diff --git a/charts/argo-cd/Chart.yaml b/charts/argo-cd/Chart.yaml
index bd9a8de46..b87afdd3a 100644
--- a/charts/argo-cd/Chart.yaml
+++ b/charts/argo-cd/Chart.yaml
@@ -3,7 +3,7 @@ appVersion: v2.7.7
 kubeVersion: ">=1.23.0-0"
 description: A Helm chart for Argo CD, a declarative, GitOps continuous delivery tool for Kubernetes.
 name: argo-cd
-version: 5.39.0
+version: 5.39.1
 home: https://github.com/argoproj/argo-helm
 icon: https://argo-cd.readthedocs.io/en/stable/assets/logo.png
 sources:
@@ -26,5 +26,5 @@ annotations:
     fingerprint: 2B8F22F57260EFA67BE1C5824B11F800CD9D2252
     url: https://argoproj.github.io/argo-helm/pgp_keys.asc
   artifacthub.io/changes: |
-    - kind: added
-      description: Allow configuring Dex's init image resources separately
+    - kind: fixed
+      description: Ensure `app.kubernetes.io/version` label is valid
diff --git a/charts/argo-cd/templates/_common.tpl b/charts/argo-cd/templates/_common.tpl
index f8c84c9c2..4173876c6 100644
--- a/charts/argo-cd/templates/_common.tpl
+++ b/charts/argo-cd/templates/_common.tpl
@@ -38,6 +38,13 @@ Create Argo CD app version
 {{- default .Chart.AppVersion .Values.global.image.tag }}
 {{- end -}}
 
+{{/*
+Return valid version label
+*/}}
+{{- define "argo-cd.versionLabelValue" -}}
+{{ regexReplaceAll "[^-A-Za-z0-9_.]" (include "argo-cd.defaultTag" .) "-" | trunc 63 | trimAll "-" | trimAll "_" | trimAll "." | quote }}
+{{- end -}}
+
 {{/*
 Common labels
 */}}
@@ -46,7 +53,7 @@ helm.sh/chart: {{ include "argo-cd.chart" .context }}
 {{ include "argo-cd.selectorLabels" (dict "context" .context "component" .component "name" .name) }}
 app.kubernetes.io/managed-by: {{ .context.Release.Service }}
 app.kubernetes.io/part-of: argocd
-app.kubernetes.io/version: {{ include "argo-cd.defaultTag" .context }}
+app.kubernetes.io/version: {{ include "argo-cd.versionLabelValue" .context }}
 {{- with .context.Values.global.additionalLabels }}
 {{ toYaml . }}
 {{- end }}