diff --git a/CHANGELOG.md b/CHANGELOG.md
index 735ca975af..1ae57fbea3 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,3 +1,7 @@
+## 1.16.1 - 1 September 2021
+### Fixed
+* Node debugging does not work in VS Code 1.60.0 due to removal of `node2` debug type. [#3177](https://github.com/microsoft/vscode-docker/issues/3177)
+
 ## 1.16.0 - 16 August 2021
 ### Added
 * VSCode's [Workspace Trust](https://code.visualstudio.com/updates/v1_57#_workspace-trust) feature is now supported. [#2829](https://github.com/microsoft/vscode-docker/issues/2829)
diff --git a/package-lock.json b/package-lock.json
index 18f6441fe3..ab8071027f 100644
--- a/package-lock.json
+++ b/package-lock.json
@@ -1,11 +1,12 @@
 {
     "name": "vscode-docker",
-    "version": "1.16.0",
+    "version": "1.16.1",
     "lockfileVersion": 2,
     "requires": true,
     "packages": {
         "": {
-            "version": "1.16.0",
+            "name": "vscode-docker",
+            "version": "1.16.1",
             "license": "SEE LICENSE IN LICENSE.md",
             "dependencies": {
                 "@azure/arm-appservice": "^6.1.0",
@@ -5606,9 +5607,9 @@
             }
         },
         "node_modules/tar": {
-            "version": "6.1.2",
-            "resolved": "https://registry.npmjs.org/tar/-/tar-6.1.2.tgz",
-            "integrity": "sha512-EwKEgqJ7nJoS+s8QfLYVGMDmAsj+StbI2AM/RTHeUSsOw6Z8bwNBRv5z3CY0m7laC5qUAqruLX5AhMuc5deY3Q==",
+            "version": "6.1.11",
+            "resolved": "https://registry.npmjs.org/tar/-/tar-6.1.11.tgz",
+            "integrity": "sha512-an/KZQzQUkZCkuoAA64hM92X0Urb6VpRhAFllDzz44U2mcD5scmT3zBc4VgVpkugF580+DQn8eAFSyoQt0tznA==",
             "dependencies": {
                 "chownr": "^2.0.0",
                 "fs-minipass": "^2.0.0",
@@ -11471,9 +11472,9 @@
             "dev": true
         },
         "tar": {
-            "version": "6.1.2",
-            "resolved": "https://registry.npmjs.org/tar/-/tar-6.1.2.tgz",
-            "integrity": "sha512-EwKEgqJ7nJoS+s8QfLYVGMDmAsj+StbI2AM/RTHeUSsOw6Z8bwNBRv5z3CY0m7laC5qUAqruLX5AhMuc5deY3Q==",
+            "version": "6.1.11",
+            "resolved": "https://registry.npmjs.org/tar/-/tar-6.1.11.tgz",
+            "integrity": "sha512-an/KZQzQUkZCkuoAA64hM92X0Urb6VpRhAFllDzz44U2mcD5scmT3zBc4VgVpkugF580+DQn8eAFSyoQt0tznA==",
             "requires": {
                 "chownr": "^2.0.0",
                 "fs-minipass": "^2.0.0",
diff --git a/package.json b/package.json
index 2f44749f25..b5c2d92e7f 100644
--- a/package.json
+++ b/package.json
@@ -1,6 +1,6 @@
 {
     "name": "vscode-docker",
-    "version": "1.16.0",
+    "version": "1.16.1",
     "publisher": "ms-azuretools",
     "displayName": "Docker",
     "description": "Makes it easy to create, manage, and debug containerized applications.",
@@ -826,15 +826,8 @@
                                         }
                                     },
                                     "trace": {
-                                        "type": [
-                                            "boolean",
-                                            "string"
-                                        ],
-                                        "description": "%vscode-docker.debug.node.trace%",
-                                        "enum": [
-                                            "verbose",
-                                            true
-                                        ]
+                                        "type": "boolean",
+                                        "description": "%vscode-docker.debug.node.trace%"
                                     }
                                 }
                             },
diff --git a/src/debugging/node/NodeDebugHelper.ts b/src/debugging/node/NodeDebugHelper.ts
index b9330be08c..7829177d49 100644
--- a/src/debugging/node/NodeDebugHelper.ts
+++ b/src/debugging/node/NodeDebugHelper.ts
@@ -24,7 +24,7 @@ export interface NodeDebugOptions {
     sourceMaps?: boolean;
     stopOnEntry?: boolean;
     timeout?: number;
-    trace?: boolean | 'verbose';
+    trace?: boolean;
 }
 
 export interface NodeDockerDebugOptions extends NodeDebugOptions {
@@ -89,7 +89,7 @@ export class NodeDebugHelper implements DebugHelper {
             ...options,
             dockerOptions,
             request: 'attach',
-            type: 'node2'
+            type: 'pwa-node'
         };
 
         if (resolvedConfiguration.localRoot === undefined) {