diff --git a/homeassistant/components/adguard/.translations/en.json b/homeassistant/components/adguard/.translations/en.json
index 6e3b5b58503..8bfb8516fd8 100644
--- a/homeassistant/components/adguard/.translations/en.json
+++ b/homeassistant/components/adguard/.translations/en.json
@@ -1,6 +1,8 @@
 {
     "config": {
         "abort": {
+            "adguard_home_outdated": "This integration requires AdGuard Home {minimal_version} or higher, you have {current_version}.",
+            "adguard_home_addon_outdated": "This integration requires AdGuard Home {minimal_version} or higher, you have {current_version}. Please update your Hass.io AdGuard Home add-on.",
             "existing_instance_updated": "Updated existing configuration.",
             "single_instance_allowed": "Only a single configuration of AdGuard Home is allowed."
         },
diff --git a/homeassistant/components/adguard/__init__.py b/homeassistant/components/adguard/__init__.py
index ba716ae0f9c..bb53d00aab8 100644
--- a/homeassistant/components/adguard/__init__.py
+++ b/homeassistant/components/adguard/__init__.py
@@ -1,8 +1,9 @@
 """Support for AdGuard Home."""
+from distutils.version import LooseVersion
 import logging
 from typing import Any, Dict
 
-from adguardhome import AdGuardHome, AdGuardHomeError
+from adguardhome import AdGuardHome, AdGuardHomeConnectionError, AdGuardHomeError
 import voluptuous as vol
 
 from homeassistant.components.adguard.const import (
@@ -10,6 +11,7 @@ from homeassistant.components.adguard.const import (
     DATA_ADGUARD_CLIENT,
     DATA_ADGUARD_VERION,
     DOMAIN,
+    MIN_ADGUARD_HOME_VERSION,
     SERVICE_ADD_URL,
     SERVICE_DISABLE_URL,
     SERVICE_ENABLE_URL,
@@ -27,6 +29,7 @@ from homeassistant.const import (
     CONF_USERNAME,
     CONF_VERIFY_SSL,
 )
+from homeassistant.exceptions import ConfigEntryNotReady
 from homeassistant.helpers import config_validation as cv
 from homeassistant.helpers.aiohttp_client import async_get_clientsession
 from homeassistant.helpers.entity import Entity
@@ -64,6 +67,17 @@ async def async_setup_entry(hass: HomeAssistantType, entry: ConfigEntry) -> bool
 
     hass.data.setdefault(DOMAIN, {})[DATA_ADGUARD_CLIENT] = adguard
 
+    try:
+        version = await adguard.version()
+    except AdGuardHomeConnectionError as exception:
+        raise ConfigEntryNotReady from exception
+
+    if LooseVersion(MIN_ADGUARD_HOME_VERSION) > LooseVersion(version):
+        _LOGGER.error(
+            "This integration requires AdGuard Home v0.99.0 or higher to work correctly"
+        )
+        raise ConfigEntryNotReady
+
     for component in "sensor", "switch":
         hass.async_create_task(
             hass.config_entries.async_forward_entry_setup(entry, component)
diff --git a/homeassistant/components/adguard/config_flow.py b/homeassistant/components/adguard/config_flow.py
index 5a096aeceed..9f5645edb8d 100644
--- a/homeassistant/components/adguard/config_flow.py
+++ b/homeassistant/components/adguard/config_flow.py
@@ -1,11 +1,12 @@
 """Config flow to configure the AdGuard Home integration."""
+from distutils.version import LooseVersion
 import logging
 
 from adguardhome import AdGuardHome, AdGuardHomeConnectionError
 import voluptuous as vol
 
 from homeassistant import config_entries
-from homeassistant.components.adguard.const import DOMAIN
+from homeassistant.components.adguard.const import DOMAIN, MIN_ADGUARD_HOME_VERSION
 from homeassistant.config_entries import ConfigFlow
 from homeassistant.const import (
     CONF_HOST,
@@ -83,11 +84,20 @@ class AdGuardHomeFlowHandler(ConfigFlow):
         )
 
         try:
-            await adguard.version()
+            version = await adguard.version()
         except AdGuardHomeConnectionError:
             errors["base"] = "connection_error"
             return await self._show_setup_form(errors)
 
+        if LooseVersion(MIN_ADGUARD_HOME_VERSION) > LooseVersion(version):
+            return self.async_abort(
+                reason="adguard_home_outdated",
+                description_placeholders={
+                    "current_version": version,
+                    "minimal_version": MIN_ADGUARD_HOME_VERSION,
+                },
+            )
+
         return self.async_create_entry(
             title=user_input[CONF_HOST],
             data={
@@ -156,11 +166,20 @@ class AdGuardHomeFlowHandler(ConfigFlow):
         )
 
         try:
-            await adguard.version()
+            version = await adguard.version()
         except AdGuardHomeConnectionError:
             errors["base"] = "connection_error"
             return await self._show_hassio_form(errors)
 
+        if LooseVersion(MIN_ADGUARD_HOME_VERSION) > LooseVersion(version):
+            return self.async_abort(
+                reason="adguard_home_addon_outdated",
+                description_placeholders={
+                    "current_version": version,
+                    "minimal_version": MIN_ADGUARD_HOME_VERSION,
+                },
+            )
+
         return self.async_create_entry(
             title=self._hassio_discovery["addon"],
             data={
diff --git a/homeassistant/components/adguard/const.py b/homeassistant/components/adguard/const.py
index c77d76a70cf..eb12a9c163f 100644
--- a/homeassistant/components/adguard/const.py
+++ b/homeassistant/components/adguard/const.py
@@ -7,6 +7,8 @@ DATA_ADGUARD_VERION = "adguard_version"
 
 CONF_FORCE = "force"
 
+MIN_ADGUARD_HOME_VERSION = "v0.99.0"
+
 SERVICE_ADD_URL = "add_url"
 SERVICE_DISABLE_URL = "disable_url"
 SERVICE_ENABLE_URL = "enable_url"
diff --git a/homeassistant/components/adguard/manifest.json b/homeassistant/components/adguard/manifest.json
index f207e6dff09..45fd21f4fc8 100644
--- a/homeassistant/components/adguard/manifest.json
+++ b/homeassistant/components/adguard/manifest.json
@@ -4,7 +4,7 @@
     "config_flow": true,
     "documentation": "https://www.home-assistant.io/integrations/adguard",
     "requirements": [
-        "adguardhome==0.2.1"
+        "adguardhome==0.3.0"
     ],
     "dependencies": [],
     "codeowners": [
diff --git a/homeassistant/components/adguard/strings.json b/homeassistant/components/adguard/strings.json
index b3966bca820..d33ba2b397a 100644
--- a/homeassistant/components/adguard/strings.json
+++ b/homeassistant/components/adguard/strings.json
@@ -23,8 +23,10 @@
             "connection_error": "Failed to connect."
         },
         "abort": {
-            "single_instance_allowed": "Only a single configuration of AdGuard Home is allowed.",
-            "existing_instance_updated": "Updated existing configuration."
+            "adguard_home_outdated": "This integration requires AdGuard Home {minimal_version} or higher, you have {current_version}.",
+            "adguard_home_addon_outdated": "This integration requires AdGuard Home {minimal_version} or higher, you have {current_version}. Please update your Hass.io AdGuard Home add-on.",
+            "existing_instance_updated": "Updated existing configuration.",
+            "single_instance_allowed": "Only a single configuration of AdGuard Home is allowed."
         }
     }
-}
+}
\ No newline at end of file
diff --git a/requirements_all.txt b/requirements_all.txt
index d829377d8a2..d30d01f02c0 100644
--- a/requirements_all.txt
+++ b/requirements_all.txt
@@ -115,7 +115,7 @@ adafruit-circuitpython-mcp230xx==1.1.2
 adb-shell==0.0.7
 
 # homeassistant.components.adguard
-adguardhome==0.2.1
+adguardhome==0.3.0
 
 # homeassistant.components.frontier_silicon
 afsapi==0.0.4
diff --git a/requirements_test_all.txt b/requirements_test_all.txt
index cb0b56cb5ae..2a4fdf4eac7 100644
--- a/requirements_test_all.txt
+++ b/requirements_test_all.txt
@@ -52,7 +52,7 @@ abodepy==0.16.6
 adb-shell==0.0.7
 
 # homeassistant.components.adguard
-adguardhome==0.2.1
+adguardhome==0.3.0
 
 # homeassistant.components.geonetnz_quakes
 aio_geojson_geonetnz_quakes==0.10
diff --git a/tests/components/adguard/test_config_flow.py b/tests/components/adguard/test_config_flow.py
index ea5e5ad2276..dbda1e99a48 100644
--- a/tests/components/adguard/test_config_flow.py
+++ b/tests/components/adguard/test_config_flow.py
@@ -3,9 +3,9 @@ from unittest.mock import patch
 
 import aiohttp
 
-from homeassistant import data_entry_flow, config_entries
+from homeassistant import config_entries, data_entry_flow
 from homeassistant.components.adguard import config_flow
-from homeassistant.components.adguard.const import DOMAIN
+from homeassistant.components.adguard.const import DOMAIN, MIN_ADGUARD_HOME_VERSION
 from homeassistant.const import (
     CONF_HOST,
     CONF_PASSWORD,
@@ -65,7 +65,7 @@ async def test_full_flow_implementation(hass, aioclient_mock):
             FIXTURE_USER_INPUT[CONF_HOST],
             FIXTURE_USER_INPUT[CONF_PORT],
         ),
-        json={"version": "1.0"},
+        json={"version": "v0.99.0"},
         headers={"Content-Type": "application/json"},
     )
 
@@ -133,8 +133,19 @@ async def test_hassio_update_instance_not_running(hass):
     assert result["reason"] == "existing_instance_updated"
 
 
-async def test_hassio_update_instance_running(hass):
+async def test_hassio_update_instance_running(hass, aioclient_mock):
     """Test we only allow a single config flow."""
+    aioclient_mock.get(
+        "http://mock-adguard-updated:3000/control/status",
+        json={"version": "v0.99.0"},
+        headers={"Content-Type": "application/json"},
+    )
+    aioclient_mock.get(
+        "http://mock-adguard:3000/control/status",
+        json={"version": "v0.99.0"},
+        headers={"Content-Type": "application/json"},
+    )
+
     entry = MockConfigEntry(
         domain="adguard",
         data={
@@ -187,7 +198,7 @@ async def test_hassio_confirm(hass, aioclient_mock):
     """Test we can finish a config flow."""
     aioclient_mock.get(
         "http://mock-adguard:3000/control/status",
-        json={"version": "1.0"},
+        json={"version": "v0.99.0"},
         headers={"Content-Type": "application/json"},
     )
 
@@ -228,3 +239,54 @@ async def test_hassio_connection_error(hass, aioclient_mock):
     assert result["type"] == data_entry_flow.RESULT_TYPE_FORM
     assert result["step_id"] == "hassio_confirm"
     assert result["errors"] == {"base": "connection_error"}
+
+
+async def test_outdated_adguard_version(hass, aioclient_mock):
+    """Test we show abort when connecting with unsupported AdGuard version."""
+    aioclient_mock.get(
+        "{}://{}:{}/control/status".format(
+            "https" if FIXTURE_USER_INPUT[CONF_SSL] else "http",
+            FIXTURE_USER_INPUT[CONF_HOST],
+            FIXTURE_USER_INPUT[CONF_PORT],
+        ),
+        json={"version": "v0.98.0"},
+        headers={"Content-Type": "application/json"},
+    )
+
+    flow = config_flow.AdGuardHomeFlowHandler()
+    flow.hass = hass
+    result = await flow.async_step_user(user_input=None)
+    assert result["type"] == data_entry_flow.RESULT_TYPE_FORM
+    assert result["step_id"] == "user"
+
+    result = await flow.async_step_user(user_input=FIXTURE_USER_INPUT)
+    assert result["type"] == data_entry_flow.RESULT_TYPE_ABORT
+    assert result["reason"] == "adguard_home_outdated"
+    assert result["description_placeholders"] == {
+        "current_version": "v0.98.0",
+        "minimal_version": MIN_ADGUARD_HOME_VERSION,
+    }
+
+
+async def test_outdated_adguard_addon_version(hass, aioclient_mock):
+    """Test we show abort when connecting with unsupported AdGuard add-on version."""
+    aioclient_mock.get(
+        "http://mock-adguard:3000/control/status",
+        json={"version": "v0.98.0"},
+        headers={"Content-Type": "application/json"},
+    )
+
+    result = await hass.config_entries.flow.async_init(
+        "adguard",
+        data={"addon": "AdGuard Home Addon", "host": "mock-adguard", "port": 3000},
+        context={"source": "hassio"},
+    )
+
+    result = await hass.config_entries.flow.async_configure(result["flow_id"], {})
+
+    assert result["type"] == data_entry_flow.RESULT_TYPE_ABORT
+    assert result["reason"] == "adguard_home_addon_outdated"
+    assert result["description_placeholders"] == {
+        "current_version": "v0.98.0",
+        "minimal_version": MIN_ADGUARD_HOME_VERSION,
+    }