diff --git a/docs/changes.rst b/docs/changes.rst
index ee1ea5d7..3ad5b2e1 100644
--- a/docs/changes.rst
+++ b/docs/changes.rst
@@ -4,6 +4,15 @@ Changes
 
 This change log is used to track all major changes to Mopidy.
 
+v0.14.0 (UNRELEASED)
+====================
+
+**Dependencies**
+
+- setuptools or distribute is now required. We've introduced this dependency to
+  use setuptools' entry points functionality to find installed Mopidy
+  extensions.
+
 
 v0.13.0 (2013-03-31)
 ====================
diff --git a/requirements/core.txt b/requirements/core.txt
index 9ffac2cf..d8e81e61 100644
--- a/requirements/core.txt
+++ b/requirements/core.txt
@@ -1,2 +1,5 @@
+setuptools
+# Available as python-setuptools in Debian/Ubuntu
+
 Pykka >= 1.1
 # Available as python-pykka from apt.mopidy.com
diff --git a/setup.py b/setup.py
index 5840ca53..1c0d10b8 100644
--- a/setup.py
+++ b/setup.py
@@ -1,101 +1,47 @@
-"""
-Most of this file is taken from the Django project, which is BSD licensed.
-"""
-
 from __future__ import unicode_literals
 
-from distutils.core import setup
-from distutils.command.install_data import install_data
-from distutils.command.install import INSTALL_SCHEMES
-import os
 import re
-import sys
+
+from setuptools import setup, find_packages
 
 
-def get_version():
-    init_py = open('mopidy/__init__.py').read()
+def get_version(filename):
+    init_py = open(filename).read()
     metadata = dict(re.findall("__([a-z]+)__ = '([^']+)'", init_py))
     return metadata['version']
 
 
-class osx_install_data(install_data):
-    # On MacOS, the platform-specific lib dir is
-    # /System/Library/Framework/Python/.../ which is wrong. Python 2.5 supplied
-    # with MacOS 10.5 has an Apple-specific fix for this in
-    # distutils.command.install_data#306. It fixes install_lib but not
-    # install_data, which is why we roll our own install_data class.
-
-    def finalize_options(self):
-        # By the time finalize_options is called, install.install_lib is set to
-        # the fixed directory, so we set the installdir to install_lib. The
-        # install_data class uses ('install_data', 'install_dir') instead.
-        self.set_undefined_options('install', ('install_lib', 'install_dir'))
-        install_data.finalize_options(self)
-
-
-if sys.platform == "darwin":
-    cmdclasses = {'install_data': osx_install_data}
-else:
-    cmdclasses = {'install_data': install_data}
-
-
-def fullsplit(path, result=None):
-    """
-    Split a pathname into components (the opposite of os.path.join) in a
-    platform-neutral way.
-    """
-    if result is None:
-        result = []
-    head, tail = os.path.split(path)
-    if head == '':
-        return [tail] + result
-    if head == path:
-        return result
-    return fullsplit(head, [tail] + result)
-
-
-# Tell distutils to put the data_files in platform-specific installation
-# locations. See here for an explanation:
-# http://groups.google.com/group/comp.lang.python/browse_thread/
-# thread/35ec7b2fed36eaec/2105ee4d9e8042cb
-for scheme in INSTALL_SCHEMES.values():
-    scheme['data'] = scheme['purelib']
-
-
-# Compile the list of packages available, because distutils doesn't have
-# an easy way to do this.
-packages, data_files = [], []
-root_dir = os.path.dirname(__file__)
-if root_dir != b'':
-    os.chdir(root_dir)
-project_dir = b'mopidy'
-
-for dirpath, dirnames, filenames in os.walk(project_dir):
-    # Ignore dirnames that start with '.'
-    for i, dirname in enumerate(dirnames):
-        if dirname.startswith(b'.'):
-            del dirnames[i]
-    if b'__init__.py' in filenames:
-        packages.append(b'.'.join(fullsplit(dirpath)))
-    elif filenames:
-        data_files.append([
-            dirpath, [os.path.join(dirpath, f) for f in filenames]])
-
-
 setup(
     name='Mopidy',
-    version=get_version(),
-    author='Stein Magnus Jodal',
-    author_email='stein.magnus@jodal.no',
-    packages=packages,
-    package_data={b'mopidy': ['backends/spotify/spotify_appkey.key']},
-    cmdclass=cmdclasses,
-    data_files=data_files,
-    scripts=['bin/mopidy', 'bin/mopidy-scan'],
+    version=get_version('mopidy/__init__.py'),
     url='http://www.mopidy.com/',
     license='Apache License, Version 2.0',
+    author='Stein Magnus Jodal',
+    author_email='stein.magnus@jodal.no',
     description='Music server with MPD and Spotify support',
     long_description=open('README.rst').read(),
+    packages=find_packages(exclude=['tests', 'tests.*']),
+    zip_safe=False,
+    include_package_data=True,
+    install_requires=[
+        'setuptools',
+        'Pykka >= 1.1',
+    ],
+    extras_require={
+        b'spotify': ['pyspotify >= 1.9, < 1.11'],
+        b'lastfm': ['pylast >= 0.5.7'],
+        b'http': ['cherrypy >= 3.2.2', 'ws4py >= 0.2.3'],
+        b'external_mixers': ['pyserial'],
+    },
+    test_suite='nose.collector',
+    tests_require=[
+        'nose',
+        'mock >= 0.7',
+        'unittest2',
+    ],
+    entry_points={
+        b'mopidy.extension': [],
+    },
     classifiers=[
         'Development Status :: 4 - Beta',
         'Environment :: No Input/Output (Daemon)',