diff --git a/.devcontainer/devcontainer.json b/.devcontainer/devcontainer.json
index 4f62a3a..2134d26 100644
--- a/.devcontainer/devcontainer.json
+++ b/.devcontainer/devcontainer.json
@@ -5,7 +5,7 @@
 	// Or use a Dockerfile or Docker Compose file. More info: https://containers.dev/guide/dockerfile
 	"image": "mcr.microsoft.com/devcontainers/base:noble",
 	"features": {
-		"ghcr.io/devcontainers/features/docker-in-docker:2": {},
+		"ghcr.io/devcontainers/features/docker-in-docker:3": {},
 		"ghcr.io/pablozaiden/devcontainers-features/bun": {}
 	},
 	"remoteEnv": {
diff --git a/examples/complex-workspace/.devcontainer/devcontainer.json b/examples/complex-workspace/.devcontainer/devcontainer.json
index 4e39306..b5151ae 100644
--- a/examples/complex-workspace/.devcontainer/devcontainer.json
+++ b/examples/complex-workspace/.devcontainer/devcontainer.json
@@ -4,8 +4,8 @@
   "image": "mcr.microsoft.com/devcontainers/base:noble",
   "features": {
     "ghcr.io/devcontainers/features/azure-cli:1": {},
-    "ghcr.io/devcontainers/features/docker-in-docker:2": {},
+    "ghcr.io/devcontainers/features/docker-in-docker:3": {},
     "ghcr.io/devcontainers/features/node:1": {},
     "ghcr.io/devcontainers/features/terraform:1": {}
   }
-}
\ No newline at end of file
+}
diff --git a/examples/smoke-workspace/.devcontainer/devcontainer.json b/examples/smoke-workspace/.devcontainer/devcontainer.json
index 482f7d8..cdcc2ff 100644
--- a/examples/smoke-workspace/.devcontainer/devcontainer.json
+++ b/examples/smoke-workspace/.devcontainer/devcontainer.json
@@ -1,7 +1,7 @@
 {
   "name": "devbox-smoke-workspace",
-  "image": "mcr.microsoft.com/devcontainers/base:ubuntu",
+  "image": "mcr.microsoft.com/devcontainers/base:noble",
   "features": {
-    "ghcr.io/devcontainers/features/docker-in-docker:2": {}
+    "ghcr.io/devcontainers/features/docker-in-docker:3": {}
   }
 }
diff --git a/src/templates.ts b/src/templates.ts
index 8d2ed9b..697003d 100644
--- a/src/templates.ts
+++ b/src/templates.ts
@@ -28,7 +28,7 @@ export interface DevboxTemplateSummary {
 
 const BASE_IMAGE = "mcr.microsoft.com/devcontainers/base:noble";
 const BASE_NAME = "noble";
-const DOCKER_IN_DOCKER_FEATURE = "ghcr.io/devcontainers/features/docker-in-docker:2";
+const DOCKER_IN_DOCKER_FEATURE = "ghcr.io/devcontainers/features/docker-in-docker:3";
 const DOTNET_FEATURE = "ghcr.io/devcontainers/features/dotnet:2";
 const GO_FEATURE = "ghcr.io/devcontainers/features/go:1";
 const JAVA_FEATURE = "ghcr.io/devcontainers/features/java:1";
diff --git a/tests/core.test.ts b/tests/core.test.ts
index 2be7e27..1be5d86 100644
--- a/tests/core.test.ts
+++ b/tests/core.test.ts
@@ -436,7 +436,7 @@ describe("resolveWorkspaceConfig", () => {
     expect(rebuildStyleResolution.config).toEqual({
       image: "mcr.microsoft.com/devcontainers/base:noble",
       features: {
-        "ghcr.io/devcontainers/features/docker-in-docker:2": {},
+        "ghcr.io/devcontainers/features/docker-in-docker:3": {},
         "ghcr.io/devcontainers-extra/features/uv:1": {},
       },
     });
diff --git a/tests/examples.test.ts b/tests/examples.test.ts
index e112105..e0b2e48 100644
--- a/tests/examples.test.ts
+++ b/tests/examples.test.ts
@@ -386,9 +386,9 @@ describe("example workspaces (simulated host tools)", () => {
     expect(await readFile(String(fixture.sourceConfigPath), "utf8")).toBe(sourceBefore);
 
     const generatedConfig = await readJson(fixture.generatedConfigPath);
-    expect(generatedConfig.image).toBe("mcr.microsoft.com/devcontainers/base:ubuntu");
+    expect(generatedConfig.image).toBe("mcr.microsoft.com/devcontainers/base:noble");
     expect(generatedConfig.features).toEqual({
-      "ghcr.io/devcontainers/features/docker-in-docker:2": {},
+      "ghcr.io/devcontainers/features/docker-in-docker:3": {},
     });
     expect(generatedConfig.runArgs).toEqual(["--name", "devbox-smoke-workspace-5001", "-p", "5001:5001"]);
     expect(generatedConfig.mounts).toEqual([]);
@@ -485,7 +485,7 @@ describe("example workspaces (simulated host tools)", () => {
     const generatedConfig = await readJson(fixture.generatedConfigPath);
     expect(generatedConfig.features).toEqual({
       "ghcr.io/devcontainers/features/azure-cli:1": {},
-      "ghcr.io/devcontainers/features/docker-in-docker:2": {},
+      "ghcr.io/devcontainers/features/docker-in-docker:3": {},
       "ghcr.io/devcontainers/features/node:1": {},
       "ghcr.io/devcontainers/features/terraform:1": {},
     });
@@ -544,7 +544,7 @@ describe("example workspaces (simulated host tools)", () => {
     const generatedConfig = await readJson(fixture.generatedConfigPath);
     expect(generatedConfig.image).toBe("mcr.microsoft.com/devcontainers/base:noble");
     expect(generatedConfig.features).toEqual({
-      "ghcr.io/devcontainers/features/docker-in-docker:2": {},
+      "ghcr.io/devcontainers/features/docker-in-docker:3": {},
     });
     expect(generatedConfig.postCreateCommand).toBeUndefined();
 
@@ -554,7 +554,7 @@ describe("example workspaces (simulated host tools)", () => {
     expect(state.template.name).toBe("ubuntu");
     expect(state.template.image).toBe("mcr.microsoft.com/devcontainers/base:noble");
     expect(state.template.pinnedReference).toBe(
-      "mcr.microsoft.com/devcontainers/base:noble + ghcr.io/devcontainers/features/docker-in-docker:2",
+      "mcr.microsoft.com/devcontainers/base:noble + ghcr.io/devcontainers/features/docker-in-docker:3",
     );
     expect(state.template.runtimeVersion).toBe("Ubuntu noble");
 
diff --git a/tests/templates.test.ts b/tests/templates.test.ts
index 5180f0b..e17ddc2 100644
--- a/tests/templates.test.ts
+++ b/tests/templates.test.ts
@@ -11,7 +11,7 @@ describe("built-in templates", () => {
         expect.objectContaining({
           image: "mcr.microsoft.com/devcontainers/base:noble",
           features: expect.objectContaining({
-            "ghcr.io/devcontainers/features/docker-in-docker:2": {},
+            "ghcr.io/devcontainers/features/docker-in-docker:3": {},
           }),
         }),
       );
@@ -29,13 +29,13 @@ describe("built-in templates", () => {
     expect(template.base).toBe("noble");
     expect(template.image).toBe("mcr.microsoft.com/devcontainers/base:noble");
     expect(template.pinnedReference).toBe(
-      "mcr.microsoft.com/devcontainers/base:noble + ghcr.io/devcontainers/features/docker-in-docker:2 + ghcr.io/devcontainers/features/node:1 + ghcr.io/devcontainers-extra/features/bun:1",
+      "mcr.microsoft.com/devcontainers/base:noble + ghcr.io/devcontainers/features/docker-in-docker:3 + ghcr.io/devcontainers/features/node:1 + ghcr.io/devcontainers-extra/features/bun:1",
     );
     expect(template.runnerCompatible).toBe(true);
     expect(template.config).toEqual({
       image: "mcr.microsoft.com/devcontainers/base:noble",
       features: {
-        "ghcr.io/devcontainers/features/docker-in-docker:2": {},
+        "ghcr.io/devcontainers/features/docker-in-docker:3": {},
         "ghcr.io/devcontainers/features/node:1": {},
         "ghcr.io/devcontainers-extra/features/bun:1": {},
       },
@@ -51,7 +51,7 @@ describe("built-in templates", () => {
       base: "noble",
       image: "mcr.microsoft.com/devcontainers/base:noble",
       pinnedReference:
-        "mcr.microsoft.com/devcontainers/base:noble + ghcr.io/devcontainers/features/docker-in-docker:2 + ghcr.io/devcontainers/features/node:1 + ghcr.io/devcontainers-extra/features/bun:1",
+        "mcr.microsoft.com/devcontainers/base:noble + ghcr.io/devcontainers/features/docker-in-docker:3 + ghcr.io/devcontainers/features/node:1 + ghcr.io/devcontainers-extra/features/bun:1",
       runtimeVersion: "Node.js + Bun",
       languages: ["node", "bun", "typescript", "javascript"],
       runnerCompatible: true,