diff --git a/R/show-news.R b/R/show-news.R
index 2349bec0b..03630ed68 100644
--- a/R/show-news.R
+++ b/R/show-news.R
@@ -7,15 +7,32 @@
 #' @export
 show_news <- function(pkg = ".", latest = TRUE, ...) {
   pkg <- as.package(pkg)
-  news_path <- path(pkg$path, "NEWS")
 
-  if (!file_exists(news_path)) {
+  news_path <- path_abs(c(
+    file.path(pkg$path, "inst", "NEWS.Rd"),
+    file.path(pkg$path, "NEWS.md"),
+    file.path(pkg$path, "NEWS"),
+    file.path(pkg$path, "inst", "NEWS")
+  ))
+  news_path <- news_path[file_exists(news_path)]
+
+  if (length(news_path) == 0) {
     cli::cli_abort("No NEWS found")
   }
 
+  news_db <- switch (path_ext(news_path),
+    Rd = ("tools" %:::% ".build_news_db_from_package_NEWS_Rd")(news_path),
+    md = ("tools" %:::% ".build_news_db_from_package_NEWS_md")(news_path),
+    ("tools" %:::% ".news_reader_default")(news_path)
+  )
+
+  if (is.null(news_db)) {
+    cli::cli_abort("Unable to parse NEWS")
+  }
+
   check_dots_used(action = getOption("devtools.ellipsis_action", rlang::warn))
 
-  out <- utils::news(..., db = ("tools" %:::% ".news_reader_default")(news_path))
+  out <- utils::news(..., db = news_db)
   if (latest) {
     ver <- numeric_version(out$Version)
     recent <- ver == max(ver)
diff --git a/tests/testthat/test-show-news.R b/tests/testthat/test-show-news.R
new file mode 100644
index 000000000..344502f1d
--- /dev/null
+++ b/tests/testthat/test-show-news.R
@@ -0,0 +1,63 @@
+test_that("can read NEWS.md in root directory", {
+  skip_on_cran()
+
+  pkg <- local_package_create()
+  write(
+    "# test 0.0.1\n\n* Initial CRAN submission.\n",
+    path(pkg, "NEWS.md")
+  )
+
+  expect_no_error(show_news(pkg))
+})
+
+test_that("can read NEWS.Rd in inst directory", {
+  skip_on_cran()
+
+  pkg <- local_package_create()
+
+  dir_create(pkg, "inst")
+  write(
+    "\\name{NEWS}
+\\title{News for Package 'test'}
+
+\\section{CHANGES IN test VERSION 0.0.1}{
+  \\itemize{
+    \\item First version
+  }
+}",
+    path(pkg, "inst", "NEWS.Rd")
+  )
+
+  expect_no_error(show_news(pkg))
+})
+
+test_that("can read NEWS in inst directory", {
+  skip_on_cran()
+
+  pkg <- local_package_create()
+
+  dir_create(pkg, "inst")
+  write("v0.1-1  (2024-01-09)\n\n  o first release", path(pkg, "inst", "NEWS"))
+
+  expect_no_error(show_news(pkg))
+})
+
+test_that("fails when NEWS is missing", {
+  skip_on_cran()
+
+  pkg <- local_package_create()
+
+  expect_error(show_news(pkg))
+})
+
+test_that("fails when NEWS is improperly formatted", {
+  skip_on_cran()
+
+  pkg <- local_package_create()
+  suppressMessages(usethis::with_project(pkg, use_news_md()))
+
+  dir_create(pkg, "inst")
+  file_create(pkg, "inst", "NEWS.Rd")
+
+  expect_error(show_news(pkg))
+})