diff --git a/changes/version-from-install-root.md b/changes/version-from-install-root.md
new file mode 100644
index 00000000..7076d1ca
--- /dev/null
+++ b/changes/version-from-install-root.md
@@ -0,0 +1,6 @@
+bump: patch
+type: fix
+`ludic version` reports the version of the toolchain it belongs to. It looked for
+`bin/ludicc` and `VERSION` beside the *current* directory, so it answered
+"(version unknown)" from a project — which is the only place a user ever runs it.
+It now resolves the compiler through the install root, like every other command.
diff --git a/tools/ludic-cli/release.ludic b/tools/ludic-cli/release.ludic
index a88ca252..091b6de5 100644
--- a/tools/ludic-cli/release.ludic
+++ b/tools/ludic-cli/release.ludic
@@ -49,13 +49,21 @@ function compute_next(cur: pointer, level: pointer) -> pointer {
   return `{maj}.{min}.{p2}`
 }
 
-# ludic version — report the toolchain version. Prefer the compiler's own --version
-# (proving that path works); fall back to the file if ludicc is not built yet.
+# ludic version — report the version of the toolchain this CLI belongs to.
+#
+# It asks the compiler (proving that path works), addressed through ludic_home()
+# rather than as a relative bin/ludicc: `ludic version` is run from a user's
+# project, not from the toolchain's own directory, and looking beside the current
+# directory found nothing there and reported "(version unknown)" for a perfectly
+# good install.
 function cmd_version() -> int {
-  if is_exec("bin/ludicc") {
-    run("LUDIC_HOME=. bin/ludicc --version")
+  let cc = ludicc()
+  if is_exec(cc) {
+    run(`{cc} --version`)
     return 0
   }
+  let v = read_file(`{ludic_home()}VERSION`)
+  if v != null { print(`ludic {s_trim(v)}`);  return 0 }
   print(`ludic {read_version_or("(version unknown)")}`)
   return 0
 }
diff --git a/tools/ludic-cli/test.ludic b/tools/ludic-cli/test.ludic
index 2665ab30..39fd24d4 100644
--- a/tools/ludic-cli/test.ludic
+++ b/tools/ludic-cli/test.ludic
@@ -84,7 +84,10 @@ function install_layout_case() -> void {
   if not shq(`cd {work}/demo && {envp} ludic test > {work}/test.out 2>&1`) {
     bad2(lbl, capture_line(`tail -1 {work}/test.out`)); return
   }
-  let ver = capture_line(`{envp} ludic version`)
+  # from the project directory, never the repo root: `ludic version` used to
+  # answer from a ./bin and ./VERSION next to the *current* directory, which made
+  # this check pass in the repo while a real install said "(version unknown)".
+  let ver = capture_line(`cd {work}/demo && {envp} ludic version`)
   if ver != `ludic {s_trim(read_file("VERSION"))}` {
     bad2("an installed `ludic version` reports the install's VERSION", `got [{ver}]`); return
   }