diff --git a/packages/desktop/bin/paseo b/packages/desktop/bin/paseo
index b307a38a7..fefe6c60a 100755
--- a/packages/desktop/bin/paseo
+++ b/packages/desktop/bin/paseo
@@ -44,4 +44,6 @@ fi
 RUNNER_PATH="${RESOURCES_DIR}/app.asar.unpacked/dist/daemon/node-entrypoint-runner.js"
 CLI_ENTRYPOINT="${RESOURCES_DIR}/app.asar/node_modules/@getpaseo/cli/dist/index.js"
 
-exec env ELECTRON_RUN_AS_NODE=1 PASEO_NODE_ENV=production "${APP_EXECUTABLE}" --disable-warning=DEP0040 "${RUNNER_PATH}" node-script "${CLI_ENTRYPOINT}" "$@"
+# PASEO_DESKTOP_MANAGED marks daemons started through this bundled CLI as
+# desktop-managed, so the desktop app restarts them when it upgrades.
+exec env ELECTRON_RUN_AS_NODE=1 PASEO_NODE_ENV=production PASEO_DESKTOP_MANAGED=1 "${APP_EXECUTABLE}" --disable-warning=DEP0040 "${RUNNER_PATH}" node-script "${CLI_ENTRYPOINT}" "$@"
diff --git a/packages/desktop/bin/paseo.cmd b/packages/desktop/bin/paseo.cmd
index c0c3c64c2..862f55e79 100644
--- a/packages/desktop/bin/paseo.cmd
+++ b/packages/desktop/bin/paseo.cmd
@@ -11,5 +11,8 @@ if not exist "%APP_EXECUTABLE%" (
 
 set "ELECTRON_RUN_AS_NODE=1"
 set "PASEO_NODE_ENV=production"
+rem PASEO_DESKTOP_MANAGED marks daemons started through this bundled CLI as
+rem desktop-managed, so the desktop app restarts them when it upgrades.
+set "PASEO_DESKTOP_MANAGED=1"
 "%APP_EXECUTABLE%" --disable-warning=DEP0040 "%RESOURCES_DIR%\app.asar.unpacked\dist\daemon\node-entrypoint-runner.js" node-script "%RESOURCES_DIR%\app.asar\node_modules\@getpaseo\cli\dist\index.js" %*
 exit /b %errorlevel%