diff --git a/Changelog.md b/Changelog.md
index 52128cd2..a10cdf25 100644
--- a/Changelog.md
+++ b/Changelog.md
@@ -7,6 +7,7 @@
 - removed `GITLAB_PROJECTS_LIMIT` configuration option, can be set from gitlab ui
 - removed `GITLAB_GRAVATAR_ENABLED` configuration option, can be set from gitlab ui
 - gitlab-shell: upgrade to v.2.5.3
+- gitlab: upgrade to CE v.7.8.0
 
 **7.7.2**
 - gitlab-shell: upgrade to v.2.4.2
diff --git a/VERSION b/VERSION
index fca85800..09a6d308 100644
--- a/VERSION
+++ b/VERSION
@@ -1 +1 @@
-7.7.2
+7.8.0
diff --git a/assets/config/gitlabhq/gitlab.yml b/assets/config/gitlabhq/gitlab.yml
index 0e4d4435..1947d87f 100644
--- a/assets/config/gitlabhq/gitlab.yml
+++ b/assets/config/gitlabhq/gitlab.yml
@@ -44,10 +44,8 @@ production: &base
     # Email address used in the "From" field in mails sent by GitLab
     email_from: "{{GITLAB_EMAIL}}"
 
-    # Email server smtp settings are in [a separate file](initializers/smtp_settings.rb.sample).
+    # Email server smtp settings are in config/initializers/smtp_settings.rb.sample
 
-    ## User settings
-    default_projects_limit: 10
     default_can_create_group: {{GITLAB_CREATE_GROUP}} # default: true - User can create groups
     username_changing_enabled: {{GITLAB_USERNAME_CHANGE}} # default: true - User can change her username/namespace
     ## Default theme
@@ -58,16 +56,6 @@ production: &base
     ##   COLOR  = 5
     # default_theme: 2 # default: 2
 
-    ## Users can create accounts
-    # This also allows normal users to sign up for accounts themselves
-    # default: false - By default GitLab administrators must create all new accounts
-    # signup_enabled: true
-
-    ## Standard login settings
-    # The standard login can be disabled to force login via LDAP
-    # default: true - If set to false the standard login form won't be shown on the sign-in page
-    # signin_enabled: false
-
     # Restrict setting visibility levels for non-admin users.
     # The default is to allow all levels.
     restricted_visibility_levels: [ {{GITLAB_RESTRICTED_VISIBILITY}} ]
@@ -77,7 +65,7 @@ production: &base
     # This happens when the commit is pushed or merged into the default branch of a project.
     # When not specified the default issue_closing_pattern as specified below will be used.
     # Tip: you can test your closing pattern at http://rubular.com
-    # issue_closing_pattern: '([Cc]lose[sd]|[Ff]ixe[sd]) #(\d+)'
+    # issue_closing_pattern: '((?:[Cc]los(?:e[sd]|ing)|[Ff]ix(?:e[sd]|ing)?) +(?:(?:issues? +)?#\d+(?:(?:, *| +and +)?))+)'
 
     ## Default project features settings
     default_projects_features:
@@ -299,11 +287,6 @@ production: &base
     piwik_url: '{{PIWIK_URL}}'
     piwik_site_id: '{{PIWIK_SITE_ID}}'
 
-    ## Text under sign-in page (Markdown enabled)
-    # sign_in_text: |
-    #   ![Company Logo](http://www.companydomain.com/logo.png)
-    #   [Learn more about CompanyName](http://www.companydomain.com/)
-
   rack_attack:
     git_basic_auth:
       # Whitelist requests from 127.0.0.1 for web proxies (NGINX/Apache) with incorrect headers
diff --git a/assets/setup/install b/assets/setup/install
index 07b60ff5..01c3646c 100755
--- a/assets/setup/install
+++ b/assets/setup/install
@@ -1,7 +1,7 @@
 #!/bin/bash
 set -e
 
-GITLAB_VERSION=7.7.2
+GITLAB_VERSION=7.8.0
 GITLAB_SHELL_VERSION=2.5.3
 
 GITLAB_HOME="/home/git"