diff --git a/Gems/Atom/RPI/Code/Include/Atom/RPI.Edit/Material/MaterialTypeSourceData.h b/Gems/Atom/RPI/Code/Include/Atom/RPI.Edit/Material/MaterialTypeSourceData.h
index cca7d41e91..6d7c9b556c 100644
--- a/Gems/Atom/RPI/Code/Include/Atom/RPI.Edit/Material/MaterialTypeSourceData.h
+++ b/Gems/Atom/RPI/Code/Include/Atom/RPI.Edit/Material/MaterialTypeSourceData.h
@@ -129,7 +129,8 @@ namespace AZ
                 AZStd::string m_renameTo;
             };
 
-            // TODO: Support script operations. We will only be supporting rename for now.
+            // TODO: Support script operations--At that point, we'll likely need to replace VersionUpdatesRenameOperationDefinition with a more generic
+            // data structure that has a custom JSON serialize. We will only be supporting rename for now.
             using VersionUpdateActions = AZStd::vector<VersionUpdatesRenameOperationDefinition>;
 
             struct VersionUpdateDefinition
@@ -146,9 +147,6 @@ namespace AZ
             {
                 AZ_TYPE_INFO(AZ::RPI::MaterialTypeSourceData::PropertyLayout, "{AE53CF3F-5C3B-44F5-B2FB-306F0EB06393}");
 
-                //! Indicates the version of the set of available properties. Can be used to detect materials that might need to be updated.
-                uint32_t m_version = 0;
-
                 //! List of groups that will contain the available properties
                 AZStd::vector<GroupDefinition> m_groups;
 
diff --git a/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialAsset.h b/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialAsset.h
index 2d42cc13ea..e14ff30f87 100644
--- a/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialAsset.h
+++ b/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialAsset.h
@@ -22,6 +22,7 @@
 namespace UnitTest
 {
     class MaterialTests;
+    class MaterialAssetTests;
 }
 
 namespace AZ
@@ -42,10 +43,12 @@ namespace AZ
             , public MaterialReloadNotificationBus::Handler
             , public AssetInitBus::Handler
         {
+            friend class MaterialVersionUpdate;
             friend class MaterialAssetCreator;
             friend class MaterialAssetHandler;
             friend class MaterialAssetCreatorCommon;
             friend class UnitTest::MaterialTests;
+            friend class UnitTest::MaterialAssetTests;
 
         public:
             AZ_RTTI(MaterialAsset, "{522C7BE0-501D-463E-92C6-15184A2B7AD8}", AZ::Data::AssetData);
@@ -119,10 +122,8 @@ namespace AZ
             //! from m_materialTypeAsset.
             void RealignPropertyValuesAndNames();
 
-            //! Renames properties in m_propertyNames based on the MaterialTypeAsset's version update.
-            void RenamePropertyNames();
-            template <typename iteratorType>
-            void RenamePropertyNames(iteratorType start, iteratorType end);
+            //! Renames properties in m_propertyNames based on the MaterialTypeAsset's version update. Note that only version upgrades are supported.
+            void ApplyVersionUpdates();
 
             //! Called by asset creators to assign the asset to a ready state.
             void SetReady();
diff --git a/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialTypeAsset.h b/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialTypeAsset.h
index ca7de621a4..d0f0609c02 100644
--- a/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialTypeAsset.h
+++ b/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialTypeAsset.h
@@ -126,10 +126,10 @@ namespace AZ
 
             //! Returns the version of the MaterialTypeAsset.
             uint32_t GetVersion() const;
-            //! Returns the version update containing the actions to perform. If a version
-            //! is not defined in m_materialVersionUpdatesMap, a material version with the specified
+            //! Returns the toVersion update containing the actions to perform. If a toVersion
+            //! is not defined in m_materialVersionUpdatesMap, a material toVersion with the specified
             //! version but empty actions will be returned. 
-            const MaterialVersionUpdate GetMaterialVersionUpdate(uint32_t version) const;
+            MaterialVersionUpdate GetMaterialVersionUpdate(uint32_t toVersion) const;
 
         private:
             bool PostLoadInit() override;
diff --git a/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialTypeAssetCreator.h b/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialTypeAssetCreator.h
index 953b201960..64327ecd03 100644
--- a/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialTypeAssetCreator.h
+++ b/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialTypeAssetCreator.h
@@ -41,7 +41,7 @@ namespace AZ
             //! Sets the version of the MaterialTypeAsset
             void SetVersion(uint32_t version);
             //! Adds a version update object into the MaterialTypeAsset
-            void AddVersionUpdate(uint32_t toVersion, MaterialVersionUpdate materialVersionUpdate);
+            void AddVersionUpdate(uint32_t toVersion, const MaterialVersionUpdate& materialVersionUpdate);
 
             //! Indicates that this MaterialType will own the specified shader option.
             //! Material-owned shader options can be connected to material properties (either directly or through functors).
diff --git a/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialVersionUpdate.h b/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialVersionUpdate.h
index 9147ec8d82..ee15ebfdcf 100644
--- a/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialVersionUpdate.h
+++ b/Gems/Atom/RPI/Code/Include/Atom/RPI.Reflect/Material/MaterialVersionUpdate.h
@@ -11,13 +11,18 @@
 #include <AzCore/std/containers/vector.h>
 #include <AzCore/std/containers/map.h>
 #include <AzCore/std/string/string.h>
+#include <AzCore/Name/Name.h>
 
 namespace AZ
 {
     namespace RPI
     {
-        struct MaterialVersionUpdate
+        class MaterialAsset;
+
+        // This class contains a toVersion and a list of actions to specify what operations were performed to upgrade a materialType. 
+        class MaterialVersionUpdate
         {
+        public:
             AZ_TYPE_INFO(AZ::RPI::MaterialVersionUpdate, "{B36E7712-AED8-46AA-AFE0-01F8F884C44A}");
 
             static void Reflect(ReflectContext* context);
@@ -26,20 +31,28 @@ namespace AZ
             {
                 AZ_TYPE_INFO(AZ::RPI::MaterialVersionUpdate::Action, "{A1FBEB19-EA05-40F0-9700-57D048DF572B}");
 
-                AZStd::string m_operation;
-                AZStd::map<AZStd::string, AZStd::string> m_argsMap;
+                AZ::Name m_operation;
+                AZStd::unordered_map<AZ::Name, AZ::Name> m_argsMap;
 
                 Action() = default;
-                Action(const AZStd::string& operation, const AZStd::initializer_list<AZStd::pair<AZStd::string, AZStd::string>>& args);
-                void AddArgs(const AZStd::string& key, const AZStd::string& argument);
+                Action(const AZ::Name& operation, const AZStd::initializer_list<AZStd::pair<AZ::Name, AZ::Name>>& args);
+                void AddArg(const AZ::Name& key, const AZ::Name& argument);
             };
 
-            MaterialVersionUpdate() = default;
-            MaterialVersionUpdate(uint32_t toVersion);
+            explicit MaterialVersionUpdate() = default;
+            explicit MaterialVersionUpdate(uint32_t toVersion);
 
-            uint32_t m_toVersion;
+            uint32_t GetVersion() const;
+            void SetVersion(uint32_t toVersion);
+
+            void ApplyVersionUpdates(MaterialAsset& materialAsset) const;
 
             using Actions = AZStd::vector<Action>;
+            const Actions& GetActions() const;
+            void AddAction(const Action& action);
+
+        private:
+            uint32_t m_toVersion;
             Actions m_actions;
         };
 
diff --git a/Gems/Atom/RPI/Code/Source/RPI.Edit/Material/MaterialTypeSourceData.cpp b/Gems/Atom/RPI/Code/Source/RPI.Edit/Material/MaterialTypeSourceData.cpp
index c8ce26d4e7..4d9d40cde2 100644
--- a/Gems/Atom/RPI/Code/Source/RPI.Edit/Material/MaterialTypeSourceData.cpp
+++ b/Gems/Atom/RPI/Code/Source/RPI.Edit/Material/MaterialTypeSourceData.cpp
@@ -95,8 +95,7 @@ namespace AZ
                     ;
 
                 serializeContext->Class<PropertyLayout>()
-                    ->Version(1)
-                    ->Field("version", &PropertyLayout::m_version)
+                    ->Version(2)
                     ->Field("groups", &PropertyLayout::m_groups)
                     ->Field("properties", &PropertyLayout::m_properties)
                     ;
@@ -317,8 +316,9 @@ namespace AZ
                 MaterialVersionUpdate materialVersionUpdate;
                 for (const auto& action : versionUpdate.m_actions)
                 {
-                    materialVersionUpdate.m_actions.push_back(
-                        MaterialVersionUpdate::Action("rename", { { "from", action.m_renameFrom }, { "to", action.m_renameTo } }));
+                    materialVersionUpdate.AddAction(MaterialVersionUpdate::Action(AZ::Name{ "rename" }, {
+                        { AZ::Name{ "from" }, AZ::Name{ action.m_renameFrom } },
+                        { AZ::Name{ "to" }, AZ::Name{ action.m_renameTo } } }));
                 }
                 materialTypeAssetCreator.AddVersionUpdate(versionUpdate.m_toVersion, materialVersionUpdate);
             }
diff --git a/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialAsset.cpp b/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialAsset.cpp
index eefa259ed3..1695319a64 100644
--- a/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialAsset.cpp
+++ b/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialAsset.cpp
@@ -6,6 +6,8 @@
  *
  */
 
+#pragma optimize("", off)
+
 #include <Atom/RPI.Reflect/Material/MaterialAsset.h>
 #include <Atom/RPI.Reflect/Material/MaterialPropertiesLayout.h>
 #include <Atom/RPI.Reflect/Material/MaterialFunctor.h>
@@ -107,10 +109,9 @@ namespace AZ
             if (!m_propertyNames.empty())
             {
                 const uint32_t materialTypeVersion = m_materialTypeAsset->GetVersion();
-                if (m_materialTypeVersion != materialTypeVersion)
+                if (m_materialTypeVersion < materialTypeVersion)
                 {
-                    const_cast<MaterialAsset*>(this)->RenamePropertyNames();
-                    const_cast<uint32_t&>(m_materialTypeVersion) = materialTypeVersion;
+                    const_cast<MaterialAsset*>(this)->ApplyVersionUpdates();
                 }
 
                 if (m_isDirty)
@@ -194,50 +195,16 @@ namespace AZ
             m_isDirty = false;
         } 
 
-        template <typename iteratorType>
-        void MaterialAsset::RenamePropertyNames(iteratorType start, iteratorType end)
+        void MaterialAsset::ApplyVersionUpdates()
         {
-            for (iteratorType it = start; it != end; ++it)
+            for (int i = 0; i < static_cast<int>(m_materialTypeAsset->GetVersion() - m_materialTypeVersion); ++i)
             {
-                for (auto& propertyName : m_propertyNames)
-                {
-                    const auto toFromIterator = it->find(propertyName.GetCStr());
-                    if (toFromIterator != it->end())
-                    {
-                        propertyName = AZ::Name{ toFromIterator->second };
-                    }
-                }
-            }
-        }
+                const auto& versionUpdate = m_materialTypeAsset->GetMaterialVersionUpdate(m_materialTypeVersion + i + 1);
 
-        void MaterialAsset::RenamePropertyNames()
-        {
-            // construct toFrom map in ascending order of version.
-            AZStd::vector<AZStd::map<AZStd::string, AZStd::string>> versionToFrom;
-
-            const bool ascending = m_materialTypeVersion < m_materialTypeAsset->GetVersion();
-            for (int i = 0; i < AZStd::abs(static_cast<int>(m_materialTypeVersion - m_materialTypeAsset->GetVersion())); ++i)
-            {
-                const auto& versionUpdate = m_materialTypeAsset->GetMaterialVersionUpdate((m_materialTypeVersion < m_materialTypeAsset->GetVersion() ? m_materialTypeVersion : m_materialTypeAsset->GetVersion()) + i + 1);
-
-                versionToFrom.push_back();
-                for (const auto& action : versionUpdate.m_actions)
-                {
-                    const AZStd::string from = ascending ? action.m_argsMap.find("from")->second : action.m_argsMap.find("to")->second;
-                    const AZStd::string to = ascending ? action.m_argsMap.find("to")->second : action.m_argsMap.find("from")->second;
-
-                    versionToFrom[i][from] = to;
-                }
+                versionUpdate.ApplyVersionUpdates(*this);
             }
 
-            if (ascending)
-            {
-                RenamePropertyNames(versionToFrom.cbegin(), versionToFrom.cend());
-            }
-            else
-            {
-                RenamePropertyNames(versionToFrom.crbegin(), versionToFrom.crend());
-            }
+            m_materialTypeVersion = m_materialTypeAsset->GetVersion();
         }
 
         void MaterialAsset::ReinitializeMaterialTypeAsset(Data::Asset<Data::AssetData> asset)
@@ -287,3 +254,5 @@ namespace AZ
 
     } // namespace RPI
 } // namespace AZ
+
+#pragma optimize("", on)
diff --git a/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialTypeAsset.cpp b/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialTypeAsset.cpp
index 9209942f28..a876028599 100644
--- a/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialTypeAsset.cpp
+++ b/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialTypeAsset.cpp
@@ -169,10 +169,10 @@ namespace AZ
             return m_version;
         }
 
-        const AZ::RPI::MaterialVersionUpdate MaterialTypeAsset::GetMaterialVersionUpdate(uint32_t version) const
+        MaterialVersionUpdate MaterialTypeAsset::GetMaterialVersionUpdate(uint32_t toVersion) const
         {
-            const auto it = m_materialVersionUpdateMap.find(version);
-            return it != m_materialVersionUpdateMap.end() ? it->second : MaterialVersionUpdate(version);
+            const auto it = m_materialVersionUpdateMap.find(toVersion);
+            return it != m_materialVersionUpdateMap.end() ? it->second : MaterialVersionUpdate(toVersion);
         }
 
         void MaterialTypeAsset::SetReady()
diff --git a/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialTypeAssetCreator.cpp b/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialTypeAssetCreator.cpp
index f10ae42266..79336692ec 100644
--- a/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialTypeAssetCreator.cpp
+++ b/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialTypeAssetCreator.cpp
@@ -102,18 +102,18 @@ namespace AZ
 
         bool MaterialTypeAssetCreator::ValidateMaterialVersion()
         {
-            AZStd::vector<AZStd::string> renamedPropertieNames;
+            AZStd::vector<AZ::Name> renamedPropertyNames;
             const auto& materialVersionUpdate = m_asset->GetMaterialVersionUpdate(m_asset->m_version);
-            for (const auto& action : materialVersionUpdate.m_actions)
+            for (const auto& action : materialVersionUpdate.GetActions())
             {
-                const auto it = action.m_argsMap.find("to");
+                const auto it = action.m_argsMap.find(AZ::Name{ "to" });
                 if (it != action.m_argsMap.end())
                 {
-                    renamedPropertieNames.push_back(it->second);
+                    renamedPropertyNames.push_back(it->second);
                 }
             }
 
-            for (const auto& propertyName : renamedPropertieNames)
+            for (const auto& propertyName : renamedPropertyNames)
             {
                 const auto propertyIndex = m_asset->m_materialPropertiesLayout->FindPropertyIndex(AZ::Name{ propertyName });
                 if (!propertyIndex.IsValid())
@@ -121,7 +121,7 @@ namespace AZ
                     ReportError(AZStd::string::format(
                             "Renamed property '%s' not found in material property layout. Check that the property name has been "
                             "upgraded to the correct version",
-                            propertyName.c_str())
+                            propertyName.GetCStr())
                         .c_str());
                     return false;
                 }
@@ -157,7 +157,7 @@ namespace AZ
             m_asset->m_version = version;
         }
 
-        void MaterialTypeAssetCreator::AddVersionUpdate(uint32_t toVersion, MaterialVersionUpdate materialVersionUpdate)
+        void MaterialTypeAssetCreator::AddVersionUpdate(uint32_t toVersion, const MaterialVersionUpdate& materialVersionUpdate)
         {
             m_asset->m_materialVersionUpdateMap[toVersion] = materialVersionUpdate;
         }
diff --git a/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialVersionUpdate.cpp b/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialVersionUpdate.cpp
index fb2143d020..faa571e403 100644
--- a/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialVersionUpdate.cpp
+++ b/Gems/Atom/RPI/Code/Source/RPI.Reflect/Material/MaterialVersionUpdate.cpp
@@ -7,6 +7,7 @@
  */
 
 #include <Atom/RPI.Reflect/Material/MaterialVersionUpdate.h>
+#include <Atom/RPI.Reflect/Material/MaterialAsset.h>
 #include <AzCore/Serialization/SerializeContext.h>
 
 namespace AZ
@@ -40,16 +41,59 @@ namespace AZ
         {
         }
 
-        MaterialVersionUpdate::Action::Action(const AZStd::string& operation, const AZStd::initializer_list<AZStd::pair<AZStd::string, AZStd::string>>& args)
+        uint32_t MaterialVersionUpdate::GetVersion() const
+        {
+            return m_toVersion;
+        }
+
+        void MaterialVersionUpdate::SetVersion(uint32_t toVersion)
+        {
+            m_toVersion = toVersion;
+        }
+
+        void MaterialVersionUpdate::ApplyVersionUpdates(MaterialAsset& materialAsset) const
+        {
+            // collect all renames within this version update
+            AZStd::unordered_map<AZ::Name, AZ::Name> renameToFrom;
+            for (const auto& action : m_actions)
+            {
+                const AZ::Name from = action.m_argsMap.find(AZ::Name{ "from" })->second;
+                const AZ::Name to = action.m_argsMap.find(AZ::Name{ "to" })->second;
+
+                renameToFrom[from] = to;
+            }
+
+            // apply rename actions
+            for (auto& propertyName : materialAsset.m_propertyNames)
+            {
+                const auto toFromIterator = renameToFrom.find(propertyName);
+                if (toFromIterator != renameToFrom.end())
+                {
+                    propertyName = AZ::Name{ toFromIterator->second };
+                }
+            }
+        }
+
+        const AZ::RPI::MaterialVersionUpdate::Actions& MaterialVersionUpdate::GetActions() const
+        {
+            return m_actions;
+        }
+
+        void MaterialVersionUpdate::AddAction(const Action& action)
+        {
+            m_actions.push_back(action);
+        }
+
+        MaterialVersionUpdate::Action::Action(const AZ::Name& operation, const AZStd::initializer_list<AZStd::pair<AZ::Name, AZ::Name>>& args)
             : m_operation(operation)
         {
             for (const auto& arg : args)
             {
-                AddArgs(arg.first, arg.second);
+                AddArg(arg.first, arg.second);
             }
         }
 
-        void MaterialVersionUpdate::Action::AddArgs(const AZStd::string& key, const AZStd::string& argument)
+        void MaterialVersionUpdate::Action::AddArg(const AZ::Name& key, const AZ::Name& argument)
         {
             m_argsMap[key] = argument;
         }
diff --git a/Gems/Atom/RPI/Code/Tests/Material/MaterialAssetTests.cpp b/Gems/Atom/RPI/Code/Tests/Material/MaterialAssetTests.cpp
index ce223ceb35..3191797ded 100644
--- a/Gems/Atom/RPI/Code/Tests/Material/MaterialAssetTests.cpp
+++ b/Gems/Atom/RPI/Code/Tests/Material/MaterialAssetTests.cpp
@@ -63,6 +63,17 @@ namespace UnitTest
 
             RPITestFixture::TearDown();
         }
+
+        void UpgradeAndValidateMaterialAsset(Data::Asset<MaterialAsset> materialAsset, Data::Asset<MaterialTypeAsset> upgradedMaterialTypeAsset)
+        {
+            // Set materialTypeAsset to the upgraded version.
+            EXPECT_EQ(1, materialAsset->m_materialTypeVersion);
+            materialAsset->m_materialTypeAsset = upgradedMaterialTypeAsset;
+            materialAsset->ApplyVersionUpdates();
+
+            EXPECT_EQ(2, materialAsset->m_materialTypeVersion);
+            EXPECT_EQ(AZ::Name{ "MyBoolNext" }, materialAsset->m_propertyNames[0]);
+        }
     };
 
     TEST_F(MaterialAssetTests, Basic)
@@ -202,6 +213,48 @@ namespace UnitTest
         EXPECT_EQ(serializedAsset->GetPropertyValues()[8].GetValue<Data::Asset<ImageAsset>>(), streamingImageAsset);
     }
 
+    TEST_F(MaterialAssetTests, UpgradeMaterialAsset)
+    {
+        auto materialSrgLayout = CreateCommonTestMaterialSrgLayout();
+
+        auto shaderAsset = CreateTestShaderAsset(Uuid::CreateRandom(), materialSrgLayout);
+
+        Data::Asset<MaterialTypeAsset> testMaterialTypeAssetV1;
+        MaterialTypeAssetCreator materialTypeCreator;
+        materialTypeCreator.Begin(Uuid::CreateRandom());
+        materialTypeCreator.AddShader(shaderAsset);
+        AddMaterialPropertyForSrg(materialTypeCreator, Name{ "MyBool" }, MaterialPropertyDataType::Bool, Name{ "m_bool" });
+        materialTypeCreator.SetPropertyValue(Name{ "MyBool" }, true);
+        EXPECT_TRUE(materialTypeCreator.End(testMaterialTypeAssetV1));
+
+        // Construct the material asset with materialTypeAsset version 1
+        Data::AssetId assetId(Uuid::CreateRandom());
+
+        MaterialAssetCreator creator;
+        creator.Begin(assetId, *testMaterialTypeAssetV1);
+        creator.SetPropertyValue(Name{ "MyBool" }, true);
+        Data::Asset<MaterialAsset> materialAsset;
+        EXPECT_TRUE(creator.End(materialAsset));
+
+        // Prepare material type asset version 2 with the update actions
+        MaterialVersionUpdate versionUpdate(2);
+        versionUpdate.AddAction(MaterialVersionUpdate::Action(AZ::Name{ "rename" }, {
+            { Name{ "from" }, Name{ "MyBool" } },
+            { Name{ "to" }, Name{ "MyBoolNext" } } }));
+
+        Data::Asset<MaterialTypeAsset> testMaterialTypeAssetV2;
+        materialTypeCreator.Begin(Uuid::CreateRandom());
+        materialTypeCreator.SetVersion(versionUpdate.GetVersion());
+        materialTypeCreator.AddVersionUpdate(versionUpdate.GetVersion(), versionUpdate);
+        materialTypeCreator.AddShader(shaderAsset);
+        AddMaterialPropertyForSrg(materialTypeCreator, Name{ "MyBoolNext" }, MaterialPropertyDataType::Bool, Name{ "m_bool" });
+        materialTypeCreator.SetPropertyValue(Name{ "MyBoolNext" }, true);
+        EXPECT_TRUE(materialTypeCreator.End(testMaterialTypeAssetV2));
+
+        // Upgrade the material asset with the materialTypeAsset v2 and verify
+        UpgradeAndValidateMaterialAsset(materialAsset, testMaterialTypeAssetV2);
+    }
+
     TEST_F(MaterialAssetTests, Error_NoBegin)
     {
         Data::AssetId assetId(Uuid::CreateRandom());
diff --git a/Gems/Atom/RPI/Code/Tests/Material/MaterialTypeAssetTests.cpp b/Gems/Atom/RPI/Code/Tests/Material/MaterialTypeAssetTests.cpp
index b9774c84d9..6329ef8d48 100644
--- a/Gems/Atom/RPI/Code/Tests/Material/MaterialTypeAssetTests.cpp
+++ b/Gems/Atom/RPI/Code/Tests/Material/MaterialTypeAssetTests.cpp
@@ -14,6 +14,7 @@
 #include <Material/MaterialAssetTestUtils.h>
 
 #include <Atom/RPI.Reflect/Material/MaterialTypeAssetCreator.h>
+#include <Atom/RPI.Reflect/Material/MaterialVersionUpdate.h>
 #include <Atom/RPI.Reflect/Material/MaterialFunctor.h>
 #include <Atom/RPI.Reflect/Material/MaterialPropertiesLayout.h>
 #include <Atom/RPI.Public/Shader/ShaderResourceGroup.h>
@@ -153,6 +154,14 @@ namespace UnitTest
             MaterialTypeAssetCreator materialTypeCreator;
             materialTypeCreator.Begin(assetId);
 
+            // Version updates
+            MaterialVersionUpdate versionUpdate(2);
+            versionUpdate.AddAction(MaterialVersionUpdate::Action(AZ::Name{ "rename" }, {
+                { Name{ "from" }, Name{ "EnableSpecialPassPrev" } },
+                { Name{ "to" }, Name{ "EnableSpecialPass" } } }));
+            materialTypeCreator.SetVersion(versionUpdate.GetVersion());
+            materialTypeCreator.AddVersionUpdate(versionUpdate.GetVersion(), versionUpdate);
+
             // Built-in shader
 
             materialTypeCreator.AddShader(m_testShaderAsset);
@@ -198,7 +207,7 @@ namespace UnitTest
         {
             EXPECT_EQ(m_testMaterialSrgLayout, materialTypeAsset->GetMaterialSrgLayout());
             EXPECT_EQ(5, materialTypeAsset->GetMaterialPropertiesLayout()->GetPropertyCount());
-
+            //EXPECT_EQ(2, materialTypeAsset->GetVersion());
             // Check aliased properties
 
             const MaterialPropertyIndex colorIndex = materialTypeAsset->GetMaterialPropertiesLayout()->FindPropertyIndex(Name{ "MyColor" });
@@ -490,6 +499,32 @@ namespace UnitTest
         });
     }
 
+    TEST_F(MaterialTypeAssetTests, Error_InvalidMaterialVersionUpdate)
+    {
+        Data::Asset<MaterialTypeAsset> materialTypeAsset;
+
+        Data::AssetId assetId(Uuid::CreateRandom());
+
+        MaterialTypeAssetCreator materialTypeCreator;
+        materialTypeCreator.Begin(assetId);
+
+        // Invalid version updates
+        MaterialVersionUpdate versionUpdate(2);
+        versionUpdate.AddAction(MaterialVersionUpdate::Action(AZ::Name{ "rename" }, {
+            { Name{ "from" }, Name{ "EnableSpecialPassPrev" } },
+            { Name{ "to" }, Name{ "InvalidPropertyName" } } }));
+        materialTypeCreator.SetVersion(versionUpdate.GetVersion());
+        materialTypeCreator.AddVersionUpdate(versionUpdate.GetVersion(), versionUpdate);
+        materialTypeCreator.AddShader(m_testShaderAsset);
+
+        materialTypeCreator.BeginMaterialProperty(Name{ "EnableSpecialPass" }, MaterialPropertyDataType::Bool);
+        materialTypeCreator.EndMaterialProperty();
+
+        AZ_TEST_START_ASSERTTEST;
+        EXPECT_FALSE(materialTypeCreator.End(materialTypeAsset));
+        AZ_TEST_STOP_ASSERTTEST(1);
+        EXPECT_EQ(1, materialTypeCreator.GetErrorCount());
+    }
 
     TEST_F(MaterialTypeAssetTests, MaterialTypeWithNoSRGOrProperties)
     {
diff --git a/Gems/Atom/RPI/Code/Tests/Material/MaterialTypeSourceDataTests.cpp b/Gems/Atom/RPI/Code/Tests/Material/MaterialTypeSourceDataTests.cpp
index 179dc7c966..7766c1f8d8 100644
--- a/Gems/Atom/RPI/Code/Tests/Material/MaterialTypeSourceDataTests.cpp
+++ b/Gems/Atom/RPI/Code/Tests/Material/MaterialTypeSourceDataTests.cpp
@@ -978,8 +978,16 @@ namespace UnitTest
         const AZStd::string inputJson = R"(
             {
                 "description": "This is a general description about the material",
+                "version": 2,
+                "versionUpdates": [
+                    {
+                        "toVersion": 2,
+                        "actions": [
+                            { "op": "rename", "from": "groupA.fooPrev", "to": "groupA.foo" }
+                        ]
+                    }
+                ],
                 "propertyLayout": {
-                    "version": 2,
                     "groups": [
                         {
                             "id": "groupA",
@@ -1061,9 +1069,12 @@ namespace UnitTest
         JsonTestResult loadResult = LoadTestDataFromJson(material, inputJson);
 
         EXPECT_EQ(material.m_description, "This is a general description about the material");
-
-        EXPECT_EQ(material.m_propertyLayout.m_version, 2);
-
+        EXPECT_EQ(material.m_version, 2);
+        EXPECT_EQ(material.m_versionUpdates.size(), 1);
+        EXPECT_EQ(material.m_versionUpdates[0].m_toVersion, 2);
+        EXPECT_EQ(material.m_versionUpdates[0].m_actions[0].m_operation, "rename");
+        EXPECT_EQ(material.m_versionUpdates[0].m_actions[0].m_renameFrom, "groupA.fooPrev");
+        EXPECT_EQ(material.m_versionUpdates[0].m_actions[0].m_renameTo, "groupA.foo");
         EXPECT_EQ(material.m_propertyLayout.m_groups.size(), 2);
         EXPECT_TRUE(material.FindGroup("groupA") != nullptr);
         EXPECT_TRUE(material.FindGroup("groupB") != nullptr);
diff --git a/Gems/Atom/Tools/MaterialEditor/Code/Source/Document/MaterialDocument.cpp b/Gems/Atom/Tools/MaterialEditor/Code/Source/Document/MaterialDocument.cpp
index d032f35e38..ab8f9ff1a4 100644
--- a/Gems/Atom/Tools/MaterialEditor/Code/Source/Document/MaterialDocument.cpp
+++ b/Gems/Atom/Tools/MaterialEditor/Code/Source/Document/MaterialDocument.cpp
@@ -231,7 +231,6 @@ namespace MaterialEditor
 
         // create source data from properties
         MaterialSourceData sourceData;
-        sourceData.m_propertyLayoutVersion = m_materialTypeSourceData.m_propertyLayout.m_version;
         sourceData.m_materialType = m_materialSourceData.m_materialType;
         sourceData.m_parentMaterial = m_materialSourceData.m_parentMaterial;
 
@@ -303,7 +302,6 @@ namespace MaterialEditor
 
         // create source data from properties
         MaterialSourceData sourceData;
-        sourceData.m_propertyLayoutVersion = m_materialTypeSourceData.m_propertyLayout.m_version;
         sourceData.m_materialType = m_materialSourceData.m_materialType;
         sourceData.m_parentMaterial = m_materialSourceData.m_parentMaterial;
 
@@ -374,7 +372,6 @@ namespace MaterialEditor
 
         // create source data from properties
         MaterialSourceData sourceData;
-        sourceData.m_propertyLayoutVersion = m_materialTypeSourceData.m_propertyLayout.m_version;
         sourceData.m_materialType = m_materialSourceData.m_materialType;
 
         // Only assign a parent path if the source was a .material
diff --git a/Gems/AtomLyIntegration/CommonFeatures/Code/Source/Material/EditorMaterialComponentUtil.cpp b/Gems/AtomLyIntegration/CommonFeatures/Code/Source/Material/EditorMaterialComponentUtil.cpp
index e7059ccdf7..65ddef47e5 100644
--- a/Gems/AtomLyIntegration/CommonFeatures/Code/Source/Material/EditorMaterialComponentUtil.cpp
+++ b/Gems/AtomLyIntegration/CommonFeatures/Code/Source/Material/EditorMaterialComponentUtil.cpp
@@ -99,7 +99,6 @@ namespace AZ
             {
                 // Construct the material source data object that will be exported
                 AZ::RPI::MaterialSourceData exportData;
-                exportData.m_propertyLayoutVersion = editData.m_materialTypeSourceData.m_propertyLayout.m_version;
 
                 // Converting absolute material paths to relative paths
                 bool result = false;