diff --git a/apps/isaaclab.python.kit b/apps/isaaclab.python.kit
index 04c996aa98f..de4252f2995 100644
--- a/apps/isaaclab.python.kit
+++ b/apps/isaaclab.python.kit
@@ -38,7 +38,7 @@ keywords = ["experience", "app", "usd"]
 
 # Isaac Sim Extra
 "isaacsim.asset.importer.mjcf" = {}
-"isaacsim.asset.importer.urdf" = {}
+"isaacsim.asset.importer.urdf" = {version = "2.4.31", exact = true}
 "omni.physx.bundle" = {}
 "omni.physx.tensors" = {}
 "omni.replicator.core" = {}
diff --git a/source/isaaclab/config/extension.toml b/source/isaaclab/config/extension.toml
index 6e5d5765788..623798e931e 100644
--- a/source/isaaclab/config/extension.toml
+++ b/source/isaaclab/config/extension.toml
@@ -1,7 +1,7 @@
 [package]
 
 # Note: Semantic Versioning is used: https://semver.org/
-version = "0.48.9"
+version = "0.49.0"
 
 # Description
 title = "Isaac Lab framework for Robot Learning"
diff --git a/source/isaaclab/docs/CHANGELOG.rst b/source/isaaclab/docs/CHANGELOG.rst
index cdb5e3092bd..ef1f2755aa6 100644
--- a/source/isaaclab/docs/CHANGELOG.rst
+++ b/source/isaaclab/docs/CHANGELOG.rst
@@ -1,6 +1,14 @@
 Changelog
 ---------
 
+0.49.0 (2025-11-10)
+~~~~~~~~~~~~~~~~~~~
+
+Fixed
+^^^^^
+
+* Updated the URDF Importer version to 2.4.31 to avoid issues with merging joints on the latest URDF importer in Isaac Sim 5.1
+
 
 0.48.9 (2025-11-21)
 ~~~~~~~~~~~~~~~~~~~
diff --git a/source/isaaclab/isaaclab/sim/converters/urdf_converter.py b/source/isaaclab/isaaclab/sim/converters/urdf_converter.py
index 82cf55d5405..c212a175b0c 100644
--- a/source/isaaclab/isaaclab/sim/converters/urdf_converter.py
+++ b/source/isaaclab/isaaclab/sim/converters/urdf_converter.py
@@ -47,8 +47,8 @@ def __init__(self, cfg: UrdfConverterCfg):
             cfg: The configuration instance for URDF to USD conversion.
         """
         manager = omni.kit.app.get_app().get_extension_manager()
-        if not manager.is_extension_enabled("isaacsim.asset.importer.urdf"):
-            enable_extension("isaacsim.asset.importer.urdf")
+        if not manager.is_extension_enabled("isaacsim.asset.importer.urdf-2.4.31"):
+            enable_extension("isaacsim.asset.importer.urdf-2.4.31")
         from isaacsim.asset.importer.urdf._urdf import acquire_urdf_interface
 
         self._urdf_interface = acquire_urdf_interface()
@@ -121,6 +121,7 @@ def _get_urdf_import_config(self) -> isaacsim.asset.importer.urdf.ImportConfig:
         import_config.set_collision_from_visuals(self.cfg.collision_from_visuals)
         # consolidating links that are connected by fixed joints
         import_config.set_merge_fixed_joints(self.cfg.merge_fixed_joints)
+        import_config.set_merge_fixed_ignore_inertia(self.cfg.merge_fixed_joints)
         # -- physics settings
         # create fix joint for base link
         import_config.set_fix_base(self.cfg.fix_base)
diff --git a/source/isaaclab/test/sim/test_spawn_from_files.py b/source/isaaclab/test/sim/test_spawn_from_files.py
index 5da16d81f5e..ffdfb36ac4b 100644
--- a/source/isaaclab/test/sim/test_spawn_from_files.py
+++ b/source/isaaclab/test/sim/test_spawn_from_files.py
@@ -69,8 +69,8 @@ def test_spawn_usd_fails(sim):
 def test_spawn_urdf(sim):
     """Test loading prim from URDF file."""
     # retrieve path to urdf importer extension
-    enable_extension("isaacsim.asset.importer.urdf")
-    extension_path = get_extension_path_from_name("isaacsim.asset.importer.urdf")
+    enable_extension("isaacsim.asset.importer.urdf-2.4.31")
+    extension_path = get_extension_path_from_name("isaacsim.asset.importer.urdf-2.4.31")
     # Spawn franka from URDF
     cfg = sim_utils.UrdfFileCfg(
         asset_path=f"{extension_path}/data/urdf/robots/franka_description/robots/panda_arm_hand.urdf",
diff --git a/source/isaaclab/test/sim/test_urdf_converter.py b/source/isaaclab/test/sim/test_urdf_converter.py
index 15ba6d66b3c..54995c253f8 100644
--- a/source/isaaclab/test/sim/test_urdf_converter.py
+++ b/source/isaaclab/test/sim/test_urdf_converter.py
@@ -31,8 +31,8 @@ def sim_config():
     # Create a new stage
     stage_utils.create_new_stage()
     # retrieve path to urdf importer extension
-    enable_extension("isaacsim.asset.importer.urdf")
-    extension_path = get_extension_path_from_name("isaacsim.asset.importer.urdf")
+    enable_extension("isaacsim.asset.importer.urdf-2.4.31")
+    extension_path = get_extension_path_from_name("isaacsim.asset.importer.urdf-2.4.31")
     # default configuration
     config = UrdfConverterCfg(
         asset_path=f"{extension_path}/data/urdf/robots/franka_description/robots/panda_arm_hand.urdf",