diff --git a/python/ray/air/examples/dreambooth/dataset.py b/python/ray/air/examples/dreambooth/dataset.py
index a20a1d8698a9..565e0b9d7ad8 100644
--- a/python/ray/air/examples/dreambooth/dataset.py
+++ b/python/ray/air/examples/dreambooth/dataset.py
@@ -19,7 +19,7 @@ def get_train_dataset(args, image_resolution=512):
     # prior preserving loss in one pass.
     dup_times = class_dataset.count() // instance_dataset.count()
     instance_dataset = instance_dataset.map_batches(
-        lambda df: pd.concat([df] * dup_times)
+        lambda df: pd.concat([df] * dup_times), batch_format="pandas"
     )
 
     # Load tokenizer for tokenizing the image prompts.
diff --git a/python/ray/air/examples/dreambooth/requirements.txt b/python/ray/air/examples/dreambooth/requirements.txt
index 4d031ccc7c4f..11348ecd8f72 100644
--- a/python/ray/air/examples/dreambooth/requirements.txt
+++ b/python/ray/air/examples/dreambooth/requirements.txt
@@ -1,8 +1,9 @@
-accelerate==0.15.0
-bitsandbytes
-diffusers==0.11.1
-flax==0.6.4
-huggingface_hub
-numpy==1.21
-torchvision
-transformers>=4.25.1
+accelerate==0.20.3
+bitsandbytes==0.39.1
+diffusers==0.17.1
+flax==0.6.11
+huggingface_hub==0.16.2
+numpy==1.24.4
+torch==2.0.1
+torchvision==0.15.2
+transformers==4.30.2
diff --git a/release/air_examples/dreambooth/dreambooth_env.yaml b/release/air_examples/dreambooth/dreambooth_env.yaml
index e11714bc99f7..b39a5d70c60c 100644
--- a/release/air_examples/dreambooth/dreambooth_env.yaml
+++ b/release/air_examples/dreambooth/dreambooth_env.yaml
@@ -1,4 +1,8 @@
-base_image: {{ env["RAY_IMAGE_ML_NIGHTLY_GPU"] | default("anyscale/ray-ml:nightly-py37-gpu") }}
+# NOTE:
+# - This test runs with py38 (see the entry in release_tests.yaml)
+# - This test installs dependencies on top of a base ray image
+#   instead of using the default ray-ml image. See dreambooth/requirements.txt.
+base_image: "anyscale/ray:nightly-py38-cu118"
 env_vars: {}
 debian_packages:
   - curl