diff --git a/x-pack/plugins/fleet/public/applications/fleet/sections/agent_policy/edit_package_policy_page/index.tsx b/x-pack/plugins/fleet/public/applications/fleet/sections/agent_policy/edit_package_policy_page/index.tsx
index 99d470f9f2396..0255d913a753b 100644
--- a/x-pack/plugins/fleet/public/applications/fleet/sections/agent_policy/edit_package_policy_page/index.tsx
+++ b/x-pack/plugins/fleet/public/applications/fleet/sections/agent_policy/edit_package_policy_page/index.tsx
@@ -65,6 +65,8 @@ import type {
 import type { PackagePolicyEditExtensionComponentProps } from '../../../types';
 import { pkgKeyFromPackageInfo, storedPackagePoliciesToAgentInputs } from '../../../services';
 
+import { hasUpgradeAvailable } from './utils';
+
 export const EditPackagePolicyPage = memo(() => {
   const {
     params: { packagePolicyId },
@@ -84,16 +86,16 @@ export const EditPackagePolicyPage = memo(() => {
       // the edit form in an "upgrade" state regardless of whether the user intended to
       // "edit" their policy or "upgrade" it. This ensures the new policy generated will be
       // set to use the latest version of the package, not its current version.
-      isUpgrade={extensionView?.useLatestPackageVersion}
+      forceUpgrade={extensionView?.useLatestPackageVersion}
     />
   );
 });
 
 export const EditPackagePolicyForm = memo<{
   packagePolicyId: string;
-  isUpgrade?: boolean;
+  forceUpgrade?: boolean;
   from?: EditPackagePolicyFrom;
-}>(({ packagePolicyId, isUpgrade = false, from = 'edit' }) => {
+}>(({ packagePolicyId, forceUpgrade = false, from = 'edit' }) => {
   const { application, notifications } = useStartServices();
   const {
     agents: { enabled: isFleetEnabled },
@@ -119,6 +121,14 @@ export const EditPackagePolicyForm = memo<{
     useState<GetOnePackagePolicyResponse['item']>();
   const [dryRunData, setDryRunData] = useState<UpgradePackagePolicyDryRunResponse>();
 
+  const [isUpgrade, setIsUpgrade] = useState<boolean>(false);
+
+  useEffect(() => {
+    if (forceUpgrade) {
+      setIsUpgrade(true);
+    }
+  }, [forceUpgrade]);
+
   const policyId = agentPolicy?.id ?? '';
 
   // Retrieve agent policy, package, and package policy info
@@ -146,11 +156,24 @@ export const EditPackagePolicyForm = memo<{
           setAgentPolicy(agentPolicyData.item);
         }
 
-        const { data: upgradePackagePolicyDryRunData } = await sendUpgradePackagePolicyDryRun([
-          packagePolicyId,
-        ]);
+        const { data: upgradePackagePolicyDryRunData, error: upgradePackagePolicyDryRunError } =
+          await sendUpgradePackagePolicyDryRun([packagePolicyId]);
+
+        if (upgradePackagePolicyDryRunError) {
+          throw upgradePackagePolicyDryRunError;
+        }
+
+        const hasUpgrade = upgradePackagePolicyDryRunData
+          ? hasUpgradeAvailable(upgradePackagePolicyDryRunData)
+          : false;
+
+        // If the dry run data doesn't indicate a difference in version numbers, flip the form back
+        // to its non-upgrade state, even if we were initially set to the upgrade view
+        if (!hasUpgrade) {
+          setIsUpgrade(false);
+        }
 
-        if (upgradePackagePolicyDryRunData) {
+        if (upgradePackagePolicyDryRunData && hasUpgrade) {
           setDryRunData(upgradePackagePolicyDryRunData);
         }
 
@@ -441,7 +464,7 @@ export const EditPackagePolicyForm = memo<{
   const [selectedTab, setSelectedTab] = useState(0);
 
   const layoutProps = {
-    from: extensionView?.useLatestPackageVersion ? 'upgrade-from-extension' : from,
+    from: extensionView?.useLatestPackageVersion && isUpgrade ? 'upgrade-from-extension' : from,
     cancelUrl,
     agentPolicy,
     packageInfo,
diff --git a/x-pack/plugins/fleet/public/applications/fleet/sections/agent_policy/edit_package_policy_page/utils/has_upgrade_available.ts b/x-pack/plugins/fleet/public/applications/fleet/sections/agent_policy/edit_package_policy_page/utils/has_upgrade_available.ts
new file mode 100644
index 0000000000000..d042eddb09334
--- /dev/null
+++ b/x-pack/plugins/fleet/public/applications/fleet/sections/agent_policy/edit_package_policy_page/utils/has_upgrade_available.ts
@@ -0,0 +1,25 @@
+/*
+ * Copyright Elasticsearch B.V. and/or licensed to Elasticsearch B.V. under one
+ * or more contributor license agreements. Licensed under the Elastic License
+ * 2.0; you may not use this file except in compliance with the Elastic License
+ * 2.0.
+ */
+
+import semverGt from 'semver/functions/gt';
+
+import type { UpgradePackagePolicyDryRunResponse } from '../../../../types';
+
+/**
+ * Given a dry run response, determines if a greater version exists in the "proposed"
+ * version of the first package policy in the response.
+ */
+export function hasUpgradeAvailable(dryRunData: UpgradePackagePolicyDryRunResponse) {
+  return (
+    dryRunData &&
+    dryRunData[0].diff &&
+    semverGt(
+      dryRunData[0].diff[1].package?.version ?? '',
+      dryRunData[0].diff[0].package?.version ?? ''
+    )
+  );
+}
diff --git a/x-pack/plugins/fleet/public/applications/fleet/sections/agent_policy/edit_package_policy_page/utils/index.ts b/x-pack/plugins/fleet/public/applications/fleet/sections/agent_policy/edit_package_policy_page/utils/index.ts
new file mode 100644
index 0000000000000..e8206e9dbbf97
--- /dev/null
+++ b/x-pack/plugins/fleet/public/applications/fleet/sections/agent_policy/edit_package_policy_page/utils/index.ts
@@ -0,0 +1,8 @@
+/*
+ * Copyright Elasticsearch B.V. and/or licensed to Elasticsearch B.V. under one
+ * or more contributor license agreements. Licensed under the Elastic License
+ * 2.0; you may not use this file except in compliance with the Elastic License
+ * 2.0.
+ */
+
+export * from './has_upgrade_available';
diff --git a/x-pack/plugins/fleet/public/applications/fleet/sections/agent_policy/upgrade_package_policy_page/index.tsx b/x-pack/plugins/fleet/public/applications/fleet/sections/agent_policy/upgrade_package_policy_page/index.tsx
index 18cf7847cd29b..853caeb0cc826 100644
--- a/x-pack/plugins/fleet/public/applications/fleet/sections/agent_policy/upgrade_package_policy_page/index.tsx
+++ b/x-pack/plugins/fleet/public/applications/fleet/sections/agent_policy/upgrade_package_policy_page/index.tsx
@@ -30,5 +30,5 @@ export const UpgradePackagePolicyPage = memo(() => {
     from = 'upgrade-from-integrations-policy-list';
   }
 
-  return <EditPackagePolicyForm packagePolicyId={packagePolicyId} from={from} isUpgrade />;
+  return <EditPackagePolicyForm packagePolicyId={packagePolicyId} from={from} forceUpgrade />;
 });
diff --git a/x-pack/plugins/fleet/public/applications/integrations/sections/epm/screens/policy/index.tsx b/x-pack/plugins/fleet/public/applications/integrations/sections/epm/screens/policy/index.tsx
index ed8ad166cde9b..e78a2954a86d6 100644
--- a/x-pack/plugins/fleet/public/applications/integrations/sections/epm/screens/policy/index.tsx
+++ b/x-pack/plugins/fleet/public/applications/integrations/sections/epm/screens/policy/index.tsx
@@ -28,7 +28,7 @@ export const Policy = memo(() => {
     <EditPackagePolicyForm
       packagePolicyId={packagePolicyId}
       from="package-edit"
-      isUpgrade={extensionView?.useLatestPackageVersion}
+      forceUpgrade={extensionView?.useLatestPackageVersion}
     />
   );
 });