diff --git a/dev_setup.sh b/dev_setup.sh
index 443161d6f3..e32e3d7e17 100755
--- a/dev_setup.sh
+++ b/dev_setup.sh
@@ -54,8 +54,3 @@ fi
 
 # update location of Git hooks from default (.git/hooks) to the versioned folder .devtools/githooks
 git config core.hooksPath ".devtools/githooks"
-
-# install project requirements
-python -m pip install -r requirements/requirements-setup.txt
-python -m pip install -r requirements/requirements-test.txt
-python -m pip install -r requirements/requirements.txt
diff --git a/docs/community/devsetup.rst b/docs/community/devsetup.rst
index f83e646df5..294b8f1343 100644
--- a/docs/community/devsetup.rst
+++ b/docs/community/devsetup.rst
@@ -7,9 +7,13 @@ GluonTS requires Python 3.6 or higher to run. This setup guide assumes that the
 ``python`` command references a Python 3.6 version or higher. We recommend
 using pyenv_ for managing Python versions.
 
-Upon checking out this package, please run the following script::
+Upon checking out this package, please run the following::
 
     ./dev_setup.sh
+    pip install -e .[dev]
+
+    # if you use zsh you might need to escape `[` and `]`
+    pip install -e ".[dev]"
 
 This will install all required packages with pip and setup a Git hook that does
 automated type and style checks when you try to create a new Git commit.
@@ -22,12 +26,10 @@ with the ``--no-verify`` Git commit option.
 Build Instructions
 ------------------
 
-To build the project from source::
-
-    python setup.py build
-
 To run the project tests::
 
+    pytest
+    # or
     python setup.py tests
 
 To build the project documentation::
diff --git a/setup.py b/setup.py
index f357820792..602111c47c 100644
--- a/setup.py
+++ b/setup.py
@@ -177,6 +177,12 @@ def run(self):
             sys.exit(exit_code)
 
 
+tests_require = find_requirements("requirements-test.txt")
+shell_require = find_requirements("requirements-extras-shell.txt")
+setup_requires = find_requirements(
+    "requirements-setup.txt"
+) + find_requirements("requirements-docs.txt")
+
 setup_kwargs: dict = dict(
     name="gluonts",
     use_scm_version={"fallback_version": "0.0.0"},
@@ -195,18 +201,14 @@ def run(self):
     package_dir={"": "src"},
     packages=find_namespace_packages(include=["gluonts*"], where=str(SRC)),
     include_package_data=True,
-    setup_requires=list(
-        itertools.chain(
-            find_requirements("requirements-setup.txt"),
-            find_requirements("requirements-docs.txt"),
-        )
-    ),
+    setup_requires=setup_requires,
     install_requires=find_requirements("requirements.txt"),
-    tests_require=find_requirements("requirements-test.txt"),
+    tests_require=tests_require,
     extras_require={
+        "dev": tests_require + shell_require + setup_requires,
         "R": find_requirements("requirements-extras-r.txt"),
         "Prophet": find_requirements("requirements-extras-prophet.txt"),
-        "shell": find_requirements("requirements-extras-shell.txt"),
+        "shell": shell_require,
     },
     entry_points=dict(
         console_scripts=[