diff --git a/package.json b/package.json
index a68977143..12bd49167 100644
--- a/package.json
+++ b/package.json
@@ -11,7 +11,7 @@
     "patch:apply": "cd ../../../ && git apply ./src/vs/server/scripts/vscode.patch"
   },
   "devDependencies": {
-    "@coder/nbin": "^1.2.2",
+    "@coder/nbin": "^1.2.3",
     "@types/fs-extra": "^8.0.1",
     "@types/node": "^10.12.12",
     "@types/pem": "^1.9.5",
diff --git a/src/node/cli.ts b/src/node/cli.ts
index ca96a9b9a..5868672f5 100644
--- a/src/node/cli.ts
+++ b/src/node/cli.ts
@@ -196,12 +196,14 @@ const startCli = (): boolean | Promise<void> => {
 export class WrapperProcess {
 	private process?: cp.ChildProcess;
 	private started?: Promise<void>;
+	private currentVersion = product.codeServerVersion;
 
 	public constructor() {
 		ipcMain.onMessage(async (message) => {
-			switch (message) {
+			switch (message.type) {
 				case "relaunch":
-					logger.info("Relaunching...");
+					logger.info(`Relaunching: ${this.currentVersion} -> ${message.version}`);
+					this.currentVersion = message.version;
 					this.started = undefined;
 					if (this.process) {
 						this.process.removeAllListeners();
@@ -233,10 +235,16 @@ export class WrapperProcess {
 	}
 
 	private spawn(): cp.ChildProcess {
-		return cp.spawn(process.argv[0], process.argv.slice(1), {
+		// If we're using loose files then we need to specify the path. If we're in
+		// the binary we need to let the binary determine the path (via nbin) since
+		// it could be different between binaries which presents a problem when
+		// upgrading (different version numbers or different staging directories).
+		const isBinary = (global as any).NBIN_LOADED;
+		return cp.spawn(process.argv[0], process.argv.slice(isBinary ? 2 : 1), {
 			env: {
 				...process.env,
 				LAUNCH_VSCODE: "true",
+				NBIN_BYPASS: undefined,
 				VSCODE_PARENT_PID: process.pid.toString(),
 			},
 			stdio: ["inherit", "inherit", "inherit", "ipc"],
diff --git a/src/node/ipc.ts b/src/node/ipc.ts
index da188234d..c92ea8726 100644
--- a/src/node/ipc.ts
+++ b/src/node/ipc.ts
@@ -6,7 +6,12 @@ enum ControlMessage {
 	okFromChild = "ok<",
 }
 
-export type Message = "relaunch";
+interface RelaunchMessage {
+	type: "relaunch";
+	version: string;
+}
+
+export type Message = RelaunchMessage;
 
 class IpcMain {
 	protected readonly _onMessage = new Emitter<Message>();
@@ -41,11 +46,15 @@ class IpcMain {
 		});
 	}
 
-	public relaunch(): void {
+	public relaunch(version: string): void {
+		this.send({ type: "relaunch", version });
+	}
+
+	private send(message: Message): void {
 		if (!process.send) {
 			throw new Error("Not a child process with IPC enabled");
 		}
-		process.send("relaunch");
+		process.send(message);
 	}
 }
 
diff --git a/src/node/update.ts b/src/node/update.ts
index d85a22c74..878fe1b56 100644
--- a/src/node/update.ts
+++ b/src/node/update.ts
@@ -13,7 +13,7 @@ import { IFileService } from "vs/platform/files/common/files";
 import { ILogService } from "vs/platform/log/common/log";
 import product from "vs/platform/product/common/product";
 import { asJson, IRequestService } from "vs/platform/request/common/request";
-import { AvailableForDownload, State, UpdateType } from "vs/platform/update/common/update";
+import { AvailableForDownload, State, UpdateType, StateType } from "vs/platform/update/common/update";
 import { AbstractUpdateService } from "vs/platform/update/electron-main/abstractUpdateService";
 import { ipcMain } from "vs/server/src/node/ipc";
 import { extract } from "vs/server/src/node/marketplace";
@@ -62,7 +62,9 @@ export class UpdateService extends AbstractUpdateService {
 	}
 
 	public async doQuitAndInstall(): Promise<void> {
-		ipcMain.relaunch();
+		if (this.state.type === StateType.Ready) {
+			ipcMain.relaunch(this.state.update.version);
+		}
 	}
 
 	protected async doCheckForUpdates(context: any): Promise<void> {
diff --git a/yarn.lock b/yarn.lock
index fdef4a1cf..612054412 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -7,10 +7,10 @@
   resolved "https://registry.yarnpkg.com/@coder/logger/-/logger-1.1.8.tgz#416a7221d84161ee35eca9cfa93ba9377639b4ee"
   integrity sha512-NJDC4rZTx0deVYqAxZtJWACq3IrVR59BjFeZebO3i7OfTZZMkkbLsGsCFMnJd5KnX6KjnvvFq4XXtwJ9yf8/YQ==
 
-"@coder/nbin@^1.2.2":
-  version "1.2.2"
-  resolved "https://registry.yarnpkg.com/@coder/nbin/-/nbin-1.2.2.tgz#c5f9aaa2a0e84c2a13a4cce895547efbd66730b7"
-  integrity sha512-1Z6aYBRZRY1AQ2xp0jmoz+TXR8M4WaHa9FfVkOPej0KPJjYtEp18I+/6CmffDtBLxSnIai0rc+AA0VhbjCN/rg==
+"@coder/nbin@^1.2.3":
+  version "1.2.3"
+  resolved "https://registry.yarnpkg.com/@coder/nbin/-/nbin-1.2.3.tgz#793061abc7e1f7e0a9d1b9f854fa8f4121ed4e90"
+  integrity sha512-JGJhkaqCrAF9hQ8e7m29/gbbKqDrBAOJCdjNZv9LKF+67lmHUoJ2QS+eHN+KOtpO4EJeEs4/uq7LSEdT+g3t5w==
   dependencies:
     "@coder/logger" "^1.1.8"
     fs-extra "^7.0.1"