diff --git a/.pre-commit-config.yaml b/.pre-commit-config.yaml
index 518e6ec747..df6e47c5c0 100644
--- a/.pre-commit-config.yaml
+++ b/.pre-commit-config.yaml
@@ -45,3 +45,6 @@ repos:
   - id: mypy
     exclude: tests/.*|demisto_sdk/commands/init/templates/.*
     language: system
+- repo: local
+  hooks:
+    - id: generate-docs
diff --git a/.pre-commit-hooks.yaml b/.pre-commit-hooks.yaml
index 8c0385ed29..2bdbba1961 100644
--- a/.pre-commit-hooks.yaml
+++ b/.pre-commit-hooks.yaml
@@ -96,3 +96,10 @@
   entry: prevent-mypy-global-ignore
   language: python
   files: .*Packs/.*/(?:Integrations|Scripts)/.*.py$
+
+- id: generate-docs
+  name: Generate Documentation for Changed Commands
+  description: Generates documentation for commands when a _setup.py file is modified.
+  entry: python pre_commit_generate_docs.py
+  language: python
+  files: ^.*_setup\.py$
diff --git a/demisto_sdk/scripts/generate_commands_docs/__init__.py b/demisto_sdk/scripts/generate_commands_docs/__init__.py
new file mode 100644
index 0000000000..e69de29bb2
diff --git a/demisto_sdk/scripts/generate_commands_docs/generate_commands_docs.py b/demisto_sdk/scripts/generate_commands_docs/generate_commands_docs.py
new file mode 100644
index 0000000000..751d64d831
--- /dev/null
+++ b/demisto_sdk/scripts/generate_commands_docs/generate_commands_docs.py
@@ -0,0 +1,131 @@
+import inspect
+import sys
+from pathlib import Path
+from typing import List
+
+from typer.main import get_command
+
+from demisto_sdk.__main__ import app
+
+
+def extract_changed_commands(modified_files: List[str]) -> List[str]:
+    """Extract the command names from the list of modified files."""
+    changed_commands = []
+    for file in modified_files:
+        # Check if the modified file ends with '_setup.py'
+        if file.endswith("_setup.py"):
+            command_name = Path(file).stem.replace("_setup", "")
+            changed_commands.append(command_name)
+    return changed_commands
+
+
+def get_sdk_command(command_name: str):
+    click_app = get_command(app)
+    command = click_app.commands.get(command_name)  # type: ignore[attr-defined]
+
+    if command is None:
+        return f"No README found for command: {command_name}"
+    return command
+
+
+def get_command_description(command_name: str) -> str:
+    """Retrieve the description (docstring) for the command."""
+    command = get_sdk_command(command_name)
+    if isinstance(command, str):
+        return command
+
+    command_func = command.callback
+    return inspect.getdoc(command_func) or "No description provided"
+
+
+def get_command_options(command_name: str) -> str:
+    """Generate the options section for the command."""
+    command = get_sdk_command(command_name)
+    if isinstance(command, str):
+        return command
+    options_text = "### Options\n\n"
+    for param in command.params:
+        param_name = (
+            f"--{param.name.replace('_', '-')}"
+            if param.param_type_name == "option"
+            else param.name
+        )
+        options_text += (
+            f"- **{param_name}**: {param.help or 'No description provided'}\n"
+        )
+        if param.default is not None:
+            options_text += f"  - Default: `{param.default}`\n"
+        options_text += "\n"
+    return options_text
+
+
+def update_readme(command_name: str, description: str, options: str):
+    """Update the README.md file for the command with the given description and options."""
+    command_doc_path = Path("demisto_sdk/commands") / command_name / "README.md"
+
+    if not command_doc_path.exists():
+        print(f"README.md not found for command: {command_name}")  # noqa: T201
+        return
+
+    # Read the existing README.md
+    with command_doc_path.open("r") as f:
+        readme_content = f.read()
+
+    # Update the Description section
+    description_start = readme_content.find("## Description")
+    if description_start != -1:
+        description_end = readme_content.find(
+            "##", description_start + len("## Description")
+        )
+        if description_end == -1:
+            description_end = len(readme_content)
+        updated_readme = (
+            readme_content[:description_start]
+            + f"## Description\n{description}\n\n"
+            + readme_content[description_end:]
+        )
+    else:
+        updated_readme = f"{readme_content}\n## Description\n{description}\n\n"
+
+    # Update the Options section
+    options_start = updated_readme.find("### Options")
+    if options_start != -1:
+        options_end = updated_readme.find("##", options_start + len("### Options"))
+        if options_end == -1:
+            options_end = len(updated_readme)
+        updated_readme = (
+            updated_readme[:options_start] + options + updated_readme[options_end:]
+        )
+    else:
+        updated_readme += "\n" + options
+
+    # Write the updated content back into the README.md
+    with command_doc_path.open("w") as f:
+        f.write(updated_readme)
+
+    print(f"Description and options section updated for command: {command_name}")  # noqa: T201
+
+
+def generate_docs_for_command(command_name: str):
+    """Generate documentation for a specific command."""
+    description = get_command_description(command_name)
+    options = get_command_options(command_name)
+    update_readme(command_name, description, options)
+
+
+def main():
+    if len(sys.argv) < 2:
+        print("Usage: python generate_docs.py <modified_file1> <modified_file2> ...")  # noqa: T201
+        sys.exit(1)
+
+    # Receive the list of modified files from command-line arguments
+    modified_files = sys.argv[1:]
+    changed_commands = extract_changed_commands(modified_files)
+
+    # Generate documentation for each modified command
+    for command_name in changed_commands:
+        generate_docs_for_command(command_name)
+
+
+if __name__ == "__main__":
+    main()
diff --git a/demisto_sdk/scripts/generate_commands_docs/pre_commit_generate_docs.py b/demisto_sdk/scripts/generate_commands_docs/pre_commit_generate_docs.py
new file mode 100644
index 0000000000..301b65f31c
--- /dev/null
+++ b/demisto_sdk/scripts/generate_commands_docs/pre_commit_generate_docs.py
@@ -0,0 +1,62 @@
+import os
+import re
+import subprocess
+import sys
+from pathlib import Path
+
+EXCLUDED_BRANCHES_REGEX = r"^(master|[0-9]+\.[0-9]+\.[0-9]+)$"
+
+
+def get_current_branch():
+    """Returns the current Git branch name."""
+    result = subprocess.run(["git", "rev-parse", "--abbrev-ref", "HEAD"], capture_output=True, text=True)
+    return result.stdout.strip()
+
+
+def get_modified_files():
+    """Returns a list of files modified in the current commit."""
+    result = subprocess.run(["git", "diff", "--cached", "--name-only"], capture_output=True, text=True)
+    return result.stdout.splitlines()
+
+
+def extract_changed_commands(modified_files):
+    """Extract command names from modified _setup.py files."""
+    changed_commands = []
+    for file in modified_files:
+        if file.endswith("_setup.py"):
+            command_name = Path(file).stem.replace("_setup", "")
+            changed_commands.append(command_name)
+    return changed_commands
+
+
+def main():
+    # Check if the branch should be excluded
+    current_branch = get_current_branch()
+    if re.match(EXCLUDED_BRANCHES_REGEX, current_branch):
+        print(f"Pre-commit hook skipped on branch '{current_branch}'")
+        sys.exit(0)
+
+    # Get the list of modified files
+    modified_files = get_modified_files()
+
+    # Filter for _setup.py files to determine which commands changed
+    changed_commands = extract_changed_commands(modified_files)
+    if not changed_commands:
+        print("No modified _setup.py files found. Skipping documentation generation.")
+        sys.exit(0)
+
+    # Run the documentation generation script with all changed commands
+    print(f"Generating documentation for modified commands: {changed_commands}")
+    subprocess.run([sys.executable, "generate_docs.py", *changed_commands])
+
+    # Stage the newly generated or updated README files for each command
+    for command_name in changed_commands:
+        readme_file = Path("demisto-sdk/commands") / command_name / "README.md"
+        if readme_file.exists():
+            subprocess.run(["git", "add", str(readme_file)])
+
+    print("Pre-commit hook completed successfully.")
+
+
+if __name__ == "__main__":
+    main()