diff --git a/Makefile b/Makefile
index bece7d1b..300be418 100644
--- a/Makefile
+++ b/Makefile
@@ -1,5 +1,5 @@
 install:
-	pip install -e ".[dev]" --config-settings editable_mode=compat
+	pip install -e ".[dev]"
 	bash .github/setup_env.sh
 
 debug:
@@ -31,6 +31,6 @@ deploy:
 changelog:
 	build-changelog changelog.yaml --output changelog.yaml --update-last-date --start-from 0.1.0 --append-file changelog_entry.yaml
 	build-changelog changelog.yaml --org PolicyEngine --repo policyengine-api --output CHANGELOG.md --template .github/changelog_template.md
-	bump-version changelog.yaml setup.py policyengine_api/constants.py
+	bump-version changelog.yaml pyproject.toml policyengine_api/constants.py
 	rm changelog_entry.yaml || true
 	touch changelog_entry.yaml 
\ No newline at end of file
diff --git a/changelog_entry.yaml b/changelog_entry.yaml
index e69de29b..0c4e4fb3 100644
--- a/changelog_entry.yaml
+++ b/changelog_entry.yaml
@@ -0,0 +1,4 @@
+- bump: minor
+  changes:
+    changed:
+    - Migrated from setup.py to pyproject.toml with hatchling build backend
diff --git a/pyproject.toml b/pyproject.toml
new file mode 100644
index 00000000..5551b70f
--- /dev/null
+++ b/pyproject.toml
@@ -0,0 +1,67 @@
+[build-system]
+requires = ["hatchling"]
+build-backend = "hatchling.build"
+
+[project]
+name = "policyengine-api"
+version = "3.37.0"
+description = "PolicyEngine API"
+readme = "README.md"
+license = "AGPL-3.0-only"
+authors = [
+    { name = "PolicyEngine", email = "hello@policyengine.org" },
+]
+requires-python = ">=3.11"
+classifiers = [
+    "Programming Language :: Python :: 3",
+    "Programming Language :: Python :: 3.11",
+    "Programming Language :: Python :: 3.12",
+    "Programming Language :: Python :: 3.13",
+    "Programming Language :: Python :: 3.14",
+    "License :: OSI Approved :: GNU Affero General Public License v3",
+]
+dependencies = [
+    "anthropic",
+    "assertpy",
+    "click>=8,<9",
+    "cloud-sql-python-connector",
+    "faiss-cpu",
+    "flask>=3,<4",
+    "flask-cors>=5,<6",
+    "Flask-Caching>=2,<3",
+    "google-cloud-logging>=3,<4",
+    "gunicorn",
+    "httpx>=0.27.0",
+    "markupsafe>=3,<4",
+    "microdf_python>=1.0.0",
+    "openai",
+    "policyengine_canada==0.96.3",
+    "policyengine-ng==0.5.1",
+    "policyengine-il==0.1.0",
+    "policyengine_uk==2.39.0",
+    "policyengine_us==1.590.2",
+    "policyengine_core>=3.16.6",
+    "policyengine>=0.7.0",
+    "pydantic",
+    "pymysql",
+    "python-dotenv",
+    "redis",
+    "rq",
+    "sqlalchemy>=2,<3",
+    "streamlit",
+    "werkzeug",
+]
+
+[project.optional-dependencies]
+dev = [
+    "pytest-timeout",
+    "coverage",
+    "pytest-snapshot",
+    "ruff>=0.9.0",
+]
+
+[project.scripts]
+policyengine-api-setup = "policyengine_api.setup_data:setup_data"
+
+[tool.hatch.build.targets.wheel]
+packages = ["policyengine_api"]
diff --git a/setup.py b/setup.py
deleted file mode 100644
index 031b17ec..00000000
--- a/setup.py
+++ /dev/null
@@ -1,61 +0,0 @@
-from setuptools import setup, find_packages
-from policyengine_api.constants import __version__
-
-setup(
-    name="policyengine-api",
-    version=__version__,
-    author="PolicyEngine",
-    author_email="hello@policyengine.org",
-    description="PolicyEngine API",
-    packages=find_packages(),
-    python_requires=">=3.11",
-    classifiers=[
-        "Programming Language :: Python :: 3",
-        "Programming Language :: Python :: 3.11",
-        "Programming Language :: Python :: 3.12",
-        "Programming Language :: Python :: 3.13",
-        "Programming Language :: Python :: 3.14",
-        "License :: OSI Approved :: GNU Affero General Public License v3",
-    ],
-    install_requires=[
-        "anthropic",
-        "assertpy",
-        "click>=8,<9",
-        "cloud-sql-python-connector",
-        "faiss-cpu",
-        "flask>=3,<4",
-        "flask-cors>=5,<6",
-        "google-cloud-logging",
-        "gunicorn",
-        "httpx>=0.27.0",
-        "markupsafe>=3,<4",
-        "openai",
-        "policyengine_canada==0.96.3",
-        "policyengine-ng==0.5.1",
-        "policyengine-il==0.1.0",
-        "policyengine_uk==2.39.0",
-        "policyengine_us==1.590.2",
-        "policyengine_core>=3.16.6",
-        "policyengine>=0.7.0",
-        "pydantic",
-        "pymysql",
-        "python-dotenv",
-        "redis",
-        "rq",
-        "sqlalchemy>=2,<3",
-        "streamlit",
-        "werkzeug",
-        "Flask-Caching>=2,<3",
-        "google-cloud-logging>=3,<4",
-        "microdf_python>=1.0.0",
-    ],
-    extras_require={
-        "dev": ["pytest-timeout", "coverage", "pytest-snapshot", "ruff>=0.9.0"],
-    },
-    # script policyengine-api-setup -> policyengine_api.setup_data:setup_data
-    entry_points={
-        "console_scripts": [
-            "policyengine-api-setup=policyengine_api.setup_data:setup_data",
-        ],
-    },
-)