diff --git flag.inc flag.inc
index e1fa454..43b04a0 100644
--- flag.inc
+++ flag.inc
@@ -198,6 +198,7 @@ class flag_flag {
         'flag' => array(DRUPAL_AUTHENTICATED_RID),
         'unflag' => array(DRUPAL_AUTHENTICATED_RID),
       ),
+      'api_version' => '',
     );
 
     // Merge in options from the current link type.
@@ -615,7 +616,7 @@ class flag_flag {
    *
    * @private
    */
-  function _is_flagged($content_id, $uid, $sid) { 
+  function _is_flagged($content_id, $uid, $sid) {
     return db_result(db_query("SELECT fid FROM {flag_content} WHERE fid = %d AND uid = %d AND sid = %d AND content_id = %d", $this->fid, $uid, $sid, $content_id));
   }
 
diff --git flag.install flag.install
index c7b7194..624d7dd 100644
--- flag.install
+++ flag.install
@@ -70,6 +70,7 @@ function flag_enable() {
       'unflag_long' => 'Remove this post from your bookmarks',
       'unflag_message' => 'This post has been removed from your bookmarks',
       'types' => array('story', 'forum', 'blog'),
+      'api_version' => FLAG_API_VERSION,
     );
     $flag->form_input($configuration);
     $flag->save();
@@ -549,6 +550,32 @@ function flag_update_6202() {
   return $ret;
 }
 
+/**
+ * Upgrade flags that are not API version 2 compatibale.
+ */
+function flag_update_6203() {
+  $ret = array();
+  foreach (flag_get_flags() as $flag) {
+    $save = FALSE;
+    if (empty($flag->api_version) || $flag->api_version < 2 ) {
+      $flag->api_version = 2;
+      $save = TRUE;
+    }
+    if (!empty($flag->roles) && empty($flag->roles['flag'])) {
+      $flag->roles = array(
+        'flag' => $flag->roles,
+        'unflag' => $flag->roles,
+      );
+      $save = TRUE;
+    }
+    // Flag was updated and needs to be saved.
+    if ($save) {
+      $flag->save();
+    }
+  }
+  return $ret;
+}
+
 // This is a replacement for update_sql(). The latter doesn't support placeholders.
 function _flag_update_sql($sql) {
   $args = func_get_args();
diff --git flag.module flag.module
index edebd07..5fea372 100644
--- flag.module
+++ flag.module
@@ -6,6 +6,8 @@
  * The Flag module.
  */
 
+define('FLAG_API_VERSION', 2);
+
 include_once dirname(__FILE__) .'/flag.inc';
 
 /**
@@ -77,6 +79,14 @@ function flag_menu() {
     'file' => 'includes/flag.export.inc',
     'weight' => 3,
   );
+  $items['admin/build/flags/update/%'] = array(
+    'title' => 'Update',
+    'page callback' => 'flag_update_page',
+    'page arguments' => array(4),
+    'access arguments' => array('administer flags'),
+    'type' => MENU_CALLBACK,
+    'file' => 'includes/flag.export.inc',
+  );
   $items['flag'] = array(
     'title' => 'Flag',
     'page callback' => 'flag_page',
@@ -1291,11 +1301,19 @@ function flag_get_default_flags($include_disabled = FALSE) {
     foreach ($function() as $config) {
       $flag = flag_flag::factory_by_array($config);
       $flag->module = $module;
+
+      // Disable flags that are not at the current API version.
+      if (!isset($flag->api_version) || $flag->api_version < FLAG_API_VERSION) {
+        $flag->status = FALSE;
+        $flag->api_version = isset($flag->api_version) ? $flag->api_version : 1;
+      }
+
       // Add flags that have been enabled.
       if ((!isset($flag_status[$flag->name]) && (!isset($flag->status) || $flag->status)) || !empty($flag_status[$flag->name])) {
         $flag->status = TRUE;
         $default_flags[$flag->name] = $flag;
       }
+      // Add flags that have been disabled.
       elseif ($include_disabled) {
         $flag->status = FALSE;
         $default_flags[$flag->name] = $flag;
diff --git includes/flag.admin.inc includes/flag.admin.inc
index 7485a72..b814b96 100644
--- includes/flag.admin.inc
+++ includes/flag.admin.inc
@@ -52,11 +52,19 @@ function theme_flag_admin_page($flags, $default_flags) {
   $rows = array();
   foreach ($default_flags as $name => $flag) {
     if (!isset($flags[$name])) {
-      $ops = theme('links', array(
-        'flags_enable' =>  array('title' => t('enable'), 'href' => "admin/build/flags/edit/" . $flag->name),
-      ));
-
-      $roles = array_flip(array_intersect(array_flip(user_roles()), $flag->roles['flag']));
+      if ($flag->api_version < FLAG_API_VERSION) {
+        $flag_updates_needed = TRUE;
+        $ops = theme('links', array(
+          'flags_update' => array('title' => '<strong>' . t('needs update') . '</strong>', 'href' => 'admin/build/flags/update/' . $flag->name, 'html' => TRUE),
+        ));
+      }
+      else {
+        $ops = theme('links', array(
+          'flags_enable' => array('title' => t('enable'), 'href' => 'admin/build/flags/edit/' . $flag->name),
+        ));
+      }
+      // $flag->roles['flag'] not exist on older flags.
+      $roles = array_flip(array_intersect(array_flip(user_roles()), !empty($flag->roles['flag']) ? $flag->roles['flag'] : array()));
       $rows[] = array(
         $flag->name,
         $flag->module,
@@ -66,6 +74,10 @@ function theme_flag_admin_page($flags, $default_flags) {
     }
   }
 
+  if (isset($flag_updates_needed)) {
+    drupal_set_message(t('Some flags provided by modules need to be updated to a new format before they can be used with this version of Flag. See the disabled flags for a list of flags that need updating.'), 'warning');
+  }
+
   if (!empty($rows)) {
     $header = array(t('Disabled Flags'), t('Module'), t('Flag type'), t('Operations'));
     $output .= theme('table', $header, $rows);
diff --git includes/flag.export.inc includes/flag.export.inc
index fe2f7cf..33a752e 100644
--- includes/flag.export.inc
+++ includes/flag.export.inc
@@ -24,6 +24,8 @@ function flag_export_flags($flags = array(), $module = '') {
       // implementation.
       $flag = flag_get_flag($flag);
     }
+    // Make sure flag is updated to current version API.
+    flag_update_export($flag);
     $new_flag = (array) $flag;
 
     if (!empty($module)) {
@@ -136,11 +138,11 @@ function flag_import_form_submit($form, &$form_state) {
 /**
  * Export a flag and display it in a form.
  */
-function flag_export_form(&$form_state, $flag_name = NULL) {
+function flag_export_form(&$form_state, $flag = NULL) {
   $form = array();
 
   // Convert a flag name (if any) to the list of export flags.
-  if ($flag = flag_get_flag($flag_name)) {
+  if (is_object($flag) || ($flag = flag_get_flag($flag))) {
     $flags = array($flag);
   }
 
@@ -193,3 +195,46 @@ function flag_export_form(&$form_state, $flag_name = NULL) {
 function flag_export_form_submit($form, &$form_state) {
   $form_state['rebuild'] = TRUE;
 }
+
+/**
+ * Page for displaying an upgrade message and export form for Flag 1.x flags.
+ */
+function flag_update_page($flag_name) {
+  $flags = flag_get_default_flags(TRUE);
+  if (!isset($flags[$flag_name])) {
+    drupal_not_found();
+    return;
+  }
+
+  if ($flags[$flag_name]->api_version == FLAG_API_VERSION) {
+    drupal_set_message(t('The flag %name is already up-to-date with the latest Flag API and does not need upgrading.'));
+    drupal_goto('admin/build/flags');
+  }
+
+  $flag = $flags[$flag_name];
+  drupal_set_message(t('The flag %name is currently using the Flag API version @version, which is not compatible with the current version of Flag. You can upgrade this flag by pasting the below code into <em>@module_flag_default_flags()</em> function in the @module.module file.', array('%name' => $flag->name, '@version' => $flag->api_version, '@module' => $flag->module)), 'warning');
+
+  flag_update_export($flag);
+
+  return drupal_get_form('flag_export_form', $flag);
+}
+
+
+/**
+ * Update a flag before export.
+ *
+ * @param $flag
+ *   The flag object passed by reference.
+ */
+function flag_update_export(&$flag) {
+  // Update differences.
+  if (empty($flag->api_version) || $flag->api_version == 1) {
+    if (isset($flag->roles) && !isset($flag->roles['flag'])) {
+      $flag->roles = array(
+        'flag' => $flag->roles,
+        'unflag' => $flag->roles,
+      );
+    }
+    $flag->api_version = FLAG_API_VERSION;
+  }
+}
\ No newline at end of file