diff --git a/.release-please-manifest.json b/.release-please-manifest.json
index 77b3426..9fc388f 100644
--- a/.release-please-manifest.json
+++ b/.release-please-manifest.json
@@ -1,3 +1,3 @@
 {
-  ".": "0.40.3"
+  ".": "0.40.4"
 }
diff --git a/Cargo.lock b/Cargo.lock
index a427b4d..edb89d9 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -432,7 +432,7 @@ dependencies = [
 
 [[package]]
 name = "codegraph-bench"
-version = "0.40.3"
+version = "0.40.4"
 dependencies = [
  "anyhow",
  "clap",
@@ -447,7 +447,7 @@ dependencies = [
 
 [[package]]
 name = "codegraph-core"
-version = "0.40.3"
+version = "0.40.4"
 dependencies = [
  "anyhow",
  "serde",
@@ -463,7 +463,7 @@ dependencies = [
 
 [[package]]
 name = "codegraph-daemon"
-version = "0.40.3"
+version = "0.40.4"
 dependencies = [
  "anyhow",
  "codegraph-core",
@@ -483,7 +483,7 @@ dependencies = [
 
 [[package]]
 name = "codegraph-extract"
-version = "0.40.3"
+version = "0.40.4"
 dependencies = [
  "anyhow",
  "codegraph-core",
@@ -531,7 +531,7 @@ dependencies = [
 
 [[package]]
 name = "codegraph-graph"
-version = "0.40.3"
+version = "0.40.4"
 dependencies = [
  "anyhow",
  "codegraph-core",
@@ -545,7 +545,7 @@ dependencies = [
 
 [[package]]
 name = "codegraph-mcp"
-version = "0.40.3"
+version = "0.40.4"
 dependencies = [
  "anyhow",
  "axum",
@@ -568,7 +568,7 @@ dependencies = [
 
 [[package]]
 name = "codegraph-resolve"
-version = "0.40.3"
+version = "0.40.4"
 dependencies = [
  "anyhow",
  "codegraph-core",
@@ -582,7 +582,7 @@ dependencies = [
 
 [[package]]
 name = "codegraph-rs"
-version = "0.40.3"
+version = "0.40.4"
 dependencies = [
  "anyhow",
  "assert_cmd",
@@ -618,7 +618,7 @@ dependencies = [
 
 [[package]]
 name = "codegraph-store"
-version = "0.40.3"
+version = "0.40.4"
 dependencies = [
  "anyhow",
  "codegraph-core",
@@ -630,7 +630,7 @@ dependencies = [
 
 [[package]]
 name = "codegraph-watch"
-version = "0.40.3"
+version = "0.40.4"
 dependencies = [
  "anyhow",
  "codegraph-core",
diff --git a/Cargo.toml b/Cargo.toml
index 8ea2925..8b58c9b 100644
--- a/Cargo.toml
+++ b/Cargo.toml
@@ -14,7 +14,7 @@ members = [
 resolver = "2"
 
 [workspace.package]
-version = "0.40.3"
+version = "0.40.4"
 edition = "2024"
 license = "MIT"
 authors = ["sunerpy <nkuzhangshn@gmail.com>"]
diff --git a/changelog/CHANGELOG-v0.x.md b/changelog/CHANGELOG-v0.x.md
index fedd85b..d3a7ca6 100644
--- a/changelog/CHANGELOG-v0.x.md
+++ b/changelog/CHANGELOG-v0.x.md
@@ -1,5 +1,12 @@
 # Changelog
 
+## [0.40.4](https://github.com/sunerpy/codegraph-rust/compare/v0.40.3...v0.40.4) (2026-07-24)
+
+
+### Bug Fixes
+
+* **watch:** clear ambient git env so repo detection honors current_dir ([#171](https://github.com/sunerpy/codegraph-rust/issues/171)) ([9a9e67f](https://github.com/sunerpy/codegraph-rust/commit/9a9e67fca7629f2d39741ab62af7ce48a2643d4a))
+
 ## [0.40.3](https://github.com/sunerpy/codegraph-rust/compare/v0.40.2...v0.40.3) (2026-07-24)
 
 
diff --git a/version.txt b/version.txt
index e373c4a..f57373a 100644
--- a/version.txt
+++ b/version.txt
@@ -1 +1 @@
-0.40.3
+0.40.4