diff --git a/.vscodeignore b/.vscodeignore
index a3c4f5a..972d070 100644
--- a/.vscodeignore
+++ b/.vscodeignore
@@ -11,3 +11,5 @@ node_modules/.cache/**
 .github/**
 .editorconfig
 icon.svg
+scripts/**
+VERSION
diff --git a/README.md b/README.md
index d823419..6355569 100644
--- a/README.md
+++ b/README.md
@@ -59,9 +59,19 @@ loaded. Open any `.tum` file; the **Testium LSP** output channel shows
 the language-server traffic when `testium.trace.server` is set to
 `messages` or `verbose`.
 
+## Versioning
+
+The extension version lives in the `VERSION` file (single source of truth, like
+testium's `src/VERSION`). It must be strict semver `X.Y.Z` — the marketplace and
+Open VSX reject `X.Y`. `npm run sync-version` (run automatically by
+`npm run package` and `vscode:prepublish`) copies it into `package.json`. To
+release, bump `VERSION` and package.
+
 ## Packaging
 
 ```sh
+npm run package                  # sync VERSION -> package.json, then vsce package
+# or, when already in sync:
 npx vsce package                 # produces testium-assist-<v>.vsix
 ```
 
diff --git a/VERSION b/VERSION
new file mode 100644
index 0000000..6e8bf73
--- /dev/null
+++ b/VERSION
@@ -0,0 +1 @@
+0.1.0
diff --git a/package.json b/package.json
index 9903966..bdd052d 100644
--- a/package.json
+++ b/package.json
@@ -51,7 +51,11 @@
         },
         "testium.trace.server": {
           "type": "string",
-          "enum": ["off", "messages", "verbose"],
+          "enum": [
+            "off",
+            "messages",
+            "verbose"
+          ],
           "default": "off",
           "description": "Trace the LSP communication between VSCode and the testium server in the Output panel."
         }
@@ -59,9 +63,11 @@
     }
   },
   "scripts": {
+    "sync-version": "node scripts/sync-version.js",
     "compile": "tsc -p .",
     "watch": "tsc -p . --watch",
-    "vscode:prepublish": "npm run compile"
+    "package": "npm run sync-version && npx --yes @vscode/vsce package",
+    "vscode:prepublish": "npm run sync-version && npm run compile"
   },
   "dependencies": {
     "vscode-languageclient": "^9.0.0"
diff --git a/scripts/sync-version.js b/scripts/sync-version.js
new file mode 100644
index 0000000..f91a783
--- /dev/null
+++ b/scripts/sync-version.js
@@ -0,0 +1,36 @@
+#!/usr/bin/env node
+/*
+ * Sync package.json "version" from the VERSION file — the single source of
+ * truth for the extension version (mirroring testium's src/VERSION).
+ *
+ * Bump the extension by editing VERSION, then run `npm run package` (or any
+ * flow that triggers vscode:prepublish): this script overwrites
+ * package.json#version to match. Unlike testium's VERSION (which may be X.Y),
+ * the marketplace / Open VSX require strict semver X.Y.Z, so VERSION must be
+ * X.Y.Z (optionally with a -prerelease suffix).
+ */
+const fs = require("fs");
+const path = require("path");
+
+const root = path.resolve(__dirname, "..");
+const versionFile = path.join(root, "VERSION");
+const pkgFile = path.join(root, "package.json");
+
+const version = fs.readFileSync(versionFile, "utf8").trim();
+if (!/^\d+\.\d+\.\d+(-[0-9A-Za-z.-]+)?$/.test(version)) {
+  console.error(
+    `sync-version: VERSION '${version}' is not strict semver (X.Y.Z) — ` +
+      `required by the marketplace / Open VSX.`,
+  );
+  process.exit(1);
+}
+
+const pkg = JSON.parse(fs.readFileSync(pkgFile, "utf8"));
+if (pkg.version === version) {
+  console.log(`sync-version: package.json already at ${version}`);
+} else {
+  const previous = pkg.version;
+  pkg.version = version;
+  fs.writeFileSync(pkgFile, JSON.stringify(pkg, null, 2) + "\n");
+  console.log(`sync-version: package.json ${previous} -> ${version}`);
+}