/canonical/api_demo_server:1.0.3",
+        "demo-server-image=ghcr.io/canonical/api_demo_server:1.0.4",
     ]
     subprocess.run(
         command,