diff --git a/setup_env.py b/setup_env.py
new file mode 100644
index 0000000..eec4810
--- /dev/null
+++ b/setup_env.py
@@ -0,0 +1,109 @@
+#!/usr/bin/env python3
+"""Environment setup script for Dolibarr MCP development."""
+
+import os
+import subprocess
+import sys
+import platform
+import shutil
+
+def run_command(command, shell=False):
+    """Run a command and handle errors."""
+    try:
+        result = subprocess.run(command, shell=shell, check=True, capture_output=True, text=True)
+        command_str = ' '.join(command) if isinstance(command, list) else command
+        print(f"✓ {command_str}")
+        return True
+    except subprocess.CalledProcessError as e:
+        command_str = ' '.join(command) if isinstance(command, list) else command
+        print(f"✗ {command_str}")
+        if e.stderr:
+            print(f"  Error: {e.stderr}")
+        return False
+
+def setup_environment():
+    """Set up the development environment."""
+    print("\n" + "="*50)
+    print("Dolibarr MCP Development Environment Setup")
+    print("="*50 + "\n")
+    
+    # Determine platform-specific paths
+    if platform.system() == "Windows":
+        venv_name = "venv_dolibarr"
+        python_exe = os.path.join(venv_name, "Scripts", "python.exe")
+        pip_exe = os.path.join(venv_name, "Scripts", "pip.exe")
+        activate_script = os.path.join(venv_name, "Scripts", "activate.bat")
+    else:
+        venv_name = "venv_dolibarr"
+        python_exe = os.path.join(venv_name, "bin", "python")
+        pip_exe = os.path.join(venv_name, "bin", "pip")
+        activate_script = f"source {os.path.join(venv_name, 'bin', 'activate')}"
+    
+    # Create virtual environment
+    print("1. Creating virtual environment...")
+    if not run_command([sys.executable, "-m", "venv", venv_name]):
+        print("Failed to create virtual environment!")
+        return False
+    
+    # Ensure pip is installed
+    print("\n2. Ensuring pip is installed...")
+    run_command([python_exe, "-m", "ensurepip", "--upgrade"])
+    
+    # Upgrade pip
+    print("\n3. Upgrading pip, setuptools, and wheel...")
+    if not run_command([python_exe, "-m", "pip", "install", "--upgrade", "pip", "setuptools", "wheel"]):
+        print("Failed to upgrade pip!")
+        return False
+    
+    # Install requirements
+    print("\n4. Installing requirements...")
+    if os.path.exists("requirements.txt"):
+        if not run_command([pip_exe, "install", "-r", "requirements.txt"]):
+            print("Failed to install requirements!")
+            return False
+    
+    # Install package in editable mode
+    print("\n5. Installing dolibarr-mcp package...")
+    if not run_command([pip_exe, "install", "-e", "."]):
+        print("Failed to install package!")
+        return False
+    
+    # Create .env file if it doesn't exist
+    print("\n6. Setting up configuration...")
+    if not os.path.exists(".env"):
+        if os.path.exists(".env.example"):
+            shutil.copy(".env.example", ".env")
+            print("✓ Created .env from .env.example")
+        else:
+            with open(".env", "w") as f:
+                f.write("# Dolibarr MCP Configuration\n")
+                f.write("DOLIBARR_URL=https://your-dolibarr-instance.com/api/index.php\n")
+                f.write("DOLIBARR_API_KEY=your_api_key_here\n")
+                f.write("LOG_LEVEL=INFO\n")
+            print("✓ Created default .env file")
+        print("  ⚠ Please edit .env with your Dolibarr credentials")
+    else:
+        print("✓ .env file already exists")
+    
+    # Test import
+    print("\n7. Testing installation...")
+    test_command = [python_exe, "-c", "from dolibarr_mcp.config import Config; print('✓ Import test passed')"]
+    if run_command(test_command):
+        print("\n" + "="*50)
+        print("✓ Setup Complete!")
+        print("="*50)
+        print(f"\nVirtual environment: {os.path.abspath(venv_name)}")
+        print(f"\nTo activate the environment:")
+        print(f"  {activate_script}")
+        print(f"\nTo run the server:")
+        print(f"  python -m dolibarr_mcp")
+        return True
+    else:
+        print("\n✗ Installation test failed!")
+        return False
+
+if __name__ == "__main__":
+    if setup_environment():
+        sys.exit(0)
+    else:
+        sys.exit(1)