diff --git a/packages/schematics/update/update/index.ts b/packages/schematics/update/update/index.ts
index e56e18cc6f..8a9bcb14ac 100644
--- a/packages/schematics/update/update/index.ts
+++ b/packages/schematics/update/update/index.ts
@@ -76,7 +76,8 @@ interface PackageInfo {
 }
 
 interface UpdateMetadata {
-  packageGroup: string[];
+  packageGroupName?: string;
+  packageGroup: { [ packageName: string ]: string };
   requirements: { [packageName: string]: string };
   migrations?: string;
 }
@@ -88,9 +89,9 @@ function _updatePeerVersion(infoMap: Map<string, PackageInfo>, name: string, ran
     return range;
   }
   if (maybePackageInfo.target) {
-    name = maybePackageInfo.target.updateMetadata.packageGroup[0] || name;
+    name = maybePackageInfo.target.updateMetadata.packageGroupName || name;
   } else {
-    name = maybePackageInfo.installed.updateMetadata.packageGroup[0] || name;
+    name = maybePackageInfo.installed.updateMetadata.packageGroupName || name;
   }
 
   const maybeTransform = peerCompatibleWhitelist[name];
@@ -353,7 +354,7 @@ function _getUpdateMetadata(
   const metadata = packageJson['ng-update'];
 
   const result: UpdateMetadata = {
-    packageGroup: [],
+    packageGroup: {},
     requirements: {},
   };
 
@@ -363,15 +364,28 @@ function _getUpdateMetadata(
 
   if (metadata['packageGroup']) {
     const packageGroup = metadata['packageGroup'];
-    // Verify that packageGroup is an array of strings. This is not an error but we still warn
-    // the user and ignore the packageGroup keys.
-    if (!Array.isArray(packageGroup) || packageGroup.some(x => typeof x != 'string')) {
+    // Verify that packageGroup is an array of strings or an map of versions. This is not an error
+    // but we still warn the user and ignore the packageGroup keys.
+    if (Array.isArray(packageGroup) && packageGroup.every(x => typeof x == 'string')) {
+      result.packageGroup = packageGroup.reduce((group, name) => {
+        group[name] = packageJson.version;
+
+        return group;
+      }, result.packageGroup);
+    } else if (typeof packageGroup == 'object' && packageGroup
+               && Object.values(packageGroup).every(x => typeof x == 'string')) {
+      result.packageGroup = packageGroup;
+    } else {
       logger.warn(
         `packageGroup metadata of package ${packageJson.name} is malformed. Ignoring.`,
       );
-    } else {
-      result.packageGroup = packageGroup;
     }
+
+    result.packageGroupName = Object.keys(result.packageGroup)[0];
+  }
+
+  if (typeof metadata['packageGroupName'] == 'string') {
+    result.packageGroupName = metadata['packageGroupName'];
   }
 
   if (metadata['requirements']) {
@@ -654,22 +668,34 @@ function _addPackageGroup(
     return;
   }
 
-  const packageGroup = ngUpdateMetadata['packageGroup'];
+  let packageGroup = ngUpdateMetadata['packageGroup'];
   if (!packageGroup) {
     return;
   }
-  if (!Array.isArray(packageGroup) || packageGroup.some(x => typeof x != 'string')) {
+  if (Array.isArray(packageGroup) && !packageGroup.some(x => typeof x != 'string')) {
+    packageGroup = packageGroup.reduce((acc, curr) => {
+      acc[curr] = maybePackage;
+
+      return acc;
+    }, {} as { [name: string]: string });
+  }
+
+  // Only need to check if it's an object because we set it right the time before.
+  if (typeof packageGroup != 'object'
+      || packageGroup === null
+      || Object.values(packageGroup).some(v => typeof v != 'string')
+  ) {
     logger.warn(`packageGroup metadata of package ${npmPackageJson.name} is malformed.`);
 
     return;
   }
 
-  packageGroup
+  Object.keys(packageGroup)
     .filter(name => !packages.has(name))  // Don't override names from the command line.
     .filter(name => allDependencies.has(name))  // Remove packages that aren't installed.
     .forEach(name => {
-    packages.set(name, maybePackage);
-  });
+      packages.set(name, packageGroup[name]);
+    });
 }
 
 /**
diff --git a/packages/schematics/update/update/index_spec.ts b/packages/schematics/update/update/index_spec.ts
index b1c7c936eb..e91a726e03 100644
--- a/packages/schematics/update/update/index_spec.ts
+++ b/packages/schematics/update/update/index_spec.ts
@@ -222,6 +222,40 @@ describe('@schematics/update', () => {
     ).toPromise().then(done, done.fail);
   }, 45000);
 
+  it('uses packageGroup for versioning', async () => {
+    // Add the basic migration package.
+    const content = virtualFs.fileBufferToString(host.sync.read(normalize('/package.json')));
+    const packageJson = JSON.parse(content);
+    const dependencies = packageJson['dependencies'];
+    dependencies['@angular-devkit-tests/update-package-group-1'] = '1.0.0';
+    dependencies['@angular-devkit-tests/update-package-group-2'] = '1.0.0';
+    host.sync.write(
+      normalize('/package.json'),
+      virtualFs.stringToFileBuffer(JSON.stringify(packageJson)),
+    );
+
+    await schematicRunner.runSchematicAsync('update', {
+      packages: ['@angular-devkit-tests/update-package-group-1'],
+    }, appTree).pipe(
+      map(tree => {
+        const packageJson = JSON.parse(tree.readContent('/package.json'));
+        const deps = packageJson['dependencies'];
+        expect(deps['@angular-devkit-tests/update-package-group-1']).toBe('1.2.0');
+        expect(deps['@angular-devkit-tests/update-package-group-2']).toBe('2.0.0');
+
+        // Check install task.
+        expect(schematicRunner.tasks).toEqual([
+          {
+            name: 'node-package',
+            options: jasmine.objectContaining({
+              command: 'install',
+            }),
+          },
+        ]);
+      }),
+    ).toPromise();
+  }, 45000);
+
   it('can migrate only', done => {
     // Add the basic migration package.
     const content = virtualFs.fileBufferToString(host.sync.read(normalize('/package.json')));
diff --git a/tests/schematics/update/packages/README.md b/tests/schematics/update/packages/README.md
new file mode 100644
index 0000000000..83526f2cd7
--- /dev/null
+++ b/tests/schematics/update/packages/README.md
@@ -0,0 +1,14 @@
+
+## Update Package Group packages
+
+* `update-package-group-1@1.0.0` -> `update-package-group2@^1`
+* `update-package-group-2@1.0.0` -> `update-package-group1@1.0.0`
+----
+
+* `update-package-group-1@1.0.0` -> `update-package-group2@^1`
+* `update-package-group-2@1.1.0` -> `update-package-group1@1.0.0`
+----
+
+* `update-package-group-1@1.2.0` -> `update-package-group2@^2`
+* `update-package-group-2@2.0.0` -> `update-package-group1@^1`
+----
diff --git a/tests/schematics/update/packages/update-package-group-1/package.json b/tests/schematics/update/packages/update-package-group-1/package.json
new file mode 100644
index 0000000000..58a55973dd
--- /dev/null
+++ b/tests/schematics/update/packages/update-package-group-1/package.json
@@ -0,0 +1,11 @@
+{
+  "name": "@angular-devkit-tests/update-package-group-1",
+  "version": "1.2.0",
+  "description": "Tests",
+  "ng-update": {
+    "packageGroup": {
+      "@angular-devkit-tests/update-package-group-1": "",
+      "@angular-devkit-tests/update-package-group-2": "^2"
+    }
+  }
+}
diff --git a/tests/schematics/update/packages/update-package-group-2/package.json b/tests/schematics/update/packages/update-package-group-2/package.json
new file mode 100644
index 0000000000..39231fc6a1
--- /dev/null
+++ b/tests/schematics/update/packages/update-package-group-2/package.json
@@ -0,0 +1,11 @@
+{
+  "name": "@angular-devkit-tests/update-package-group-2",
+  "version": "2.0.0",
+  "description": "Tests",
+  "ng-update": {
+    "packageGroup": {
+      "@angular-devkit-tests/update-package-group-1": "^1",
+      "@angular-devkit-tests/update-package-group-2": ""
+    }
+  }
+}