diff --git a/extension/extension.ts b/extension/extension.ts
index f8df845..39f9672 100644
--- a/extension/extension.ts
+++ b/extension/extension.ts
@@ -25,6 +25,7 @@ import { RpcServer } from './server/RpcServer';
 import { Mutex } from 'async-mutex';
 import { TelemetryReporter } from './telemetry';
 import { PythonEnvironmentManager } from './pyenv';
+import { setupWorkspaceWithPixi } from './utils/pixiSetup';
 
 /**
  * This class provides an entry point for the Mojo extension, managing the
@@ -85,6 +86,12 @@ Activating the Mojo Extension
         }),
       );
 
+      this.pushSubscription(
+        vscode.commands.registerCommand('mojo.init.pixi.project.nightly', async () => {
+          await setupWorkspaceWithPixi(logger, this.pyenvManager);
+        }),
+      );
+
       // Initialize the formatter.
       this.pushSubscription(registerFormatter(this.pyenvManager, this.logger));
 
diff --git a/extension/pyenv.ts b/extension/pyenv.ts
index 8690826..0601513 100644
--- a/extension/pyenv.ts
+++ b/extension/pyenv.ts
@@ -59,7 +59,7 @@ export class SDK {
     readonly visualizersPath: string,
     /// The path to the LLDB executor.
     readonly lldbPath: string,
-  ) {}
+  ) { }
 
   @Memoize()
   /// Checks if the version of LLDB shipped with this SDK supports Python scripting.
@@ -78,8 +78,7 @@ export class SDK {
         return true;
       } else {
         this.logger.info(
-          `Python scripting support in LLDB not found. The test script returned:\n${
-            stdout
+          `Python scripting support in LLDB not found. The test script returned:\n${stdout
           }\n${stderr}`,
         );
       }
@@ -315,6 +314,13 @@ export class PythonEnvironmentManager extends DisposableContext {
     );
   }
 
+  /// Updates the active Python environment path if the provided path differs.
+  public setPythonEnv(path: string) {
+    if (path !== this.api?.environments.getActiveEnvironmentPath().path) {
+      this.api?.environments.updateActiveEnvironmentPath(path);
+    }
+  }
+
   /// Attempts to create a SDK from a home path. Returns undefined if creation failed.
   public async createSDKFromHomePath(
     kind: SDKKind,
diff --git a/extension/utils/pixiSetup.ts b/extension/utils/pixiSetup.ts
new file mode 100644
index 0000000..ff1ded4
--- /dev/null
+++ b/extension/utils/pixiSetup.ts
@@ -0,0 +1,146 @@
+import * as vscode from 'vscode';
+
+import { Logger } from './../logging';
+import { quote } from 'shell-quote';
+import { exec } from 'child_process';
+import { promisify } from 'util';
+import { PythonEnvironmentManager } from '../pyenv';
+
+const execAsync = promisify(exec);
+
+/**
+ * Sets up a workspace with Pixi package manager for Mojo development.
+ * 
+ * This function performs the following steps:
+ * 1. Checks if Pixi is installed, installs it if missing
+ * 2. Initializes a Pixi project with Mojo-compatible channels if pixi.toml doesn't exist
+ * 3. Adds the Mojo package if not already present
+ * 4. Configures the Python environment to use Pixi's Python interpreter
+ * 
+ * @param logger - Logger instance for debugging and tracking progress
+ * @param pyenvManager - Optional Python environment manager to configure the interpreter path
+ * @returns Promise that resolves when setup is complete
+ * 
+ * @example
+ * ```typescript
+ * await setupWorkspaceWithPixi(logger, pyenvManager);
+ * ```
+ */
+export async function setupWorkspaceWithPixi(
+    logger: Logger,
+    pyenvManager?: PythonEnvironmentManager,
+): Promise<void> {
+    logger.debug("Init pixi project")
+
+    if (await isPixiInstalled() === false) {
+        logger.debug("Need to install pixi first");
+        await runTaskAndWait('curl -fsSL https://pixi.sh/install.sh | bash', "Install Pixi");
+    }
+
+    if ((await vscode.workspace.findFiles('pixi.toml')).length === 0) {
+        await runTaskAndWait(
+            quote([
+                'pixi',
+                'init',
+                '-c',
+                'https://conda.modular.com/max-nightly/',
+                '-c',
+                'conda-forge'
+            ]),
+            "Pixi init"
+        );
+    }
+
+    if ((await vscode.workspace.findFiles('.pixi/**/mojo')).length === 0) {
+        await runTaskAndWait(
+            quote([
+                'pixi',
+                'add',
+                'mojo',
+            ]),
+            "Adding Mojo"
+        );
+    }
+
+    const pythonInterpreterPaths = await vscode.workspace.findFiles('.pixi/**/python')
+    if (pythonInterpreterPaths.length === 1) {
+        pyenvManager?.setPythonEnv(pythonInterpreterPaths[0].fsPath);
+    }
+}
+
+/**
+ * Checks if Pixi package manager is installed on the system.
+ * 
+ * Attempts to execute `pixi --version` to verify installation.
+ * 
+ * @returns Promise resolving to true if Pixi is installed, false otherwise
+ * 
+ * @example
+ * ```typescript
+ * if (await isPixiInstalled()) {
+ *   console.log('Pixi is available');
+ * }
+ * ```
+ */
+async function isPixiInstalled(): Promise<boolean> {
+    try {
+        // Try to run pixie with a version or help flag
+        await execAsync('pixi --version', {
+            shell: '/bin/bash',
+            env: {
+                ...process.env,
+                PATH: `${process.env.HOME}/.pixi/bin:${process.env.PATH}`
+            }
+        });
+        return true;
+    } catch (error) {
+        return false;
+    }
+}
+
+/**
+ * Executes a shell command as a VS Code task and waits for completion.
+ * 
+ * Creates and runs a workspace-scoped shell task, monitoring it until completion.
+ * The task is visible in VS Code's task output panel.
+ * 
+ * @param command - The shell command to execute
+ * @param name - Display name for the task in VS Code's task list
+ * @returns Promise resolving to true if the task succeeded (exit code 0), false otherwise
+ * 
+ * @example
+ * ```typescript
+ * const success = await runTaskAndWait('npm install', 'Install Dependencies');
+ * if (success) {
+ *   console.log('Installation completed successfully');
+ * }
+ * ```
+ */
+async function runTaskAndWait(command: string, name: string): Promise<boolean> {
+    const env = {
+        ...process.env,
+        PATH: `${process.env.HOME}/.pixi/bin:${process.env.PATH}`
+    };
+    const task = new vscode.Task(
+        { type: 'shell' },
+        vscode.TaskScope.Workspace,
+        name,
+        'Mojo Extension',
+        new vscode.ShellExecution(command, {
+            env: env,
+            executable: '/bin/bash', // Explicitly use bash
+            shellArgs: ['-c']
+        })
+    );
+
+    const execution = await vscode.tasks.executeTask(task);
+
+    return new Promise((resolve) => {
+        const disposable = vscode.tasks.onDidEndTaskProcess((e) => {
+            if (e.execution === execution) {
+                disposable.dispose();
+                resolve(e.exitCode === 0);
+            }
+        });
+    });
+}
\ No newline at end of file
diff --git a/package.json b/package.json
index dbad5c9..5398eb2 100644
--- a/package.json
+++ b/package.json
@@ -188,6 +188,11 @@
         "command": "mojo.lsp.stopRecord",
         "title": "Stop recording requests and notifications sent to the Mojo language server."
       },
+      {
+        "category": "Mojo",
+        "command": "mojo.init.pixi.project.nightly",
+        "title": "Setup workspace with pixi (nightly)"
+      },
       {
         "category": "Developer",
         "command": "mojo.lsp.debug",