diff --git a/setup.py b/setup.py
index dd1c2bcee4ab..d1967446ec76 100644
--- a/setup.py
+++ b/setup.py
@@ -11,13 +11,41 @@
 import copy
 import sys
 import runpy
+import subprocess
+
+# Use tomllib for Python 3.11+, fallback to tomli for older versions
+try:
+    import tomllib as toml
+except ImportError:
+    import tomli as toml
 
 root_folder = os.path.abspath(os.path.dirname(__file__))
 
-# pull in any packages that exist in the root directory
+# Helper function to check if pyproject.toml has [project] section
+def has_project_section(pyproject_path):
+    """Check if a pyproject.toml file has a [project] section."""
+    try:
+        with open(pyproject_path, 'rb') as f:
+            pyproject_data = toml.load(f)
+            return 'project' in pyproject_data
+    except Exception:
+        return False
+
+# Discover packages with setup.py
 packages = {('.', os.path.dirname(p)) for p in glob.glob('azure*/setup.py')}
-# Handle the SDK folder as well
 packages.update({tuple(os.path.dirname(f).rsplit(os.sep, 1)) for f in glob.glob('sdk/*/azure*/setup.py')})
+
+# Discover packages with pyproject.toml that have [project] section
+for pyproject_file in glob.glob('azure*/pyproject.toml'):
+    pyproject_path = os.path.join(root_folder, pyproject_file)
+    if has_project_section(pyproject_path):
+        packages.add(('.', os.path.dirname(pyproject_file)))
+
+for pyproject_file in glob.glob('sdk/*/azure*/pyproject.toml'):
+    pyproject_path = os.path.join(root_folder, pyproject_file)
+    if has_project_section(pyproject_path):
+        packages.add(tuple(os.path.dirname(pyproject_file).rsplit(os.sep, 1)))
+
 # [(base_folder, package_name), ...] to {package_name: base_folder, ...}
 packages = {package_name: base_folder for (base_folder, package_name) in packages}
 
@@ -32,8 +60,9 @@
 content_package = sorted([p for p in packages.keys() if p not in meta_package+nspkg_packages])
 
 # Move azure-common at the beginning, it's important this goes first
-content_package.remove("azure-common")
-content_package.insert(0, "azure-common")
+if "azure-common" in content_package:
+    content_package.remove("azure-common")
+    content_package.insert(0, "azure-common")
 
 # Package final:
 if "install" in sys.argv:
@@ -44,6 +73,7 @@
 for pkg_name in packages_for_installation:
     pkg_setup_folder = os.path.join(root_folder, packages[pkg_name], pkg_name)
     pkg_setup_path = os.path.join(pkg_setup_folder, 'setup.py')
+    pkg_pyproject_path = os.path.join(pkg_setup_folder, 'pyproject.toml')
 
     try:
         saved_dir = os.getcwd()
@@ -52,8 +82,33 @@
         os.chdir(pkg_setup_folder)
         sys.path = [pkg_setup_folder] + copy.copy(saved_syspath)
 
-        print("Start ", pkg_setup_path)
-        result = runpy.run_path(pkg_setup_path)
+        # Determine which file to use: pyproject.toml with [project] or setup.py
+        # Since we already filtered during discovery, if pyproject.toml exists it has [project]
+        use_pyproject = os.path.exists(pkg_pyproject_path) and has_project_section(pkg_pyproject_path)
+        
+        if use_pyproject:
+            # Use pip to install pyproject.toml-based packages
+            # Map setup.py commands to pip commands
+            if "install" in sys.argv:
+                print("Start ", pkg_pyproject_path)
+                cmd = [sys.executable, '-m', 'pip', 'install', '.']
+            elif "develop" in sys.argv or any(arg in sys.argv for arg in ['-e', '--editable']):
+                print("Start ", pkg_pyproject_path)
+                cmd = [sys.executable, '-m', 'pip', 'install', '-e', '.']
+            else:
+                # For other commands like --version, --help, etc., skip pyproject.toml packages
+                # These commands are meant for the root setup.py, not individual packages
+                continue
+            
+            result = subprocess.run(cmd, cwd=pkg_setup_folder, capture_output=False)
+            if result.returncode != 0:
+                print(f"Warning: Package {pkg_name} installation returned non-zero exit code", file=sys.stderr)
+        elif os.path.exists(pkg_setup_path):
+            # Use the traditional setup.py approach
+            print("Start ", pkg_setup_path)
+            result = runpy.run_path(pkg_setup_path)
+        else:
+            print(f"Warning: No setup.py or pyproject.toml found for {pkg_name}", file=sys.stderr)
     except Exception as e:
         print(e, file=sys.stderr)
     finally: