diff --git a/CHANGES.md b/CHANGES.md
index 438b28a..9ec8be5 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -4,7 +4,10 @@
 * Reformatted code and fixed linter issues.
 * Added `environment.yml` to setup a conda/mamba development environment. 
 * Updated copyright notice.
-
+* Changed the development dependency from `h5netcdf` to `h5netcdf[h5py]`
+  to ensure the HDF5 backend required by NetCDF tests is installed and
+  constrained `xarray` to `<2026.4` to retain compatibility with
+  the Zarr 2. (#110)
 
 ## Version 0.8.0 (from 2024-10-04)
 
diff --git a/environment.yml b/environment.yml
index cd67684..c37f86e 100644
--- a/environment.yml
+++ b/environment.yml
@@ -11,7 +11,7 @@ dependencies:
   - numcodecs
   - numpy
   - pyyaml
-  - xarray
+  - xarray <2026.4 # constrain to <2026.4 to retain compatibility with zarr 2.
   - zarr >=2.18,<3
   # Dev Dependencies
   - isort
diff --git a/pyproject.toml b/pyproject.toml
index 5b69b4e..0c07c97 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -27,7 +27,7 @@ dependencies = [
   "numcodecs",
   "numpy",
   "pyyaml",
-  "xarray",
+  "xarray <2026.4", # constrain to <2026.4 to retain compatibility with zarr 2.
   "zarr >=2,<3"
 ]
 
@@ -50,7 +50,7 @@ dev = [
   "isort",
   "pytest",
   "pytest-cov",
-  "h5netcdf",
+  "h5netcdf[h5py]",
   "s3fs",
   "scipy",
   "pyproj",
diff --git a/tests/test_xrencoding.py b/tests/test_xrencoding.py
index 257560c..b2fc7c0 100644
--- a/tests/test_xrencoding.py
+++ b/tests/test_xrencoding.py
@@ -132,7 +132,7 @@ def test_overlapping_chunks_in_data_and_encoding_raises(self):
         self.ds.v.encoding.update(chunks=(20,))
         with pytest.raises(
             (NotImplementedError, ValueError),
-            match="Specified zarr chunks"
+            match="Specified [Zz]arr chunks"
             " encoding\\['chunks'\\]=\\(20,\\)"
             " for variable named 'v'",
         ):