Embodiments relate to systems and methods for automatic upgrade and downgrade in package update operations. A physical or virtual client machine can host an installed software distribution including a set of installed software packages, such as an operating system, application, and/or other software. A package manager on the client can manage the set of installed packages, and report the installed distribution including version and component packages to one or more package servers. When a distribution upgrade is initiated, the package manager and/or other distribution logic can analyze the target distribution, to determine whether each package in the target distribution represents the most-current version of each component package. Packages which represent the most-current can be installed. Packages which do not represent the most-current version, e.g. due to slippage in vendor updates or versions, can be substituted with a most-current version automatically retrieved from a software repository or other source.