diff --git a/CHANGELOG.md b/CHANGELOG.md
index bb6536aed..5a8916ba5 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -2,6 +2,16 @@
 
 All notable changes to this project are documented in this file.
 
+## 0.17.1
+
+**Release date:** 2021-10-13
+
+This prerelease comes with a fix to the readiness status reporting of the notification custom resources.
+
+Fixes:
+* Set observed generation when recording status
+  [#261](https://github.com/fluxcd/notification-controller/pull/261)
+
 ## 0.17.0
 
 **Release date:** 2021-10-08
diff --git a/config/manager/kustomization.yaml b/config/manager/kustomization.yaml
index 6dbdcda68..0b0b93f7a 100644
--- a/config/manager/kustomization.yaml
+++ b/config/manager/kustomization.yaml
@@ -6,4 +6,4 @@ resources:
 images:
   - name: fluxcd/notification-controller
     newName: fluxcd/notification-controller
-    newTag: v0.17.0
+    newTag: v0.17.1
diff --git a/go.mod b/go.mod
index 97a38994a..32c01d2f6 100644
--- a/go.mod
+++ b/go.mod
@@ -10,7 +10,7 @@ require (
 	github.com/Azure/azure-sdk-for-go v53.4.0+incompatible // indirect
 	github.com/Azure/go-amqp v0.13.6 // indirect
 	github.com/containrrr/shoutrrr v0.4.4
-	github.com/fluxcd/notification-controller/api v0.17.0
+	github.com/fluxcd/notification-controller/api v0.17.1
 	github.com/fluxcd/pkg/apis/meta v0.10.0
 	github.com/fluxcd/pkg/runtime v0.12.0
 	github.com/getsentry/sentry-go v0.11.0