diff --git a/.changeset/quiet-zebras-repeat.md b/.changeset/quiet-zebras-repeat.md
new file mode 100644
index 0000000000..025c7cd8cf
--- /dev/null
+++ b/.changeset/quiet-zebras-repeat.md
@@ -0,0 +1,6 @@
+---
+"@pnpm/installing.deps-installer": patch
+"pnpm": patch
+---
+
+Fix peer dependencies not being upgraded with `pnpm upgrade --latest` [#9900](https://github.com/pnpm/pnpm/issues/9900).
diff --git a/installing/deps-installer/src/install/index.ts b/installing/deps-installer/src/install/index.ts
index 9c4dc0269a..7a60fcef0f 100644
--- a/installing/deps-installer/src/install/index.ts
+++ b/installing/deps-installer/src/install/index.ts
@@ -681,7 +681,9 @@ export async function mutateModules (
     >
 
     async function installSome (project: InstallSomeProject) {
-      const currentBareSpecifiers = opts.ignoreCurrentSpecifiers ? {} : getAllDependenciesFromManifest(project.manifest)
+      const currentBareSpecifiers = opts.ignoreCurrentSpecifiers
+        ? {}
+        : getAllDependenciesFromManifest(project.manifest, { autoInstallPeers: opts.autoInstallPeers })
       const optionalDependencies = project.targetDependenciesField ? {} : project.manifest.optionalDependencies ?? {}
       const devDependencies = project.targetDependenciesField ? {} : project.manifest.devDependencies ?? {}
       if (preferredSpecs == null) {
diff --git a/installing/deps-installer/test/install/update.ts b/installing/deps-installer/test/install/update.ts
index 32fb460dce..e47008cb7e 100644
--- a/installing/deps-installer/test/install/update.ts
+++ b/installing/deps-installer/test/install/update.ts
@@ -263,3 +263,36 @@ test('peer dependency is not added to prod deps on update', async () => {
     },
   })
 })
+
+// Covers https://github.com/pnpm/pnpm/issues/9900
+test('peer dependencies are updated with pnpm upgrade --latest when autoInstallPeers is true', async () => {
+  await addDistTag({ package: '@pnpm.e2e/foo', version: '1.0.0', distTag: 'latest' })
+
+  const project = prepareEmpty()
+
+  const manifest = {
+    name: 'test-pkg',
+    version: '1.0.0',
+    peerDependencies: {
+      '@pnpm.e2e/foo': '^1.0.0',
+    },
+  }
+
+  await install(manifest, testDefaults({ autoInstallPeers: true }))
+
+  let lockfile = project.readLockfile()
+  expect(lockfile.importers?.['.']?.dependencies?.['@pnpm.e2e/foo'].version).toBe('1.0.0')
+
+  await addDistTag({ package: '@pnpm.e2e/foo', version: '1.3.0', distTag: 'latest' })
+
+  await addDependenciesToPackage(manifest, ['@pnpm.e2e/foo'], testDefaults({
+    allowNew: false,
+    autoInstallPeers: true,
+    update: true,
+    updateToLatest: true,
+  }))
+
+  lockfile = project.readLockfile()
+
+  expect(lockfile.importers?.['.']?.dependencies?.['@pnpm.e2e/foo'].version).toBe('1.3.0')
+})
diff --git a/pkg-manifest/utils/src/getAllDependenciesFromManifest.ts b/pkg-manifest/utils/src/getAllDependenciesFromManifest.ts
index 75d8dc57a4..9a9a92c3df 100644
--- a/pkg-manifest/utils/src/getAllDependenciesFromManifest.ts
+++ b/pkg-manifest/utils/src/getAllDependenciesFromManifest.ts
@@ -1,11 +1,13 @@
 import type { Dependencies, DependenciesField, ProjectManifest } from '@pnpm/types'
 
 export function getAllDependenciesFromManifest (
-  pkg: Pick<ProjectManifest, DependenciesField>
+  pkg: Pick<ProjectManifest, DependenciesField | 'peerDependencies'>,
+  opts?: { autoInstallPeers?: boolean }
 ): Dependencies {
   return {
     ...pkg.devDependencies,
     ...pkg.dependencies,
     ...pkg.optionalDependencies,
+    ...(opts?.autoInstallPeers ? pkg.peerDependencies : {}),
   } as Dependencies
 }
diff --git a/pkg-manifest/utils/src/index.ts b/pkg-manifest/utils/src/index.ts
index 5b19e6546c..e84cc31cea 100644
--- a/pkg-manifest/utils/src/index.ts
+++ b/pkg-manifest/utils/src/index.ts
@@ -25,11 +25,13 @@ export function filterDependenciesByType (
 }
 
 export function getAllDependenciesFromManifest (
-  manifest: Pick<ProjectManifest, 'devDependencies' | 'dependencies' | 'optionalDependencies'>
+  manifest: Pick<ProjectManifest, 'devDependencies' | 'dependencies' | 'optionalDependencies' | 'peerDependencies'>,
+  opts?: { autoInstallPeers?: boolean }
 ): Dependencies {
   return {
     ...manifest.devDependencies,
     ...manifest.dependencies,
     ...manifest.optionalDependencies,
+    ...(opts?.autoInstallPeers ? manifest.peerDependencies : {}),
   }
 }