diff --git a/docs/HISTORY.txt b/docs/HISTORY.txt
index 0dd6098a8..3d0e6a4b9 100644
--- a/docs/HISTORY.txt
+++ b/docs/HISTORY.txt
@@ -2,6 +2,9 @@
 Changelog
 =========
 
+1.7.8 (Unreleased)
+------------------
+
 1.7.7 (2012-04-04)
 ------------------
 
diff --git a/setup.py b/setup.py
index 4aa53149a..d8bd4ec1a 100644
--- a/setup.py
+++ b/setup.py
@@ -71,7 +71,7 @@ except ImportError:
 
 
 NAME = 'Pillow'
-VERSION = '1.7.7'
+VERSION = '1.7.8'
 PIL_VERSION = '1.1.7'
 TCL_ROOT = None
 JPEG_ROOT = None