diff --git a/homeassistant/components/lutron_caseta/__init__.py b/homeassistant/components/lutron_caseta/__init__.py
index 5e6d656bf35..385fdf94a62 100644
--- a/homeassistant/components/lutron_caseta/__init__.py
+++ b/homeassistant/components/lutron_caseta/__init__.py
@@ -375,19 +375,25 @@ def _handle_none_keypad_serial(keypad_device: dict, bridge_serial: int) -> str:
     return keypad_device["serial"] or f"{bridge_serial}_{keypad_device['device_id']}"
 
 
-def _area_name_from_id(areas: dict[str, dict], area_id: str) -> str:
+def _area_name_from_id(areas: dict[str, dict], area_id: str | None) -> str:
     """Return the full area name including parent(s)."""
-
     if area_id is None:
         return UNASSIGNED_AREA
+    return _construct_area_name_from_id(areas, area_id, [])
 
+
+def _construct_area_name_from_id(
+    areas: dict[str, dict], area_id: str, labels: list[str]
+) -> str:
+    """Recursively construct the full area name including parent(s)."""
     area = areas[area_id]
-    if "parent_id" in area:
-        parent_area = area["parent_id"]
-        if parent_area is not None:
-            return f"{_area_name_from_id(areas, parent_area)} {area['name']}"
+    parent_area_id = area["parent_id"]
+    if parent_area_id is None:
+        # This is the root area, return last area
+        return " ".join(labels)
 
-    return area["name"]
+    labels.insert(0, area["name"])
+    return _construct_area_name_from_id(areas, parent_area_id, labels)
 
 
 @callback
diff --git a/homeassistant/components/lutron_caseta/manifest.json b/homeassistant/components/lutron_caseta/manifest.json
index ad933dc0a69..b4f790292c4 100644
--- a/homeassistant/components/lutron_caseta/manifest.json
+++ b/homeassistant/components/lutron_caseta/manifest.json
@@ -2,7 +2,7 @@
   "domain": "lutron_caseta",
   "name": "Lutron Cas\u00e9ta",
   "documentation": "https://www.home-assistant.io/integrations/lutron_caseta",
-  "requirements": ["pylutron-caseta==0.16.0"],
+  "requirements": ["pylutron-caseta==0.17.1"],
   "config_flow": true,
   "zeroconf": ["_leap._tcp.local."],
   "homekit": {
diff --git a/requirements_all.txt b/requirements_all.txt
index c6eaf9ec492..dd1a8e53270 100644
--- a/requirements_all.txt
+++ b/requirements_all.txt
@@ -1688,7 +1688,7 @@ pylitejet==0.3.0
 pylitterbot==2022.10.2
 
 # homeassistant.components.lutron_caseta
-pylutron-caseta==0.16.0
+pylutron-caseta==0.17.1
 
 # homeassistant.components.lutron
 pylutron==0.2.8
diff --git a/requirements_test_all.txt b/requirements_test_all.txt
index e2c6020a5bd..72f67faf438 100644
--- a/requirements_test_all.txt
+++ b/requirements_test_all.txt
@@ -1189,7 +1189,7 @@ pylitejet==0.3.0
 pylitterbot==2022.10.2
 
 # homeassistant.components.lutron_caseta
-pylutron-caseta==0.16.0
+pylutron-caseta==0.17.1
 
 # homeassistant.components.mailgun
 pymailgunner==1.4
diff --git a/tests/components/lutron_caseta/__init__.py b/tests/components/lutron_caseta/__init__.py
index c5d63c9e256..5e3db30ad5b 100644
--- a/tests/components/lutron_caseta/__init__.py
+++ b/tests/components/lutron_caseta/__init__.py
@@ -129,13 +129,14 @@ class MockBridge:
     def load_areas(self):
         """Loak mock areas into self.areas."""
         return {
-            "898": {"id": "898", "name": "Basement", "parent_id": None},
+            "3": {"id": "3", "name": "House", "parent_id": None},
+            "898": {"id": "898", "name": "Basement", "parent_id": "3"},
             "822": {"id": "822", "name": "Bedroom", "parent_id": "898"},
             "910": {"id": "910", "name": "Bathroom", "parent_id": "898"},
-            "1024": {"id": "1024", "name": "Master Bedroom", "parent_id": None},
-            "1025": {"id": "1025", "name": "Kitchen", "parent_id": None},
-            "1026": {"id": "1026", "name": "Dining Room", "parent_id": None},
-            "1205": {"id": "1205", "name": "Hallway", "parent_id": None},
+            "1024": {"id": "1024", "name": "Master Bedroom", "parent_id": "3"},
+            "1025": {"id": "1025", "name": "Kitchen", "parent_id": "3"},
+            "1026": {"id": "1026", "name": "Dining Room", "parent_id": "3"},
+            "1205": {"id": "1205", "name": "Hallway", "parent_id": "3"},
         }
 
     def load_devices(self):
diff --git a/tests/components/lutron_caseta/test_diagnostics.py b/tests/components/lutron_caseta/test_diagnostics.py
index 80643737aaa..98a5b26e809 100644
--- a/tests/components/lutron_caseta/test_diagnostics.py
+++ b/tests/components/lutron_caseta/test_diagnostics.py
@@ -41,13 +41,14 @@ async def test_diagnostics(hass, hass_client) -> None:
     assert diag == {
         "bridge_data": {
             "areas": {
-                "898": {"id": "898", "name": "Basement", "parent_id": None},
+                "3": {"id": "3", "name": "House", "parent_id": None},
+                "898": {"id": "898", "name": "Basement", "parent_id": "3"},
                 "822": {"id": "822", "name": "Bedroom", "parent_id": "898"},
                 "910": {"id": "910", "name": "Bathroom", "parent_id": "898"},
-                "1024": {"id": "1024", "name": "Master Bedroom", "parent_id": None},
-                "1025": {"id": "1025", "name": "Kitchen", "parent_id": None},
-                "1026": {"id": "1026", "name": "Dining Room", "parent_id": None},
-                "1205": {"id": "1205", "name": "Hallway", "parent_id": None},
+                "1024": {"id": "1024", "name": "Master Bedroom", "parent_id": "3"},
+                "1025": {"id": "1025", "name": "Kitchen", "parent_id": "3"},
+                "1026": {"id": "1026", "name": "Dining Room", "parent_id": "3"},
+                "1205": {"id": "1205", "name": "Hallway", "parent_id": "3"},
             },
             "buttons": {
                 "111": {