diff --git a/MODULE.bazel b/MODULE.bazel
index 388a8efd26..0e0a543dc2 100644
--- a/MODULE.bazel
+++ b/MODULE.bazel
@@ -114,7 +114,7 @@ maven.artifact(
 )
 
 # Used both by XLS and rules_hdl.
-bazel_dep(name = "rules_pkg", version = "1.0.1")
+bazel_dep(name = "rules_pkg", version = "1.2.0")
 
 # Workaround suggested by a Bazel team member; only needed for WORKSPACE to work correctly.
 # TODO: https://github.com/google/xls/issues/931 - Remove this workaround once the WORKSPACE file is migrated to MODULE.bazel.
diff --git a/MODULE.bazel.lock b/MODULE.bazel.lock
index c9d27b0531..5fc9702297 100644
--- a/MODULE.bazel.lock
+++ b/MODULE.bazel.lock
@@ -509,7 +509,8 @@
     "https://bcr.bazel.build/modules/rules_perl/0.2.4/source.json": "574317d6b3c7e4843fe611b76f15e62a1889949f5570702e1ee4ad335ea3c339",
     "https://bcr.bazel.build/modules/rules_pkg/0.7.0/MODULE.bazel": "df99f03fc7934a4737122518bb87e667e62d780b610910f0447665a7e2be62dc",
     "https://bcr.bazel.build/modules/rules_pkg/1.0.1/MODULE.bazel": "5b1df97dbc29623bccdf2b0dcd0f5cb08e2f2c9050aab1092fd39a41e82686ff",
-    "https://bcr.bazel.build/modules/rules_pkg/1.0.1/source.json": "bd82e5d7b9ce2d31e380dd9f50c111d678c3bdaca190cb76b0e1c71b05e1ba8a",
+    "https://bcr.bazel.build/modules/rules_pkg/1.2.0/MODULE.bazel": "c7db3c2b407e673c7a39e3625dc05dc9f12d6682cbd82a3a5924a13b491eda7e",
+    "https://bcr.bazel.build/modules/rules_pkg/1.2.0/source.json": "9062e00845bf91a4247465d371baa837adf9b6ff44c542f73ba084f07667e1dc",
     "https://bcr.bazel.build/modules/rules_proto/4.0.0/MODULE.bazel": "a7a7b6ce9bee418c1a760b3d84f83a299ad6952f9903c67f19e4edd964894e06",
     "https://bcr.bazel.build/modules/rules_proto/5.3.0-21.7/MODULE.bazel": "e8dff86b0971688790ae75528fe1813f71809b5afd57facb44dad9e8eca631b7",
     "https://bcr.bazel.build/modules/rules_proto/6.0.0/MODULE.bazel": "b531d7f09f58dce456cd61b4579ce8c86b38544da75184eadaf0a7cb7966453f",