diff --git a/.github/workflows/test-sim-self-update.yml b/.github/workflows/test-sim-self-update.yml
index 92dc48db..a447f235 100644
--- a/.github/workflows/test-sim-self-update.yml
+++ b/.github/workflows/test-sim-self-update.yml
@@ -61,7 +61,13 @@ jobs:
             echo "--- apt-mirrors.txt ---"
             cat /etc/apt/apt-mirrors.txt || true
 
-      - name: Run self-update test
+      - name: Run self-update test (internal flash)
         run: |
           cp config/examples/sim-self-update.config .config
           make test-sim-self-update
+
+      - name: Run self-update test (external flash)
+        run: |
+          make clean
+          cp config/examples/sim-self-update-ext.config .config
+          make test-sim-self-update-ext
diff --git a/config/examples/sim-self-update-ext.config b/config/examples/sim-self-update-ext.config
new file mode 100644
index 00000000..11bb1b00
--- /dev/null
+++ b/config/examples/sim-self-update-ext.config
@@ -0,0 +1,21 @@
+ARCH=sim
+TARGET=sim
+SIGN?=ED25519
+HASH?=SHA256
+WOLFBOOT_SMALL_STACK?=0
+SPI_FLASH=0
+EXT_FLASH=1
+DEBUG=1
+RAM_CODE=1
+WOLFBOOT_VERSION=1
+
+# sizes should be multiple of system page size
+WOLFBOOT_PARTITION_SIZE=0x40000
+WOLFBOOT_SECTOR_SIZE=0x1000
+WOLFBOOT_PARTITION_BOOT_ADDRESS=0x20000
+# Update and swap on external flash (address 0x00000)
+WOLFBOOT_PARTITION_UPDATE_ADDRESS=0x00000
+WOLFBOOT_PARTITION_SWAP_ADDRESS=0x40000
+
+# required for keytools
+WOLFBOOT_FIXED_PARTITIONS=1
diff --git a/tools/test.mk b/tools/test.mk
index 8798319c..ff91bd80 100644
--- a/tools/test.mk
+++ b/tools/test.mk
@@ -266,6 +266,32 @@ test-sim-self-update: wolfboot.bin FORCE
 	@# Verify dummy payload was written to bootloader region, indicating the self update swapped images as expected
 	$(Q)cmp -n $$(wc -c < dummy_update.bin | awk '{print $$1}') dummy_update.bin internal_flash.dd && echo "=== Self-update test PASSED ==="
 
+# Test bootloader self-update mechanism with external flash
+test-sim-self-update-ext: wolfboot.bin FORCE
+	@echo "=== Simulator Self-Update Test (External Flash) ==="
+	@# Create dummy payload (0xAA pattern) and sign as wolfBoot update v2
+	$(Q)dd if=/dev/zero bs=$$(wc -c < wolfboot.bin | awk '{print $$1}') count=1 2>/dev/null | tr '\000' '\252' > dummy_update.bin
+	$(Q)$(SIGN_ENV) $(SIGN_TOOL) $(SIGN_OPTIONS) --wolfboot-update dummy_update.bin $(PRIVATE_KEY) 2
+	@# Create update partition with signed update and "pBOOT" trailer
+	$(Q)dd if=/dev/zero bs=$$(($(WOLFBOOT_PARTITION_SIZE))) count=1 2>/dev/null | tr '\000' '\377' > update_part.dd
+	$(Q)dd if=dummy_update_v2_signed.bin of=update_part.dd bs=1 conv=notrunc
+	$(Q)printf "pBOOT" | dd of=update_part.dd bs=1 seek=$$(($(WOLFBOOT_PARTITION_SIZE) - 5)) conv=notrunc
+	@# Create erased boot and swap partitions
+	$(Q)dd if=/dev/zero bs=$$(($(WOLFBOOT_PARTITION_SIZE))) count=1 2>/dev/null | tr '\000' '\377' > boot_part.dd
+	$(Q)dd if=/dev/zero bs=$$(($(WOLFBOOT_SECTOR_SIZE))) count=1 2>/dev/null | tr '\000' '\377' > erased_sec.dd
+	@# Assemble internal flash: wolfboot.bin at 0, empty boot partition
+	$(Q)$(BINASSEMBLE) internal_flash.dd \
+		0 wolfboot.bin \
+		$$(($(WOLFBOOT_PARTITION_BOOT_ADDRESS) - $(ARCH_FLASH_OFFSET))) boot_part.dd
+	@# Assemble external flash: update partition, swap sector
+	$(Q)$(BINASSEMBLE) external_flash.dd \
+		0 update_part.dd \
+		$(WOLFBOOT_PARTITION_SIZE) erased_sec.dd
+	@# Run simulator - self-update reads from external, writes to internal at offset 0
+	$(Q)./wolfboot.elf get_version || true
+	@# Verify dummy payload was written to bootloader region
+	$(Q)cmp -n $$(wc -c < dummy_update.bin | awk '{print $$1}') dummy_update.bin internal_flash.dd && echo "=== Self-update test (External Flash) PASSED ==="
+
 test-self-update: FORCE
 	@mv $(PRIVATE_KEY) private_key.old
 	@make clean factory.bin RAM_CODE=1 WOLFBOOT_VERSION=1 SIGN=$(SIGN)