diff --git a/cmd/compose/config.go b/cmd/compose/config.go
index 8325946cdbc..b6b1f352d81 100644
--- a/cmd/compose/config.go
+++ b/cmd/compose/config.go
@@ -330,7 +330,7 @@ func runHash(ctx context.Context, dockerCli command.Cli, opts configOptions) err
 			return err
 		}
 
-		hash, err := compose.ServiceHash(s)
+		hash, err := compose.ServiceHash(project, s)
 
 		if err != nil {
 			return err
diff --git a/pkg/compose/convergence.go b/pkg/compose/convergence.go
index 3b680fe77c3..82b58e379f8 100644
--- a/pkg/compose/convergence.go
+++ b/pkg/compose/convergence.go
@@ -128,11 +128,11 @@ func (c *convergence) ensureService(ctx context.Context, project *types.Project,
 
 	sort.Slice(containers, func(i, j int) bool {
 		// select obsolete containers first, so they get removed as we scale down
-		if obsolete, _ := mustRecreate(service, containers[i], recreate); obsolete {
+		if obsolete, _ := mustRecreate(project, service, containers[i], recreate); obsolete {
 			// i is obsolete, so must be first in the list
 			return true
 		}
-		if obsolete, _ := mustRecreate(service, containers[j], recreate); obsolete {
+		if obsolete, _ := mustRecreate(project, service, containers[j], recreate); obsolete {
 			// j is obsolete, so must be first in the list
 			return false
 		}
@@ -158,7 +158,7 @@ func (c *convergence) ensureService(ctx context.Context, project *types.Project,
 			continue
 		}
 
-		mustRecreate, err := mustRecreate(service, container, recreate)
+		mustRecreate, err := mustRecreate(project, service, container, recreate)
 		if err != nil {
 			return err
 		}
@@ -292,14 +292,14 @@ func (c *convergence) resolveSharedNamespaces(service *types.ServiceConfig) erro
 	return nil
 }
 
-func mustRecreate(expected types.ServiceConfig, actual moby.Container, policy string) (bool, error) {
+func mustRecreate(project *types.Project, expected types.ServiceConfig, actual moby.Container, policy string) (bool, error) {
 	if policy == api.RecreateNever {
 		return false, nil
 	}
 	if policy == api.RecreateForce || expected.Extensions[extLifecycle] == forceRecreate {
 		return true, nil
 	}
-	configHash, err := ServiceHash(expected)
+	configHash, err := ServiceHash(project, expected)
 	if err != nil {
 		return false, err
 	}
diff --git a/pkg/compose/create.go b/pkg/compose/create.go
index ccf92058057..92a2b0d3a6b 100644
--- a/pkg/compose/create.go
+++ b/pkg/compose/create.go
@@ -213,7 +213,7 @@ func (s *composeService) getCreateConfigs(ctx context.Context,
 	inherit *moby.Container,
 	opts createOptions,
 ) (createConfigs, error) {
-	labels, err := s.prepareLabels(opts.Labels, service, number)
+	labels, err := s.prepareLabels(opts.Labels, p, service, number)
 	if err != nil {
 		return createConfigs{}, err
 	}
@@ -499,8 +499,8 @@ func parseSecurityOpts(p *types.Project, securityOpts []string) ([]string, bool,
 	return parsed, unconfined, nil
 }
 
-func (s *composeService) prepareLabels(labels types.Labels, service types.ServiceConfig, number int) (map[string]string, error) {
-	hash, err := ServiceHash(service)
+func (s *composeService) prepareLabels(labels types.Labels, project *types.Project, service types.ServiceConfig, number int) (map[string]string, error) {
+	hash, err := ServiceHash(project, service)
 	if err != nil {
 		return nil, err
 	}
diff --git a/pkg/compose/hash.go b/pkg/compose/hash.go
index 284ccaa76fc..dba127f1a15 100644
--- a/pkg/compose/hash.go
+++ b/pkg/compose/hash.go
@@ -24,7 +24,7 @@ import (
 )
 
 // ServiceHash computes the configuration hash for a service.
-func ServiceHash(o types.ServiceConfig) (string, error) {
+func ServiceHash(project *types.Project, o types.ServiceConfig) (string, error) {
 	// remove the Build config when generating the service hash
 	o.Build = nil
 	o.PullPolicy = ""
@@ -37,5 +37,12 @@ func ServiceHash(o types.ServiceConfig) (string, error) {
 	if err != nil {
 		return "", err
 	}
+
+	for _, serviceConfig := range o.Configs {
+		if projectConfig, ok := project.Configs[serviceConfig.Source]; ok {
+			bytes = append(bytes, []byte(projectConfig.Content)...)
+		}
+	}
+
 	return digest.SHA256.FromBytes(bytes).Encoded(), nil
 }
diff --git a/pkg/compose/hash_test.go b/pkg/compose/hash_test.go
index 73b7f387735..04b448ce161 100644
--- a/pkg/compose/hash_test.go
+++ b/pkg/compose/hash_test.go
@@ -23,21 +23,56 @@ import (
 	"gotest.tools/v3/assert"
 )
 
-func TestServiceHash(t *testing.T) {
-	hash1, err := ServiceHash(serviceConfig(1))
+func TestServiceHashWithAllValuesTheSame(t *testing.T) {
+	hash1, err := ServiceHash(projectConfig("a", "b"), serviceConfig("myContext1", "always", 1))
 	assert.NilError(t, err)
-	hash2, err := ServiceHash(serviceConfig(2))
+	hash2, err := ServiceHash(projectConfig("a", "b"), serviceConfig("myContext1", "always", 1))
 	assert.NilError(t, err)
 	assert.Equal(t, hash1, hash2)
 }
 
-func serviceConfig(replicas int) types.ServiceConfig {
+func TestServiceHashWithIgnorableValues(t *testing.T) {
+	hash1, err := ServiceHash(&types.Project{}, serviceConfig("myContext1", "always", 1))
+	assert.NilError(t, err)
+	hash2, err := ServiceHash(&types.Project{}, serviceConfig("myContext2", "never", 2))
+	assert.NilError(t, err)
+	assert.Equal(t, hash1, hash2)
+}
+
+func TestServiceHashWithChangedConfig(t *testing.T) {
+	hash1, err := ServiceHash(projectConfig("myConfigSource", "a"), serviceConfig("myContext1", "always", 1))
+	assert.NilError(t, err)
+	hash2, err := ServiceHash(projectConfig("myConfigSource", "b"), serviceConfig("myContext2", "never", 2))
+	assert.NilError(t, err)
+	assert.Assert(t, hash1 != hash2)
+}
+
+func projectConfig(configName, configContent string) *types.Project {
+	return &types.Project{
+		Configs: types.Configs{
+			configName: types.ConfigObjConfig{
+				Content: configContent,
+			},
+		},
+	}
+}
+
+func serviceConfig(buildContext, pullPolicy string, replicas int) types.ServiceConfig {
 	return types.ServiceConfig{
-		Scale: &replicas,
+		Build: &types.BuildConfig{
+			Context: buildContext,
+		},
+		PullPolicy: pullPolicy,
+		Scale:      &replicas,
 		Deploy: &types.DeployConfig{
 			Replicas: &replicas,
 		},
 		Name:  "foo",
 		Image: "bar",
+		Configs: []types.ServiceConfigObjConfig{
+			{
+				Source: "myConfigSource",
+			},
+		},
 	}
 }