diff --git a/hooks/gsd-check-update.js b/hooks/gsd-check-update.js
index 90e11ac5..323ce303 100755
--- a/hooks/gsd-check-update.js
+++ b/hooks/gsd-check-update.js
@@ -50,6 +50,18 @@ const child = spawn(process.execPath, ['-e', `
   const path = require('path');
   const { execSync } = require('child_process');
 
+  // Compare semver: true if a > b (a is strictly newer than b)
+  // Strips pre-release suffixes (e.g. '3-beta.1' → '3') to avoid NaN from Number()
+  function isNewer(a, b) {
+    const pa = (a || '').split('.').map(s => Number(s.replace(/-.*/, '')) || 0);
+    const pb = (b || '').split('.').map(s => Number(s.replace(/-.*/, '')) || 0);
+    for (let i = 0; i < 3; i++) {
+      if (pa[i] > pb[i]) return true;
+      if (pa[i] < pb[i]) return false;
+    }
+    return false;
+  }
+
   const cacheFile = ${JSON.stringify(cacheFile)};
   const projectVersionFile = ${JSON.stringify(projectVersionFile)};
   const globalVersionFile = ${JSON.stringify(globalVersionFile)};
@@ -81,7 +93,7 @@ const child = spawn(process.execPath, ['-e', `
             const versionMatch = content.match(/\\/\\/ gsd-hook-version:\\s*(.+)/);
             if (versionMatch) {
               const hookVersion = versionMatch[1].trim();
-              if (hookVersion !== installed && !hookVersion.includes('{{')) {
+              if (isNewer(installed, hookVersion) && !hookVersion.includes('{{')) {
                 staleHooks.push({ file: hookFile, hookVersion, installedVersion: installed });
               }
             } else {
@@ -100,7 +112,7 @@ const child = spawn(process.execPath, ['-e', `
   } catch (e) {}
 
   const result = {
-    update_available: latest && installed !== latest,
+    update_available: latest && isNewer(latest, installed),
     installed,
     latest: latest || 'unknown',
     checked: Math.floor(Date.now() / 1000),
diff --git a/tests/semver-compare.test.cjs b/tests/semver-compare.test.cjs
new file mode 100644
index 00000000..da8806c4
--- /dev/null
+++ b/tests/semver-compare.test.cjs
@@ -0,0 +1,81 @@
+/**
+ * Tests for the isNewer() semver comparison function used in gsd-check-update.js.
+ *
+ * WHY DUPLICATED: isNewer() lives inside a template literal string passed to
+ * spawn(process.execPath, ['-e', `...`]) — it runs in a detached child process
+ * that has no access to the parent module scope. This means it cannot be
+ * require()'d or imported from a shared module. The function is intentionally
+ * inlined in the spawn string so it works in the child process context.
+ *
+ * We mirror the implementation here so the logic is testable. If the hook's
+ * implementation diverges from this copy, the fix is to update this mirror —
+ * not to restructure the hook (which would require changing the spawn pattern
+ * across the entire hook architecture).
+ */
+const { describe, test } = require('node:test');
+const assert = require('node:assert/strict');
+
+// Mirror of isNewer() from hooks/gsd-check-update.js (inside spawn template)
+function isNewer(a, b) {
+  const pa = (a || '').split('.').map(s => Number(s.replace(/-.*/, '')) || 0);
+  const pb = (b || '').split('.').map(s => Number(s.replace(/-.*/, '')) || 0);
+  for (let i = 0; i < 3; i++) {
+    if (pa[i] > pb[i]) return true;
+    if (pa[i] < pb[i]) return false;
+  }
+  return false;
+}
+
+describe('isNewer (semver comparison)', () => {
+  test('newer major version', () => {
+    assert.strictEqual(isNewer('2.0.0', '1.0.0'), true);
+  });
+
+  test('newer minor version', () => {
+    assert.strictEqual(isNewer('1.1.0', '1.0.0'), true);
+  });
+
+  test('newer patch version', () => {
+    assert.strictEqual(isNewer('1.0.1', '1.0.0'), true);
+  });
+
+  test('equal versions', () => {
+    assert.strictEqual(isNewer('1.0.0', '1.0.0'), false);
+  });
+
+  test('older version returns false', () => {
+    assert.strictEqual(isNewer('1.0.0', '2.0.0'), false);
+  });
+
+  test('installed ahead of npm (git install scenario)', () => {
+    assert.strictEqual(isNewer('1.30.0', '1.31.0'), false);
+  });
+
+  test('npm ahead of installed (real update available)', () => {
+    assert.strictEqual(isNewer('1.31.0', '1.30.0'), true);
+  });
+
+  test('pre-release suffix stripped', () => {
+    assert.strictEqual(isNewer('1.0.1-beta.1', '1.0.0'), true);
+  });
+
+  test('pre-release on both sides', () => {
+    assert.strictEqual(isNewer('2.0.0-rc.1', '1.9.0-beta.2'), true);
+  });
+
+  test('null/undefined handled', () => {
+    assert.strictEqual(isNewer(null, '1.0.0'), false);
+    assert.strictEqual(isNewer('1.0.0', null), true);
+    assert.strictEqual(isNewer(null, null), false);
+  });
+
+  test('empty string handled', () => {
+    assert.strictEqual(isNewer('', '1.0.0'), false);
+    assert.strictEqual(isNewer('1.0.0', ''), true);
+  });
+
+  test('two-segment version (missing patch)', () => {
+    assert.strictEqual(isNewer('1.1', '1.0'), true);
+    assert.strictEqual(isNewer('1.0', '1.1'), false);
+  });
+});