diff --git a/Actions/IncrementVersionNumber/IncrementVersionNumber.ps1 b/Actions/IncrementVersionNumber/IncrementVersionNumber.ps1
index 0d0730404..f459532cd 100644
--- a/Actions/IncrementVersionNumber/IncrementVersionNumber.ps1
+++ b/Actions/IncrementVersionNumber/IncrementVersionNumber.ps1
@@ -57,8 +57,8 @@ if ($projectList.Count -eq 0 -and $PPprojects.Count -eq 0) {
 $repositorySettingsPath = Join-Path $baseFolder $RepoSettingsFile # $RepoSettingsFile is defined in AL-Go-Helper.ps1
 
 # Increment version number in AL Projects
+$allAppFolders = @()
 if ($projectList.Count -gt 0) {
-    $allAppFolders = @()
     $repoVersionExistsInRepoSettings = Test-SettingExists -settingsFilePath $repositorySettingsPath -settingName 'repoVersion'
     $repoVersionInRepoSettingsWasUpdated = $false
     foreach ($project in $projectList) {
@@ -89,25 +89,13 @@ if ($projectList.Count -gt 0) {
         $projectSettings = ReadSettings -baseFolder $baseFolder -project $project
         ResolveProjectFolders -baseFolder $baseFolder -project $project -projectSettings ([ref] $projectSettings)
 
-        # Set version in app manifests (app.json files)
-        Set-VersionInAppManifests -projectPath $projectPath -projectSettings $projectSettings -newValue $versionNumber
-
-        # Collect all project's app folders
-        $allAppFolders += $projectSettings.appFolders | ForEach-Object { Join-Path $projectPath $_ -Resolve }
-        $allAppFolders += $projectSettings.testFolders | ForEach-Object { Join-Path $projectPath $_ -Resolve }
-        $allAppFolders += $projectSettings.bcptTestFolders | ForEach-Object { Join-Path $projectPath $_ -Resolve }
+        Set-VersionInAppManifests -projectPath $projectPath -projectSettings $projectSettings -newValue $versionNumber -updatedAppFolders ([ref] $allAppFolders)
     }
+}
 
-    if (-not $skipUpdatingDependencies) {
-        # Set dependencies in app manifests
-        if ($allAppFolders.Count -eq 0) {
-            Write-Host "No App folders found for projects $projects"
-        }
-        else {
-            # Set dependencies in app manifests
-            Set-DependenciesVersionInAppManifests -appFolders $allAppFolders
-        }
-    }
+if (-not $skipUpdatingDependencies) {
+    # Set dependencies in app manifests
+    Set-DependenciesVersionInAppManifests -appFolders $allAppFolders
 }
 
 # Increment version number in PowerPlatform Solution
diff --git a/Actions/IncrementVersionNumber/IncrementVersionNumber.psm1 b/Actions/IncrementVersionNumber/IncrementVersionNumber.psm1
index 4cd4f617b..05aee5e47 100644
--- a/Actions/IncrementVersionNumber/IncrementVersionNumber.psm1
+++ b/Actions/IncrementVersionNumber/IncrementVersionNumber.psm1
@@ -189,8 +189,10 @@ function Test-SettingExists {
         Name of the project (relative to the base folder).
     .Parameter newValue
         New version number. If the version number starts with a +, the new version number will be added to the old version number. Else the new version number will replace the old version number.
+    .Parameter updatedAppFolders
+        [ref] Array of paths to the app folders that were updated. This is used to avoid updating the same app folder multiple times.
 #>
-function Set-VersionInAppManifests($projectPath, $projectSettings, $newValue) {
+function Set-VersionInAppManifests($projectPath, $projectSettings, $newValue, [ref] $updatedAppFolders) {
 
     # Check if the project uses repoVersion versioning strategy
     $useRepoVersion = (($projectSettings.PSObject.Properties.Name -eq "versioningStrategy") -and (($projectSettings.versioningStrategy -band 16) -eq 16))
@@ -198,13 +200,22 @@ function Set-VersionInAppManifests($projectPath, $projectSettings, $newValue) {
         $newValue = $projectSettings.repoVersion
     }
 
+    if (-not $updatedAppFolders.Value) {
+        $updatedAppFolders.Value = @()
+    }
+
     $allAppFolders = @($projectSettings.appFolders) + @($projectSettings.testFolders) + @($projectSettings.bcptTestFolders)
     # Set version in app.json files
     $allAppFolders | ForEach-Object {
-        $appFolder = Join-Path $projectPath $_
-        $appJson = Join-Path $appFolder "app.json"
+        $appFolder = Join-Path $projectPath $_ -Resolve
 
-        Set-VersionInSettingsFile -settingsFilePath $appJson -settingName 'version' -newValue $newValue
+        # Update the app only if it's not already updated
+        if (-not ($updatedAppFolders.Value -contains $appFolder)) {
+            $appJson = Join-Path $appFolder "app.json"
+            Set-VersionInSettingsFile -settingsFilePath $appJson -settingName 'version' -newValue $newValue
+
+            $updatedAppFolders.Value += @($appFolder)
+        }
     }
 }
 
diff --git a/RELEASENOTES.md b/RELEASENOTES.md
index 5b2fbf34c..77d47b039 100644
--- a/RELEASENOTES.md
+++ b/RELEASENOTES.md
@@ -7,6 +7,7 @@ AL-Go now offers a dataexplorer dashboard to get started with AL-Go telemetry. A
 - Issue 1770 Wrong type of _projects_ setting in settings schema
 - Issue 1787 Publish to Environment from PR fails in private repos
 - Issue 1722 Check if apps are already installed on a higher version before deploying
+- Issue 1774 Increment Version Number with +0.1 can increment some version numbers twice
 
 ### Add custom jobs to AL-Go workflows
 
diff --git a/Tests/IncrementVersionNumber.Action.Test.ps1 b/Tests/IncrementVersionNumber.Action.Test.ps1
index f9f3290c8..49cbdf445 100644
--- a/Tests/IncrementVersionNumber.Action.Test.ps1
+++ b/Tests/IncrementVersionNumber.Action.Test.ps1
@@ -374,3 +374,113 @@ Describe "Set-VersionInSettingsFile tests" {
         Remove-Item $settingsFile -Force -ErrorAction Ignore
     }
 }
+
+Describe 'Set-VersionInAppManifests tests' {
+    BeforeAll {
+        . (Join-Path -Path $PSScriptRoot -ChildPath "..\Actions\AL-Go-Helper.ps1" -Resolve)
+        Import-Module (Join-Path -Path $PSScriptRoot -ChildPath "..\Actions\IncrementVersionNumber\IncrementVersionNumber.psm1" -Resolve) -Force
+    }
+
+    BeforeEach {
+        $testProjectPath = Join-Path ([System.IO.Path]::GetTempPath()) "TestProject"
+        New-Item -ItemType Directory -Path $testProjectPath -Force | Out-Null
+
+        # Create mock app folders for TestProject
+        $appFolders = @('App1', 'App2', 'Test1', 'BCPTTest1')
+        foreach ($folder in $appFolders) {
+            New-Item -ItemType Directory -Path (Join-Path $testProjectPath $folder) -Force | Out-Null
+            New-Item -ItemType File -Path (Join-Path $testProjectPath $folder 'app.json') -Force | Out-Null
+            $appJsonContent = @{
+                "version" = "0.1"
+                "name" = $folder
+            }
+            $appJsonContent | ConvertTo-Json | Set-Content (Join-Path $testProjectPath $folder 'app.json') -Encoding UTF8
+        }
+
+        [Diagnostics.CodeAnalysis.SuppressMessageAttribute('PSUseDeclaredVarsMoreThanAssignments', 'testProjectSettings', Justification = 'False positive.')]
+        $testProjectSettings = @{
+            appFolders = @($appFolders[0..1]) # App1, App2
+            testFolders = @($appFolders[2]) # Test1
+            bcptTestFolders = @($appFolders[3]) # BCPTTest1
+        }
+
+        # Create another project folder that points to the same app folders
+        $anotherTestProjectPath = Join-Path ([System.IO.Path]::GetTempPath()) "AnotherTestProject"
+        New-Item -ItemType Directory -Path $anotherTestProjectPath -Force | Out-Null
+
+        Push-Location $anotherTestProjectPath
+        [Diagnostics.CodeAnalysis.SuppressMessageAttribute('PSUseDeclaredVarsMoreThanAssignments', 'anotherTestProjectSettings', Justification = 'False positive.')]
+        $anotherTestProjectSettings = @{
+            appFolders = @($appFolders[0..1]) | ForEach-Object { Resolve-Path (Join-Path $testProjectPath $_) -Relative } # App1, App2
+            testFolders = @($appFolders[2]) | ForEach-Object { Resolve-Path (Join-Path $testProjectPath $_) -Relative } # Test1
+            bcptTestFolders = @($appFolders[3]) | ForEach-Object { Resolve-Path (Join-Path $testProjectPath $_) -Relative } # BCPTTest1
+        }
+
+        $anotherTestProjectAppFolder = 'Another TestProjectApp'
+        New-Item -ItemType Directory -Path (Join-Path $anotherTestProjectPath $anotherTestProjectAppFolder) -Force | Out-Null
+        New-Item -ItemType File -Path (Join-Path $anotherTestProjectPath $anotherTestProjectAppFolder 'app.json') -Force | Out-Null
+        $anotherTestProjectAppJsonContent = @{
+            "version" = "0.2"
+            "name" = $anotherTestProjectAppFolder
+        }
+        $anotherTestProjectAppJsonContent | ConvertTo-Json | Set-Content (Join-Path $anotherTestProjectPath $anotherTestProjectAppFolder 'app.json') -Encoding UTF8
+
+        Pop-Location
+    }
+
+    It 'Set-VersionInAppManifests updates all app.json files once and increments the version' {
+        $updatedAppFolders = @()
+        $testProjectSettings = @{
+            versioningStrategy = 0
+            appFolders = @('App1', 'App2')
+            testFolders = @('Test1')
+            bcptTestFolders = @('BCPTTest1')
+        }
+
+        Set-VersionInAppManifests -projectPath $testProjectPath -projectSettings $testProjectSettings -newValue '+0.1' -updatedAppFolders ([ref] $updatedAppFolders)
+
+        $updatedAppFolders.Count | Should -Be 4
+        $updatedAppFolders | Should -Contain (Join-Path $testProjectPath 'App1' -Resolve)
+        $updatedAppFolders | Should -Contain (Join-Path $testProjectPath 'App2' -Resolve)
+        $updatedAppFolders | Should -Contain (Join-Path $testProjectPath 'Test1' -Resolve)
+        $updatedAppFolders | Should -Contain (Join-Path $testProjectPath 'BCPTTest1' -Resolve)
+
+        Set-VersionInAppManifests -projectPath $anotherTestProjectPath -projectSettings $anotherTestProjectSettings -newValue '+0.1' -updatedAppFolders ([ref] $updatedAppFolders)
+
+        $updatedAppFolders.Count | Should -Be 4
+        $updatedAppFolders | Should -Contain (Join-Path $testProjectPath 'App1' -Resolve)
+        $updatedAppFolders | Should -Contain (Join-Path $testProjectPath 'App2' -Resolve)
+        $updatedAppFolders | Should -Contain (Join-Path $testProjectPath 'Test1' -Resolve)
+        $updatedAppFolders | Should -Contain (Join-Path $testProjectPath 'BCPTTest1' -Resolve)
+
+        # Add the new app folder to the settings for anotherTestProject
+        $anotherTestProjectSettings.appFolders += @($anotherTestProjectAppFolder)
+
+        Set-VersionInAppManifests -projectPath $anotherTestProjectPath -projectSettings $anotherTestProjectSettings -newValue '+0.1' -updatedAppFolders ([ref] $updatedAppFolders)
+        $updatedAppFolders.Count | Should -Be 5
+        $updatedAppFolders | Should -Contain (Join-Path $anotherTestProjectPath $anotherTestProjectAppFolder -Resolve)
+        $updatedAppFolders | Should -Contain (Join-Path $testProjectPath 'App1' -Resolve)
+        $updatedAppFolders | Should -Contain (Join-Path $testProjectPath 'App2' -Resolve)
+        $updatedAppFolders | Should -Contain (Join-Path $testProjectPath 'Test1' -Resolve)
+        $updatedAppFolders | Should -Contain (Join-Path $testProjectPath 'BCPTTest1' -Resolve)
+
+        # Verify the app.json files have been updated only once and the version is incremented
+        $appJsonFiles = Get-ChildItem -Path $testProjectPath -Recurse -Filter 'app.json'
+        $appJsonFiles | ForEach-Object {
+            $appJsonContent = Get-Content $_.FullName -Encoding UTF8 | ConvertFrom-Json
+            $appJsonContent.version | Should -Be "0.2" # 0.1 + 0.1
+        }
+
+        $anotherAppJsonFiles = Get-ChildItem -Path $anotherTestProjectPath -Recurse -Filter 'app.json'
+        $anotherAppJsonFiles | ForEach-Object {
+            $appJsonContent = Get-Content $_.FullName -Encoding UTF8 | ConvertFrom-Json
+            $appJsonContent.version | Should -Be "0.3" # 0.2 + 0.1
+        }
+    }
+
+    AfterEach {
+        # Clean up the projects directory
+        Remove-Item -Path $testProjectPath -Recurse -Force -ErrorAction Ignore
+        Remove-Item -Path $anotherTestProjectPath -Recurse -Force -ErrorAction Ignore
+    }
+}