diff --git a/CHANGELOG.md b/CHANGELOG.md
index a844ac0..5c53b63 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -2,6 +2,7 @@
 
 ## Version 0.3.3
 
+* Fix 'generateProto' caching issue
 * JPMS - add patching rule: org.apache.logging.log4j:log4j-api (for compile time checks)
 * JPMS - add patching rule: org.apache.logging.log4j:log4j-api (for compile time checks)
 
diff --git a/src/main/kotlin/org.hiero.gradle.feature.protobuf.gradle.kts b/src/main/kotlin/org.hiero.gradle.feature.protobuf.gradle.kts
index cb5f594..e7723f4 100644
--- a/src/main/kotlin/org.hiero.gradle.feature.protobuf.gradle.kts
+++ b/src/main/kotlin/org.hiero.gradle.feature.protobuf.gradle.kts
@@ -11,7 +11,12 @@ protobuf {
     // Add GRPC plugin as we need to generate GRPC services
     plugins { register("grpc") { artifact = "io.grpc:protoc-gen-grpc-java" } }
     generateProtoTasks {
-        all().configureEach { plugins.register("grpc") { option("@generated=omit") } }
+        all().configureEach {
+            plugins.register("grpc") { option("@generated=omit") }
+            // Track all tools as input to react if version changes for the tools
+            inputs.files(configurations["protobufToolsLocator_protoc"])
+            inputs.files(configurations["protobufToolsLocator_grpc"])
+        }
     }
 }
 
diff --git a/src/test/kotlin/org/hiero/gradle/test/ProtobufTest.kt b/src/test/kotlin/org/hiero/gradle/test/ProtobufTest.kt
new file mode 100644
index 0000000..d403b08
--- /dev/null
+++ b/src/test/kotlin/org/hiero/gradle/test/ProtobufTest.kt
@@ -0,0 +1,85 @@
+// SPDX-License-Identifier: Apache-2.0
+package org.hiero.gradle.test
+
+import org.assertj.core.api.Assertions.assertThat
+import org.gradle.testkit.runner.TaskOutcome
+import org.hiero.gradle.test.fixtures.GradleProject
+import org.junit.jupiter.api.Test
+
+class ProtobufTest {
+
+    @Test
+    fun `task re-runs if protobuf plugin version changes`() {
+        val testProto =
+            """
+            syntax = "proto3";
+            package org.hiero.product.module.a;
+            message Test {
+              bytes test_id = 1;
+            }
+        """
+                .trimIndent()
+        val moduleInfo =
+            """
+            module org.hiero.product.module.a {
+                requires com.google.protobuf;
+            }
+        """
+                .trimIndent()
+        val aggregation =
+            """
+            plugins {
+                id("java")
+                id("org.hiero.gradle.base.lifecycle")
+            }
+            dependencies { implementation(project(":module-a")) }
+            """
+                .trimIndent()
+
+        val push = GradleProject().withMinimalStructure()
+        val pull = GradleProject().withMinimalStructure()
+        push.aggregationBuildFile(aggregation)
+        pull.aggregationBuildFile(aggregation)
+        push.settingsFile.appendText(
+            """buildCache.local.directory = File("${push.file("build-cache").absolutePath}")"""
+        )
+        pull.settingsFile.appendText(
+            """buildCache.local.directory = File("${push.file("build-cache").absolutePath}")"""
+        )
+        push.moduleBuildFile("""plugins { id("org.hiero.gradle.feature.protobuf") }""")
+        pull.moduleBuildFile("""plugins { id("org.hiero.gradle.feature.protobuf") }""")
+
+        push.moduleInfoFile(moduleInfo)
+        pull.moduleInfoFile(moduleInfo)
+
+        push.file("product/module-a/src/main/proto/test.proto", testProto)
+        pull.file("product/module-a/src/main/proto/test.proto", testProto)
+
+        push.dependencyVersionsFile(dependencyVersions("4.29.0"))
+        pull.dependencyVersionsFile(dependencyVersions("4.29.3"))
+
+        val pushResult = push.run("assemble --build-cache")
+        val pullResult = pull.run("assemble --build-cache")
+
+        // make sure second run is not FROM-CACHE
+        assertThat(pushResult.task(":module-a:generateProto")?.outcome)
+            .isEqualTo(TaskOutcome.SUCCESS)
+        assertThat(pushResult.task(":module-a:compileJava")?.outcome).isEqualTo(TaskOutcome.SUCCESS)
+        assertThat(pullResult.task(":module-a:generateProto")?.outcome)
+            .isEqualTo(TaskOutcome.SUCCESS)
+        assertThat(pullResult.task(":module-a:compileJava")?.outcome).isEqualTo(TaskOutcome.SUCCESS)
+    }
+
+    private fun dependencyVersions(protocVersion: String) =
+        """
+                plugins {
+                    id("org.hiero.gradle.base.lifecycle")
+                    id("org.hiero.gradle.base.jpms-modules")
+                }
+                dependencies.constraints {
+                    api("com.google.protobuf:protobuf-java:4.29.0")
+                    api("com.google.protobuf:protoc:$protocVersion")
+                    api("io.grpc:protoc-gen-grpc-java:1.69.0")
+                }"""
+            .trimIndent()
+}