diff --git a/aries/agents/aath-backchannel/src/controllers/did_exchange.rs b/aries/agents/aath-backchannel/src/controllers/did_exchange.rs
index 477977db43..607c64e87e 100644
--- a/aries/agents/aath-backchannel/src/controllers/did_exchange.rs
+++ b/aries/agents/aath-backchannel/src/controllers/did_exchange.rs
@@ -9,7 +9,9 @@ use aries_vcx_agent::aries_vcx::{
         },
         AriesMessage,
     },
-    protocols::did_exchange::state_machine::requester::helpers::invitation_get_first_did_service,
+    protocols::did_exchange::state_machine::requester::helpers::{
+        invitation_get_acceptable_did_exchange_version, invitation_get_first_did_service,
+    },
 };
 use serde_json::Value;
 
@@ -35,11 +37,13 @@ impl HarnessAgent {
             .aries_agent
             .out_of_band()
             .get_invitation(&invitation_id)?;
+
+        let version = invitation_get_acceptable_did_exchange_version(&invitation)?;
         let did_inviter: Did = invitation_get_first_did_service(&invitation)?;
         let (thid, pthid, my_did) = self
             .aries_agent
             .did_exchange()
-            .handle_msg_invitation(did_inviter.to_string(), Some(invitation_id))
+            .handle_msg_invitation(did_inviter.to_string(), Some(invitation_id), version)
             .await?;
         if let Some(ref pthid) = pthid {
             self.store_mapping_pthid_thid(pthid.clone(), thid.clone());
@@ -77,7 +81,7 @@ impl HarnessAgent {
         let (thid, pthid, my_did) = self
             .aries_agent
             .did_exchange()
-            .handle_msg_invitation(req.their_public_did.clone(), None) // todo: separate the case with/without invitation on did_exchange handler
+            .handle_msg_invitation(req.their_public_did.clone(), None, Default::default()) // todo: separate the case with/without invitation on did_exchange handler
             .await?;
         let connection_id = pthid.unwrap_or(thid);
         Ok(json!({
diff --git a/aries/agents/aries-vcx-agent/src/handlers/did_exchange.rs b/aries/agents/aries-vcx-agent/src/handlers/did_exchange.rs
index d5325150f9..dffbe37a20 100644
--- a/aries/agents/aries-vcx-agent/src/handlers/did_exchange.rs
+++ b/aries/agents/aries-vcx-agent/src/handlers/did_exchange.rs
@@ -11,6 +11,7 @@ use aries_vcx::{
             },
             out_of_band::invitation::Invitation as OobInvitation,
         },
+        msg_types::protocols::did_exchange::DidExchangeTypeV1,
         AriesMessage,
     },
     protocols::did_exchange::{
@@ -63,6 +64,7 @@ impl<T: BaseWallet> DidcommHandlerDidExchange<T> {
         &self,
         their_did: String,
         invitation_id: Option<String>,
+        version: DidExchangeTypeV1,
     ) -> AgentResult<(String, Option<String>, String)> {
         // todo: type the return type
         let (our_peer_did, _our_verkey) =
@@ -76,6 +78,7 @@ impl<T: BaseWallet> DidcommHandlerDidExchange<T> {
             &their_did,
             &our_peer_did,
             "".to_owned(),
+            version,
         )
         .await?;
 
diff --git a/aries/aries_vcx/src/protocols/did_exchange/state_machine/generic/mod.rs b/aries/aries_vcx/src/protocols/did_exchange/state_machine/generic/mod.rs
index 27a62fae0c..cf4301f006 100644
--- a/aries/aries_vcx/src/protocols/did_exchange/state_machine/generic/mod.rs
+++ b/aries/aries_vcx/src/protocols/did_exchange/state_machine/generic/mod.rs
@@ -5,9 +5,12 @@ use did_doc::schema::did_doc::DidDocument;
 use did_parser_nom::Did;
 use did_peer::peer_did::{numalgos::numalgo4::Numalgo4, PeerDid};
 use did_resolver_registry::ResolverRegistry;
-use messages::msg_fields::protocols::did_exchange::{
-    v1_1::request::Request,
-    v1_x::{complete::Complete, problem_report::ProblemReport, response::AnyResponse},
+use messages::{
+    msg_fields::protocols::did_exchange::{
+        v1_1::request::Request,
+        v1_x::{complete::Complete, problem_report::ProblemReport, response::AnyResponse},
+    },
+    msg_types::protocols::did_exchange::DidExchangeTypeV1,
 };
 use public_key::Key;
 pub use thin_state::ThinState;
@@ -90,6 +93,7 @@ impl GenericDidExchange {
         their_did: &Did,
         our_peer_did: &PeerDid<Numalgo4>,
         our_label: String,
+        version: DidExchangeTypeV1,
     ) -> Result<(Self, Request), AriesVcxError> {
         let TransitionResult { state, output } =
             DidExchangeRequester::<RequestSent>::construct_request(
@@ -98,6 +102,7 @@ impl GenericDidExchange {
                 their_did,
                 our_peer_did,
                 our_label,
+                version,
             )
             .await?;
         Ok((
diff --git a/aries/aries_vcx/src/protocols/did_exchange/state_machine/requester/helpers.rs b/aries/aries_vcx/src/protocols/did_exchange/state_machine/requester/helpers.rs
index 6eaf6913df..f985a40afc 100644
--- a/aries/aries_vcx/src/protocols/did_exchange/state_machine/requester/helpers.rs
+++ b/aries/aries_vcx/src/protocols/did_exchange/state_machine/requester/helpers.rs
@@ -12,7 +12,10 @@ use messages::{
         },
         out_of_band::invitation::{Invitation, OobService},
     },
-    msg_types::protocols::did_exchange::DidExchangeTypeV1,
+    msg_types::{
+        protocols::did_exchange::{DidExchangeType, DidExchangeTypeV1},
+        Protocol,
+    },
 };
 use shared::maybe_known::MaybeKnown;
 use uuid::Uuid;
@@ -94,3 +97,39 @@ pub fn invitation_get_first_did_service(invitation: &Invitation) -> VcxResult<Di
         "Invitation does not contain did service",
     ))
 }
+
+/// Finds the best suitable DIDExchange V1.X version specified in an invitation, or an error if
+/// none.
+pub fn invitation_get_acceptable_did_exchange_version(
+    invitation: &Invitation,
+) -> VcxResult<DidExchangeTypeV1> {
+    // determine acceptable protocol
+    let mut did_exch_v1_1_accepted = false;
+    let mut did_exch_v1_0_accepted = false;
+    for proto in invitation.content.handshake_protocols.iter().flatten() {
+        let MaybeKnown::Known(Protocol::DidExchangeType(DidExchangeType::V1(exch_proto))) = proto
+        else {
+            continue;
+        };
+        if matches!(exch_proto, DidExchangeTypeV1::V1_1(_)) {
+            did_exch_v1_1_accepted = true;
+            continue;
+        }
+        if matches!(exch_proto, DidExchangeTypeV1::V1_0(_)) {
+            did_exch_v1_0_accepted = true;
+        }
+    }
+
+    let version = match (did_exch_v1_1_accepted, did_exch_v1_0_accepted) {
+        (true, _) => DidExchangeTypeV1::new_v1_1(),
+        (false, true) => DidExchangeTypeV1::new_v1_0(),
+        _ => {
+            return Err(AriesVcxError::from_msg(
+                AriesVcxErrorKind::InvalidInput,
+                "OOB invitation does not have a suitable handshake protocol for DIDExchange",
+            ))
+        }
+    };
+
+    Ok(version)
+}
diff --git a/aries/aries_vcx/src/protocols/did_exchange/state_machine/requester/request_sent/mod.rs b/aries/aries_vcx/src/protocols/did_exchange/state_machine/requester/request_sent/mod.rs
index 547f8cab8e..99bbffd484 100644
--- a/aries/aries_vcx/src/protocols/did_exchange/state_machine/requester/request_sent/mod.rs
+++ b/aries/aries_vcx/src/protocols/did_exchange/state_machine/requester/request_sent/mod.rs
@@ -32,6 +32,7 @@ impl DidExchangeRequester<RequestSent> {
         their_did: &Did,
         our_peer_did: &PeerDid<Numalgo4>,
         our_label: String,
+        version: DidExchangeTypeV1,
     ) -> Result<TransitionResult<Self, Request>, AriesVcxError> {
         debug!(
             "DidExchangeRequester<RequestSent>::construct_request >> their_did: {}, our_peer_did: \
@@ -47,7 +48,7 @@ impl DidExchangeRequester<RequestSent> {
             invitation_id.clone(),
             our_peer_did.to_string(),
             our_label,
-            DidExchangeTypeV1::new_v1_1(),
+            version,
         );
 
         debug!(
diff --git a/aries/aries_vcx/tests/test_did_exchange.rs b/aries/aries_vcx/tests/test_did_exchange.rs
index eb791d41be..1af5f167ae 100644
--- a/aries/aries_vcx/tests/test_did_exchange.rs
+++ b/aries/aries_vcx/tests/test_did_exchange.rs
@@ -30,8 +30,9 @@ use did_peer::resolver::PeerDidResolver;
 use did_resolver_registry::ResolverRegistry;
 use did_resolver_sov::resolution::DidSovResolver;
 use log::info;
-use messages::msg_fields::protocols::out_of_band::invitation::{
-    Invitation, InvitationContent, OobService,
+use messages::{
+    msg_fields::protocols::out_of_band::invitation::{Invitation, InvitationContent, OobService},
+    msg_types::protocols::did_exchange::DidExchangeTypeV1,
 };
 use pretty_assertions::assert_eq;
 use test_utils::devsetup::{dev_build_profile_vdr_ledger, SetupPoolDirectory};
@@ -129,6 +130,7 @@ async fn did_exchange_test() -> Result<(), Box<dyn Error>> {
         &did_inviter,
         &requesters_peer_did,
         "some-label".to_owned(),
+        DidExchangeTypeV1::new_v1_1(),
     )
     .await
     .unwrap();
diff --git a/aries/messages/src/msg_types/protocols/did_exchange.rs b/aries/messages/src/msg_types/protocols/did_exchange.rs
index dd375270db..ff9eb294e1 100644
--- a/aries/messages/src/msg_types/protocols/did_exchange.rs
+++ b/aries/messages/src/msg_types/protocols/did_exchange.rs
@@ -40,6 +40,12 @@ pub enum DidExchangeTypeV1_1 {
     Complete,
 }
 
+impl Default for DidExchangeTypeV1 {
+    fn default() -> Self {
+        Self::new_v1_1()
+    }
+}
+
 #[cfg(test)]
 mod tests {
     use serde_json::json;