diff --git a/pkg/cnab/config-adapter/adapter.go b/pkg/cnab/config-adapter/adapter.go
index e8a5eb7bcf..917a875c6c 100644
--- a/pkg/cnab/config-adapter/adapter.go
+++ b/pkg/cnab/config-adapter/adapter.go
@@ -11,6 +11,7 @@ import (
 	"get.porter.sh/porter/pkg/manifest"
 	"get.porter.sh/porter/pkg/mixin"
 	"get.porter.sh/porter/pkg/tracing"
+	"github.com/Masterminds/semver/v3"
 	"github.com/cnabio/cnab-go/bundle"
 	"github.com/cnabio/cnab-go/bundle/definition"
 )
@@ -71,7 +72,11 @@ func (c *ManifestConverter) ToBundle(ctx context.Context) (cnab.ExtendedBundle,
 	b.Outputs = c.generateBundleOutputs(ctx, &b.Definitions)
 	b.Credentials = c.generateBundleCredentials()
 	b.Images = c.generateBundleImages()
-	b.Custom = c.generateCustomExtensions(&b)
+	custom, err := c.generateCustomExtensions(&b)
+	if err != nil {
+		return cnab.ExtendedBundle{}, err
+	}
+	b.Custom = custom
 	b.RequiredExtensions = c.generateRequiredExtensions(b)
 
 	b.Custom[config.CustomPorterKey] = stamp
@@ -401,10 +406,9 @@ func (c *ManifestConverter) generateBundleImages() map[string]bundle.Image {
 	return images
 }
 
-func (c *ManifestConverter) generateDependencies() *cnab.Dependencies {
-
+func (c *ManifestConverter) generateDependencies() (*cnab.Dependencies, error) {
 	if len(c.Manifest.Dependencies.RequiredDependencies) == 0 {
-		return nil
+		return nil, nil
 	}
 
 	deps := &cnab.Dependencies{
@@ -421,12 +425,18 @@ func (c *ManifestConverter) generateDependencies() *cnab.Dependencies {
 			dependencyRef.Version = &cnab.DependencyVersion{
 				Ranges: []string{dep.Bundle.Version},
 			}
+
+			// If we can detect that prereleases are used in the version, then set AllowPrereleases to true
+			v, err := semver.NewVersion(dep.Bundle.Version)
+			if err == nil {
+				dependencyRef.Version.AllowPrereleases = v.Prerelease() != ""
+			}
 		}
 		deps.Sequence = append(deps.Sequence, dep.Name)
 		deps.Requires[dep.Name] = dependencyRef
 	}
 
-	return deps
+	return deps, nil
 }
 
 func (c *ManifestConverter) generateParameterSources(b *cnab.ExtendedBundle) cnab.ParameterSources {
@@ -576,7 +586,7 @@ func toFloat(v float64) *float64 {
 	return &v
 }
 
-func (c *ManifestConverter) generateCustomExtensions(b *cnab.ExtendedBundle) map[string]interface{} {
+func (c *ManifestConverter) generateCustomExtensions(b *cnab.ExtendedBundle) (map[string]interface{}, error) {
 	customExtensions := map[string]interface{}{
 		cnab.FileParameterExtensionKey: struct{}{},
 	}
@@ -587,7 +597,10 @@ func (c *ManifestConverter) generateCustomExtensions(b *cnab.ExtendedBundle) map
 	}
 
 	// Add the dependency extension
-	deps := c.generateDependencies()
+	deps, err := c.generateDependencies()
+	if err != nil {
+		return nil, err
+	}
 	if deps != nil && len(deps.Requires) > 0 {
 		customExtensions[cnab.DependenciesExtensionKey] = deps
 	}
@@ -603,7 +616,7 @@ func (c *ManifestConverter) generateCustomExtensions(b *cnab.ExtendedBundle) map
 		customExtensions[lookupExtensionKey(ext.Name)] = ext.Config
 	}
 
-	return customExtensions
+	return customExtensions, nil
 }
 
 func (c *ManifestConverter) generateRequiredExtensions(b cnab.ExtendedBundle) []string {
diff --git a/pkg/cnab/config-adapter/adapter_test.go b/pkg/cnab/config-adapter/adapter_test.go
index 67174c0549..208f362615 100644
--- a/pkg/cnab/config-adapter/adapter_test.go
+++ b/pkg/cnab/config-adapter/adapter_test.go
@@ -544,11 +544,12 @@ func TestManifestConverter_generateDependencies(t *testing.T) {
 			Name:   "mysql",
 			Bundle: "getporter/azure-mysql:5.7",
 		}},
-		{"no-ranges", cnab.Dependency{
+		{"no-ranges, uses prerelease", cnab.Dependency{
 			Name:   "ad",
 			Bundle: "getporter/azure-active-directory",
 			Version: &cnab.DependencyVersion{
 				AllowPrereleases: true,
+				Ranges:           []string{"1.0.0-0"},
 			},
 		}},
 		{"with-ranges", cnab.Dependency{
@@ -556,21 +557,17 @@ func TestManifestConverter_generateDependencies(t *testing.T) {
 			Bundle: "getporter/azure-blob-storage",
 			Version: &cnab.DependencyVersion{
 				Ranges: []string{
-					"1.x - 2",
-					"2.1 - 3.x",
+					"1.x - 2,2.1 - 3.x",
 				},
 			},
 		}},
-		{"with-tag", cnab.Dependency{
-			Name:   "dep-with-tag",
-			Bundle: "getporter/dep-bun:v0.1.0",
-		}},
 	}
 
 	for _, tc := range testcases {
+		tc := tc
+
 		t.Run(tc.name, func(t *testing.T) {
 			t.Parallel()
-			tc := tc
 
 			c := config.NewTestConfig(t)
 			c.TestContext.AddTestFile("testdata/porter-with-deps.yaml", config.Name)
@@ -581,9 +578,10 @@ func TestManifestConverter_generateDependencies(t *testing.T) {
 
 			a := NewManifestConverter(c.Config, m, nil, nil)
 
-			deps := a.generateDependencies()
-			require.Len(t, deps.Requires, 4, "incorrect number of dependencies were generated")
-			require.Equal(t, []string{"mysql", "ad", "storage", "dep-with-tag"}, deps.Sequence, "incorrect sequence was generated")
+			deps, err := a.generateDependencies()
+			require.NoError(t, err, "generateDependencies failed")
+			require.Len(t, deps.Requires, 3, "incorrect number of dependencies were generated")
+			require.Equal(t, []string{"mysql", "ad", "storage"}, deps.Sequence, "incorrect sequence was generated")
 
 			var dep *cnab.Dependency
 			for _, d := range deps.Requires {
diff --git a/pkg/cnab/config-adapter/testdata/porter-with-deps.yaml b/pkg/cnab/config-adapter/testdata/porter-with-deps.yaml
index b738bff2bf..0590b59c2e 100644
--- a/pkg/cnab/config-adapter/testdata/porter-with-deps.yaml
+++ b/pkg/cnab/config-adapter/testdata/porter-with-deps.yaml
@@ -12,13 +12,11 @@ dependencies:
     - name: ad
       bundle:
         reference: "getporter/azure-active-directory"
+        version: 1.0.0-0
     - name: storage
       bundle:
         reference: "getporter/azure-blob-storage"
         version: 1.x - 2,2.1 - 3.x
-    - name: dep-with-tag
-      bundle:
-        reference: "getporter/dep-bun:v0.1.0"
 
 mixins:
   - exec