diff --git a/config/manager/kustomization.yaml b/config/manager/kustomization.yaml
index 5e068f13d..f8c76696c 100644
--- a/config/manager/kustomization.yaml
+++ b/config/manager/kustomization.yaml
@@ -6,4 +6,4 @@ resources:
 images:
 - name: fluxcd/source-controller
   newName: fluxcd/source-controller
-  newTag: v1.1.0
+  newTag: v1.2.0
diff --git a/go.mod b/go.mod
index 6c05a4911..f39bf6a3f 100644
--- a/go.mod
+++ b/go.mod
@@ -37,7 +37,7 @@ require (
 	github.com/fluxcd/pkg/tar v0.4.0
 	github.com/fluxcd/pkg/testserver v0.5.0
 	github.com/fluxcd/pkg/version v0.2.2
-	github.com/fluxcd/source-controller/api v1.1.2
+	github.com/fluxcd/source-controller/api v1.2.0
 	github.com/foxcpp/go-mockdns v1.0.0
 	github.com/go-git/go-billy/v5 v5.5.0
 	github.com/go-git/go-git/v5 v5.10.1