diff --git a/dev/checks.nix b/dev/checks.nix
index 7463f93..2f57ff5 100644
--- a/dev/checks.nix
+++ b/dev/checks.nix
@@ -83,7 +83,41 @@ let
     let
       mkCheck = mkCheck' sourcePreference;
     in
-    mapAttrs' (name: v: nameValuePair "${name}-pref-${sourcePreference}" v) {
+    {
+      editable-workspace =
+        let
+          workspaceRoot = ../lib/fixtures/workspace;
+          ws = uv2nix.workspace.loadWorkspace { inherit workspaceRoot; };
+          overlay = ws.mkOverlay {
+            sourcePreference = "wheel"; # We're testing editable support, wheels are fine.
+          };
+          editableOverlay = ws.mkEditableOverlay {
+            root = "$NIX_BUILD_TOP";
+          };
+
+          python = pkgs.python312.override {
+            self = python;
+            packageOverrides = lib.composeExtensions overlay editableOverlay;
+          };
+
+          pythonEnv = python.withPackages (ps: [ ps.workspace ]);
+
+        in
+        pkgs.runCommand "editable-workspace-test"
+          {
+            nativeBuildInputs = [ pythonEnv ];
+          }
+          ''
+            cp -r ${workspaceRoot}/* .
+            chmod +w .*
+            test "$(python -c 'import workspace_package; print(workspace_package.hello())')" = "Hello from workspace-package!"
+            substituteInPlace ./packages/workspace-package/src/workspace_package/__init__.py --replace-fail workspace-package mutable-package
+            test "$(python -c 'import workspace_package; print(workspace_package.hello())')" = "Hello from mutable-package!"
+            touch $out
+          '';
+
+    }
+    // mapAttrs' (name: v: nameValuePair "${name}-pref-${sourcePreference}" v) {
       trivial = mkCheck {
         root = ../lib/fixtures/trivial;
         packages = ps: [ ps."trivial" ];
diff --git a/flake.lock b/flake.lock
index 8be6b36..a3a891c 100644
--- a/flake.lock
+++ b/flake.lock
@@ -121,16 +121,16 @@
     },
     "nixpkgs": {
       "locked": {
-        "lastModified": 1725103162,
-        "narHash": "sha256-Ym04C5+qovuQDYL/rKWSR+WESseQBbNAe5DsXNx5trY=",
-        "owner": "nixos",
+        "lastModified": 1725401364,
+        "narHash": "sha256-J5jaUCMWdJjtu7v6k1EalUFQuDvAu0/HJ5/o1mAxuk8=",
+        "owner": "adisbladis",
         "repo": "nixpkgs",
-        "rev": "12228ff1752d7b7624a54e9c1af4b222b3c1073b",
+        "rev": "41611f8ee5c040cc4f0910669075340507f0b6ed",
         "type": "github"
       },
       "original": {
-        "owner": "nixos",
-        "ref": "nixos-unstable",
+        "owner": "adisbladis",
+        "ref": "python-editable",
         "repo": "nixpkgs",
         "type": "github"
       }
@@ -151,15 +151,16 @@
         ]
       },
       "locked": {
-        "lastModified": 1725356581,
-        "narHash": "sha256-mCYjrOn8Mv0HgIY9tQx+NZA8xK2TQic76VNpSo8EPrY=",
-        "owner": "adisbladis",
+        "lastModified": 1725410671,
+        "narHash": "sha256-s4t5ZR/YgzXA/TNv8qayM7Hez9ASStEeii5ySyZ+uyw=",
+        "owner": "nix-community",
         "repo": "pyproject.nix",
-        "rev": "424e96048451c58c36471c9b78860ed1c4d539dd",
+        "rev": "f70611faf95f683e50da2ce4ac1257f9256a3d5f",
         "type": "github"
       },
       "original": {
-        "owner": "adisbladis",
+        "owner": "nix-community",
+        "ref": "editable",
         "repo": "pyproject.nix",
         "type": "github"
       }
diff --git a/flake.nix b/flake.nix
index c9a0190..ca42283 100644
--- a/flake.nix
+++ b/flake.nix
@@ -2,7 +2,7 @@
   description = "Uv2nix";
 
   inputs = {
-    nixpkgs.url = "github:nixos/nixpkgs/nixos-unstable";
+    nixpkgs.url = "github:adisbladis/nixpkgs/python-editable";
 
     flake-parts.url = "github:hercules-ci/flake-parts";
     flake-parts.inputs.nixpkgs-lib.follows = "nixpkgs";
@@ -16,7 +16,7 @@
     nixdoc.url = "github:nix-community/nixdoc";
     nixdoc.inputs.nixpkgs.follows = "nixpkgs";
 
-    pyproject-nix.url = "github:adisbladis/pyproject.nix";
+    pyproject-nix.url = "github:nix-community/pyproject.nix/editable";
     pyproject-nix.inputs.nixpkgs.follows = "nixpkgs";
     pyproject-nix.inputs.nix-github-actions.follows = "nix-github-actions";
     pyproject-nix.inputs.mdbook-nixdoc.follows = "mdbook-nixdoc";
diff --git a/lib/fixtures/workspace/uv.lock b/lib/fixtures/workspace/uv.lock
index 8bc57bb..4f01609 100644
--- a/lib/fixtures/workspace/uv.lock
+++ b/lib/fixtures/workspace/uv.lock
@@ -1,9 +1,6 @@
 version = 1
 requires-python = ">=3.12"
 
-[options]
-exclude-newer = "2024-08-21T10:06:00Z"
-
 [manifest]
 members = [
     "workspace",
diff --git a/lib/lock1.nix b/lib/lock1.nix
index a95b8f2..e398320 100644
--- a/lib/lock1.nix
+++ b/lib/lock1.nix
@@ -35,6 +35,7 @@ let
     hasPrefix
     intersectLists
     assertMsg
+    isString
     ;
 
 in
@@ -258,20 +259,17 @@ fix (self: {
       # List of parsed wheels
       wheelFiles = map (whl: whl.file') package.wheels;
 
+      # Local projects
+      localPath =
+        "/"
+        + source.editable or source.directory or source.virtual
+          or (throw "Not a project path: ${toJSON source}");
       localProject =
         if projects ? package.name then
           projects.${package.name}
         else
           pyproject-nix.lib.project.loadUVPyproject {
-            projectRoot =
-              if isProject then
-                workspaceRoot + "/${source.editable}"
-              else if isDirectory then
-                workspaceRoot + "/${source.directory}"
-              else if isVirtual then
-                workspaceRoot + "/${source.virtual}"
-              else
-                throw "Not a project path: ${toJSON source}";
+            projectRoot = workspaceRoot + localPath;
           };
 
     in
@@ -286,7 +284,11 @@ fix (self: {
       stdenv,
       autoPatchelfHook,
       pythonManylinuxPackages,
+      mkPythonEditablePackage,
+      # Source preference (sdist or wheel)
       sourcePreference ? wsargs.sourcePreference,
+      # Editable root as a string
+      editableRoot ? null,
     }:
     let
       preferWheel =
@@ -354,7 +356,23 @@ fix (self: {
     assert assertMsg (format == "wheel" -> !elem package.name no-binary-package)
       "Package source for '${package.name}' was derived as wheel, but was present in tool.uv.no-binary-package";
     if (isProject || isDirectory || isVirtual) then
-      buildPythonPackage (localProject.renderers.buildPythonPackage { inherit python environ; })
+      # Package is not editable, render buildPythonPackage
+      if editableRoot == null then
+        buildPythonPackage (localProject.renderers.buildPythonPackage { inherit python environ; })
+      # Package is editable, render mkPythonEditablePackage
+      else
+        assert isString editableRoot;
+        mkPythonEditablePackage (
+          localProject.renderers.mkPythonEditablePackage {
+            inherit python environ;
+            # Prefer src style layout if available, otherwise use project root as editable root.
+            root =
+              if lib.pathExists (workspaceRoot + localPath + "/src") then
+                editableRoot + localPath + "/src"
+              else
+                editableRoot + localPath;
+          }
+        )
     else
       buildPythonPackage (
         {
diff --git a/lib/workspace.nix b/lib/workspace.nix
index c37b7df..cef8e67 100644
--- a/lib/workspace.nix
+++ b/lib/workspace.nix
@@ -31,6 +31,7 @@ let
     isAttrs
     attrValues
     assertMsg
+    nameValuePair
     ;
   inherit (builtins) readDir;
   inherit (pyproject-nix.lib.project) loadUVPyproject; # Note: Maybe we want a loader that will just "remap-all-the-things" into standard attributes?
@@ -178,6 +179,28 @@ fix (self: {
         assert all (spec: pep440.comparators.${spec.op} pythonVersion spec.version) uvLock.requires-python;
         mapAttrs (_: pkg: callPackage (mkPackage pkg) { }) resolved;
 
+      mkEditableOverlay =
+        let
+          isLocalPackage = _package: false;
+          workspaceProjects' = attrNames workspaceProjects;
+          localProjects = map (package: package.name) (filter isLocalPackage uvLock.package);
+          allLocal = unique (workspaceProjects' ++ localProjects);
+        in
+        {
+          # Editable root as a string.
+          root ? (toString workspaceRoot),
+          # Workspace members to make editable as a list of strings. Defaults to all local projects.
+          members ? allLocal,
+        }:
+        _final: prev:
+        let
+          # Filter any local packages that might be deactivated by markers or other filtration mechanisms.
+          activeMembers = filter (name: !prev ? name) members;
+        in
+        lib.listToAttrs (
+          map (name: nameValuePair name (prev.${name}.override { editableRoot = root; })) activeMembers
+        );
+
       inherit topLevelDependencies;
     };
 
diff --git a/templates/app/flake.nix b/templates/app/flake.nix
index e714a9e..14d80f9 100644
--- a/templates/app/flake.nix
+++ b/templates/app/flake.nix
@@ -20,7 +20,6 @@
       overlay =
         let
           # Create overlay from workspace.
-
           overlay' = workspace.mkOverlay {
             # Prefer prebuilt binary wheels as a package source.
             # Sdists are less likely to "just work" because of the metadata missing from uv.lock.