diff --git a/src/lightning_app/CHANGELOG.md b/src/lightning_app/CHANGELOG.md
index 8c830c62ef..7439d6a4be 100644
--- a/src/lightning_app/CHANGELOG.md
+++ b/src/lightning_app/CHANGELOG.md
@@ -37,6 +37,9 @@ The format is based on [Keep a Changelog](http://keepachangelog.com/en/1.0.0/).
 - Fixed `AutoScaler` failing due to port collision across works ([#15966](https://github.com/Lightning-AI/lightning/pull/15966))
 
 
+- Fixed a bug where auto-upgrading to the latest lightning via the CLI could get stuck in a loop ([#15984](https://github.com/Lightning-AI/lightning/pull/15984))
+
+
 - Fixed Registration for CloudComputes of Works in `L.app.structures` ([#15964](https://github.com/Lightning-AI/lightning/pull/15964))
 
 
diff --git a/src/lightning_app/cli/lightning_cli.py b/src/lightning_app/cli/lightning_cli.py
index 11138ea6fb..87b0ef9175 100644
--- a/src/lightning_app/cli/lightning_cli.py
+++ b/src/lightning_app/cli/lightning_cli.py
@@ -49,8 +49,9 @@ logger = Logger(__name__)
 
 
 def main() -> None:
-    # Check environment and versions if not in the cloud
-    if "LIGHTNING_APP_STATE_URL" not in os.environ:
+    # Check environment and versions if not in the cloud and not testing
+    is_testing = bool(int(os.getenv("LIGHTING_TESTING", "0")))
+    if not is_testing and "LIGHTNING_APP_STATE_URL" not in os.environ:
         # Enforce running in PATH Python
         _check_environment_and_redirect()
 
diff --git a/src/lightning_app/testing/testing.py b/src/lightning_app/testing/testing.py
index 8d112d7fa4..40b705458d 100644
--- a/src/lightning_app/testing/testing.py
+++ b/src/lightning_app/testing/testing.py
@@ -262,6 +262,7 @@ def run_app_in_cloud(
     with tempfile.TemporaryDirectory() as tmpdir:
         env_copy = os.environ.copy()
         env_copy["PACKAGE_LIGHTNING"] = "1"
+        env_copy["LIGHTING_TESTING"] = "1"
         if debug:
             env_copy["LIGHTNING_DEBUG"] = "1"
         shutil.copytree(app_folder, tmpdir, dirs_exist_ok=True)
diff --git a/src/lightning_app/utilities/cli_helpers.py b/src/lightning_app/utilities/cli_helpers.py
index 293944ca82..caa414e163 100644
--- a/src/lightning_app/utilities/cli_helpers.py
+++ b/src/lightning_app/utilities/cli_helpers.py
@@ -254,7 +254,7 @@ def _get_newer_version() -> Optional[str]:
         return None if __version__ == latest_version else latest_version
     except Exception:
         # Return None if any exception occurs
-        return "err"
+        return None
 
 
 def _redirect_command(executable: str):
@@ -277,7 +277,7 @@ def _check_version_and_upgrade():
         prompt = f"A newer version of {__package_name__} is available ({new_version}). Would you like to upgrade?"
 
         if click.confirm(prompt, default=True):
-            command = f"pip install --upgrade {__package_name__}"
+            command = f"pip install '{__package_name__}=={new_version}'"
 
             logger.info(f"⚡ RUN: {command}")
 
diff --git a/tests/tests_app/utilities/test_cli_helpers.py b/tests/tests_app/utilities/test_cli_helpers.py
index 4ebb3ddc4f..ecdd1705c2 100644
--- a/tests/tests_app/utilities/test_cli_helpers.py
+++ b/tests/tests_app/utilities/test_cli_helpers.py
@@ -99,7 +99,7 @@ def test_arrow_time_callback():
             "1.0.0dev",
             None,
         ),
-        ({"1.0.0": "this wil trigger an error"}, "1.0.0", "err"),
+        ({"1.0.0": "this wil trigger an error"}, "1.0.0", None),
         ({}, "1.0.0rc0", None),
     ],
 )