diff --git a/builder/chroot-script.sh b/builder/chroot-script.sh
index 4da083c..4a2c1e5 100644
--- a/builder/chroot-script.sh
+++ b/builder/chroot-script.sh
@@ -209,7 +209,7 @@ chmod +x /usr/local/bin/docker-machine
 
 # install Docker Compose via pip
 curl -sSL https://bootstrap.pypa.io/get-pip.py | python
-pip install docker-compose
+pip install docker-compose==${DOCKER_COMPOSE_VERSION}
 
 # # set up Docker APT repository and install docker-engine package
 # #TODO: pin package version to ${DOCKER_ENGINE_VERSION}
diff --git a/builder/test-integration/spec/hypriotos-image/docker-compose_spec.rb b/builder/test-integration/spec/hypriotos-image/docker-compose_spec.rb
index a64e42d..cfb65a8 100644
--- a/builder/test-integration/spec/hypriotos-image/docker-compose_spec.rb
+++ b/builder/test-integration/spec/hypriotos-image/docker-compose_spec.rb
@@ -7,6 +7,6 @@
 end
 
 describe command('docker-compose --version') do
-  its(:stdout) { should match /1.11.2/m }
+  its(:stdout) { should match /1.16.1/m }
   its(:exit_status) { should eq 0 }
 end
diff --git a/versions.config b/versions.config
index ac9dcf7..8a82678 100644
--- a/versions.config
+++ b/versions.config
@@ -12,6 +12,6 @@ export BOOTLOADER_BUILD="20170303-133934"
 export KERNEL_BUILD="20170303-160601"
 export KERNEL_VERSION="4.9.13"
 export DOCKER_ENGINE_VERSION="1.13.1"
-export DOCKER_COMPOSE_VERSION="1.10.0"
+export DOCKER_COMPOSE_VERSION="1.16.1"
 export DOCKER_MACHINE_VERSION="0.12.2"
 export DEVICE_INIT_VERSION="0.1.8"