diff --git a/lib/asg-runner-stack.ts b/lib/asg-runner-stack.ts
index 1fb5e22..6d841d1 100644
--- a/lib/asg-runner-stack.ts
+++ b/lib/asg-runner-stack.ts
@@ -290,6 +290,20 @@ export class ASGRunnerStack extends cdk.Stack implements IASGRunnerStack {
       this.createTagBasedResourceGroup(resourceGroupName, resourceGroupDescription, asg.autoScalingGroupName);
     }
 
+    // Make the ASG always launch from the launch template's newest version ($Latest)
+    // instead of a version number pinned at synth time. This ensures that new launches,
+    // scale-outs, and instance refreshes pick up the most recent launch template version
+    // whenever a change is deployed (or a new LT version is otherwise created). The L2
+    // AutoScalingGroup pins Version to LatestVersionNumber captured at deploy time, so we
+    // override the CfnAutoScalingGroup's LaunchTemplate.Version to the literal "$Latest".
+    // Note: $Latest affects NEW instance launches; already-running instances are replaced
+    // by the rolling UpdatePolicy above on deploy.
+    const cfnAsg = asg.node.defaultChild as autoscaling.CfnAutoScalingGroup;
+    cfnAsg.addPropertyOverride('LaunchTemplate.LaunchTemplateId', lt.launchTemplateId);
+    cfnAsg.addPropertyOverride('LaunchTemplate.Version', '$Latest');
+    // Remove the L2-generated LaunchTemplateName if present to avoid specifying both id and name.
+    cfnAsg.addPropertyDeletionOverride('LaunchTemplate.LaunchTemplateName');
+
     if (props.stage === ENVIRONMENT_STAGE.Beta) {
       new autoscaling.CfnScheduledAction(this, 'SpinDownBetaInstances', {
         autoScalingGroupName: asg.autoScalingGroupName,
diff --git a/test/asg-runner-stack.test.ts b/test/asg-runner-stack.test.ts
index a7140ca..6430879 100644
--- a/test/asg-runner-stack.test.ts
+++ b/test/asg-runner-stack.test.ts
@@ -120,6 +120,21 @@ describe('ASGRunnerStack test', () => {
       });
   });
 
+  it('references the launch template $Latest version by id (not a pinned version or name)', () => {
+    // The stack overrides the ASG's LaunchTemplate to reference the launch template by id
+    // at its $Latest version, so new launches always pick up the newest LT version rather
+    // than a version number pinned at synth time.
+    templates.forEach((template) => {
+      template.hasResourceProperties('AWS::AutoScaling::AutoScalingGroup', {
+        LaunchTemplate: {
+          LaunchTemplateId: Match.anyValue(),
+          Version: '$Latest',
+          LaunchTemplateName: Match.absent()
+        }
+      });
+    });
+  });
+
   it('non-dedicated-host runners keep maxCapacity equal to desired', () => {
     runnerConfig.runnerTypes
       .filter((type) => type.platform === PlatformType.AMAZONLINUX)