diff --git a/actions/setup/action.yml b/actions/setup/action.yml
index 92629d8dd..72aee0f97 100644
--- a/actions/setup/action.yml
+++ b/actions/setup/action.yml
@@ -33,7 +33,7 @@ inputs:
   knative-version:
     description: 'Version of Knative to install (1.1.0, 1.1.1, etc.)'
     required: true
-    default: '1.8.0'
+    default: '1.8.6'
   registry-name:
     description: 'Name of the registry to install (registry.local)'
     required: true
diff --git a/hack/setup-kind.sh b/hack/setup-kind.sh
index 92376c656..4b86800b1 100755
--- a/hack/setup-kind.sh
+++ b/hack/setup-kind.sh
@@ -34,7 +34,7 @@ done
 
 # Defaults
 K8S_VERSION="v1.25.x"
-KNATIVE_VERSION="1.8.0"
+KNATIVE_VERSION="1.8.6"
 REGISTRY_NAME="registry.local"
 REGISTRY_PORT="5001"
 CLUSTER_SUFFIX="cluster.local"