diff --git a/src/components/Form.tsx b/src/components/Form.tsx
index 2520b3f51..5ba9b78d6 100644
--- a/src/components/Form.tsx
+++ b/src/components/Form.tsx
@@ -24,7 +24,7 @@ export type FormOptions = FormClass['options'] & {
 export type FormType = PartialExcept<CoreFormType, 'components'>;
 export type FormSource = string | FormType;
 interface FormConstructor {
-	new (
+	new(
 		element: HTMLElement,
 		formSource: FormSource,
 		options: FormOptions,
@@ -136,12 +136,20 @@ const onAnyEvent = (
 					handlers.onCancelComponent(outputArgs[0]);
 				break;
 			case 'onChange':
-				if (handlers.onChange)
+				if (handlers.onChange) {
+					let modified = outputArgs[2];
+					const flags = outputArgs[1];
+					// Fixed: Check if the change is from a file component and ensure modified is true
+					// See https://github.com/formio/react/issues/632
+					if (!modified && flags?.changed?.instance?.type === 'file') {
+						modified = true;
+					}
 					handlers.onChange(
 						outputArgs[0],
 						outputArgs[1],
-						outputArgs[2],
+						modified,
 					);
+				}
 				break;
 			case 'onCustomEvent':
 				if (handlers.onCustomEvent)
diff --git a/src/components/__tests__/FormFileChange.test.tsx b/src/components/__tests__/FormFileChange.test.tsx
new file mode 100644
index 000000000..4714d5996
--- /dev/null
+++ b/src/components/__tests__/FormFileChange.test.tsx
@@ -0,0 +1,49 @@
+
+import { render, screen, waitFor } from '@testing-library/react';
+import '@testing-library/jest-dom';
+import { Form } from '../Form';
+
+const fileForm = {
+    display: 'form' as const,
+    components: [
+        {
+            label: 'Upload File',
+            key: 'file',
+            type: 'file',
+            input: true,
+            storage: 'base64',
+        },
+    ],
+};
+
+test('onChange should report modified=true when file is changed', async () => {
+    const handleChange = jest.fn((value, flags, modified) => {
+        // console.log('onChange called', { value, flags, modified });
+    });
+
+    let formInstance: any;
+    render(<Form src={fileForm} onChange={handleChange} onFormReady={(instance) => formInstance = instance} />);
+
+    await waitFor(() => {
+        expect(screen.getByText('Upload File')).toBeInTheDocument();
+        expect(formInstance).toBeDefined();
+    });
+
+    const fileComponent = formInstance.getComponent('file');
+    const fileValue = [{
+        name: 'test.png',
+        size: 100,
+        type: 'image/png',
+        data: 'data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAAEAAAABCAYAAAAfFcSJAAAADUlEQVR42mNk+M9QDwADhgGAWjR9awAAAABJRU5ErkJggg=='
+    }];
+
+    // Trigger change. Currently reproduces modified=false.
+    fileComponent.setValue(fileValue);
+
+    await waitFor(() => expect(handleChange).toHaveBeenCalledTimes(1));
+    const args = handleChange.mock.calls[0];
+    console.log('File Change Args:', { modified: args[2] });
+
+    // This should PASS after the fix
+    expect(args[2]).toBe(true);
+}, 10000);