diff --git a/confluent_client/VERSION b/confluent_client/VERSION
deleted file mode 100644
index 5625e59d..00000000
--- a/confluent_client/VERSION
+++ /dev/null
@@ -1 +0,0 @@
-1.2
diff --git a/confluent_server/VERSION b/confluent_server/VERSION
deleted file mode 100644
index 5625e59d..00000000
--- a/confluent_server/VERSION
+++ /dev/null
@@ -1 +0,0 @@
-1.2
diff --git a/confluent_server/makesetup b/confluent_server/makesetup
index 490da3b7..645fd2bf 100755
--- a/confluent_server/makesetup
+++ b/confluent_server/makesetup
@@ -1,3 +1,8 @@
 cd `dirname $0`
-VERSION=`cat VERSION`
+VERSION=`git tag -l|tail -n 1`
+NUMCOMMITS=`git rev-list $VERSION..HEAD|wc -l`
+if [ "$NUMCOMMITS" -ne 0 ]; then
+    VERSION=$VERSION.dev$NUMCOMMITS.g`git rev-parse --short HEAD`
+fi
+echo $VERSION > VERSION
 sed -e "s/#VERSION#/$VERSION/" setup.py.tmpl > setup.py