diff --git a/CHANGELOG.md b/CHANGELOG.md
index 60ed5e3..29c4e8a 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -4,6 +4,12 @@ All notable changes to `@red-hat-developer-hub/cli` are documented in this file.
 
 The format is based on [Keep a Changelog](https://keepachangelog.com/en/1.1.0/), and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0.html).
 
+## 2.0.8 - 2026-09-15
+
+### Fixed
+
+- **`plugin new`:** Add the missing `jest-environment-jsdom` development dependency to generated projects so `yarn test` runs successfully.
+
 ## 2.0.7 - 2026-09-14
 
 ### Added
diff --git a/package.json b/package.json
index 69a27b8..45afae5 100644
--- a/package.json
+++ b/package.json
@@ -1,7 +1,7 @@
 {
   "name": "@red-hat-developer-hub/cli",
   "description": "CLI for developing Backstage plugins and apps",
-  "version": "2.0.7",
+  "version": "2.0.8",
   "publishConfig": {
     "access": "public"
   },
diff --git a/src/commands/new/__snapshots__/command.test.ts.snap b/src/commands/new/__snapshots__/command.test.ts.snap
index 8b87bdb..3d016b4 100644
--- a/src/commands/new/__snapshots__/command.test.ts.snap
+++ b/src/commands/new/__snapshots__/command.test.ts.snap
@@ -68,6 +68,7 @@ RHDH Dynamic Plugin Factory is the preferred workflow for repeatable build and p
     "@backstage/cli": "0.36.5",
     "@types/jest": "^29.5.14",
     "jest": "^29.7.0",
+    "jest-environment-jsdom": "^29.7.0",
     "typescript": "^5.4.5"
   }
 }
@@ -200,6 +201,7 @@ RHDH Dynamic Plugin Factory is the preferred workflow for repeatable build and p
     "@backstage/cli": "0.36.5",
     "@types/jest": "^29.5.14",
     "jest": "^29.7.0",
+    "jest-environment-jsdom": "^29.7.0",
     "typescript": "^5.4.5"
   }
 }
@@ -323,6 +325,7 @@ RHDH Dynamic Plugin Factory is the preferred workflow for repeatable build and p
     "react-dom": "^18.0.0",
     "react-router-dom": "^6.30.2",
     "jest": "^29.7.0",
+    "jest-environment-jsdom": "^29.7.0",
     "typescript": "^5.4.5"
   },
   "peerDependencies": {
diff --git a/src/commands/new/command.test.ts b/src/commands/new/command.test.ts
index 619db2f..284ead0 100644
--- a/src/commands/new/command.test.ts
+++ b/src/commands/new/command.test.ts
@@ -88,6 +88,9 @@ describe('createPluginProject', () => {
 
       const packageJson = await fs.readJson(path.join(output, 'package.json'));
       expect(packageJson.devDependencies['@backstage/cli']).toBe('0.36.5');
+      expect(packageJson.devDependencies['jest-environment-jsdom']).toBe(
+        '^29.7.0',
+      );
       expect(packageJson.devDependencies).not.toHaveProperty(
         '@red-hat-developer-hub/cli',
       );
diff --git a/templates/plugin-new/backend/package.json.hbs b/templates/plugin-new/backend/package.json.hbs
index 4f5b591..8ef1e7f 100644
--- a/templates/plugin-new/backend/package.json.hbs
+++ b/templates/plugin-new/backend/package.json.hbs
@@ -17,6 +17,7 @@
     "@backstage/cli": "{{versionQuery '@backstage/cli'}}",
     "@types/jest": "^29.5.14",
     "jest": "^29.7.0",
+    "jest-environment-jsdom": "^29.7.0",
     "typescript": "^5.4.5"
   }
 }
diff --git a/templates/plugin-new/catalog-processor-module/package.json.hbs b/templates/plugin-new/catalog-processor-module/package.json.hbs
index e974241..ec8e78a 100644
--- a/templates/plugin-new/catalog-processor-module/package.json.hbs
+++ b/templates/plugin-new/catalog-processor-module/package.json.hbs
@@ -25,6 +25,7 @@
     "@backstage/cli": "{{versionQuery '@backstage/cli'}}",
     "@types/jest": "^29.5.14",
     "jest": "^29.7.0",
+    "jest-environment-jsdom": "^29.7.0",
     "typescript": "^5.4.5"
   }
 }
diff --git a/templates/plugin-new/frontend/package.json.hbs b/templates/plugin-new/frontend/package.json.hbs
index c287720..48ec269 100644
--- a/templates/plugin-new/frontend/package.json.hbs
+++ b/templates/plugin-new/frontend/package.json.hbs
@@ -24,6 +24,7 @@
     "react-dom": "^18.0.0",
     "react-router-dom": "^6.30.2",
     "jest": "^29.7.0",
+    "jest-environment-jsdom": "^29.7.0",
     "typescript": "^5.4.5"
   },
   "peerDependencies": {