diff --git a/VERSION b/VERSION
index be58634173..bd73f47072 100644
--- a/VERSION
+++ b/VERSION
@@ -1 +1 @@
-0.3
+0.4
diff --git a/lib/ansible/__init__.py b/lib/ansible/__init__.py
index 2cef953897..f927a1fd18 100644
--- a/lib/ansible/__init__.py
+++ b/lib/ansible/__init__.py
@@ -14,5 +14,5 @@
 #
 # You should have received a copy of the GNU General Public License
 # along with Ansible.  If not, see <http://www.gnu.org/licenses/>.
-__version__ = '0.3'
+__version__ = '0.4'
 __author__ = 'Michael DeHaan'