diff --git a/.github/skills/build-plugin/SKILL.md b/.github/skills/build-plugin/SKILL.md
index 072cc003f..d700c78a4 100644
--- a/.github/skills/build-plugin/SKILL.md
+++ b/.github/skills/build-plugin/SKILL.md
@@ -7,6 +7,10 @@ description: Build and install Python plugins using plugin_builder.py. Use when
 
 Use `plugin_builder.py` from repo root. Requires venv activation first.
 
+By default, plugins are installed in **editable mode** (`pip install -e`), so
+Python source edits take effect without rebuilding. Pass `--wheel` to use the
+legacy build-wheel-then-install flow.
+
 ## First-time setup
 
 ```bash
@@ -22,13 +26,13 @@ npm install
 ## Commands
 
 ```bash
-# First install of a plugin (REQUIRED before using --reinstall)
+# First install of a plugin (editable)
 python tools/plugin_builder.py --install ui
 
 # First install with JS assets (for plugins with JS components)
 python tools/plugin_builder.py --js --install python-remote-file-source
 
-# Reinstall a plugin (use when code changed but version not bumped)
+# Reinstall a plugin (use when JS bundles or entry points need re-linking)
 python tools/plugin_builder.py --reinstall ui
 
 # Build multiple plugins
@@ -39,21 +43,33 @@ python tools/plugin_builder.py --js --reinstall ui
 
 # Build, install, and start server
 python tools/plugin_builder.py --install --server ui
+
+# Legacy wheel-based flow (build wheels and install them)
+python tools/plugin_builder.py --wheel --reinstall ui
 ```
 
 ## Common flags
 
-- `--install` / `-i`: Install plugin (REQUIRED on first run)
-- `--reinstall` / `-r`: Force reinstall (no version bump needed, only after --install)
-- `--js` / `-j`: Also build JS assets (additive - Python build still happens)
+- `--install` / `-i`: Install plugin (editable by default)
+- `--reinstall` / `-r`: Force reinstall (`--force-reinstall --no-deps`); useful
+  to refresh JS bundles or re-link entry points
+- `--js` / `-j`: Also build JS assets (additive - Python install still happens)
 - `--server` / `-s`: Start deephaven-server after build
 - `--docs` / `-d`: Build documentation
 - `--server-arg` / `-sa`: Pass argument to deephaven server (e.g., `-sa --port=9999`)
+- `--wheel`: Opt out of editable mode and use the legacy build-wheel + install path
+- `--build` / `-b`: Build wheels (only meaningful with `--wheel`; ignored otherwise)
 
 ## Notes
 
-- **Must use `--install` on first run** - `--reinstall` will fail if plugin not already installed
-- Assumes Python `.venv` is already sourced (`source .venv/bin/activate`)
-- Use `--reinstall` during development when version hasn't changed
-- Running with no flags defaults to `--js --install` for all plugins
-- First run may take longer to install dependencies
+- Editable installs mean Python source changes take effect on the next server
+  restart without rerunning the builder.
+- Use `--reinstall` when you've changed JS bundles, entry points, or package
+  metadata that needs re-linking.
+- JS assets are still bundled into `src/deephaven/<pkg>/_js/` during install
+  (driven by each plugin's `setup.py`); rerun the install when JS changes.
+- Assumes Python `.venv` is already sourced (`source .venv/bin/activate`).
+- Running with no flags defaults to `--js --install` for all plugins.
+- First run may take longer to install dependencies.
+- `--wheel` is required if you specifically need a wheel artifact (e.g. to
+  inspect or distribute it); CI builds wheels independently of this script.
diff --git a/requirements.txt b/requirements.txt
index 9b252f14f..2267d7e54 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -1,7 +1,9 @@
 pre-commit==3.3.3
 build
 pip
-setuptools
+# setuptools>=64 required for PEP 660 editable installs of namespace packages
+# used by `pip install -e` in tools/plugin_builder.py
+setuptools>=64
 tox
 
 # Plugin builder dependencies
diff --git a/tools/plugin_builder.py b/tools/plugin_builder.py
index d3a6c5768..64b5c5b19 100644
--- a/tools/plugin_builder.py
+++ b/tools/plugin_builder.py
@@ -249,6 +249,39 @@ def install_with_all_extras(
     run_command(f'find {wheels} | xargs -I {{}} {install} "{{}}[all]"')
 
 
+def run_install_editable(
+    plugins: tuple[str],
+    reinstall: bool,
+) -> None:
+    """
+    Install plugins in editable mode (pip install -e) for plugins that have a setup.cfg.
+    Editable installs let Python source edits take effect without rebuilding wheels.
+
+    Args:
+        plugins: The plugins to install. If empty, all plugins with a setup.cfg are installed.
+        reinstall: Whether to reinstall the plugins.
+            If True, the --force-reinstall and --no-deps flags are added to pip install.
+            Useful when JS bundles or entry points need to be re-linked.
+
+    Returns:
+        None
+    """
+    install = "pip install"
+    if reinstall:
+        install += " --force-reinstall --no-deps"
+    install += " -e"
+
+    for plugin in plugin_names(plugins):
+        plugin_path = f"{plugins_dir}/{plugin}"
+        if os.path.exists(f"{plugin_path}/setup.cfg"):
+            click.echo(f"Installing {plugin} (editable)")
+            run_command(f'{install} "{plugin_path}[all]"')
+        elif plugins:
+            # explicit plugin list: error on missing setup.cfg, matching wheel-mode behavior
+            click.echo(f"Error: setup.cfg not found in {plugin}")
+            os._exit(1)
+
+
 def run_install(
     plugins: tuple[str],
     reinstall: bool,
@@ -372,6 +405,7 @@ def handle_args(
     server_arg: tuple[str],
     js: bool,
     configure: str | None,
+    wheel: bool,
     plugins: tuple[str],
     stop_event: threading.Event,
 ) -> None:
@@ -388,6 +422,8 @@ def handle_args(
         js: True to build the JS files for the plugins
         configure: The configuration to use. 'min' will install the minimum requirements for development.
             'full' will install some optional packages for development, such as sphinx and deephaven-server.
+        wheel: True to use the legacy wheel-based build/install path. When False (the default),
+            installs run as `pip install -e` so Python source edits do not require a rebuild.
         plugins: Plugins to build and install
         stop_event: The event to signal the function to stop
     """
@@ -400,6 +436,13 @@ def handle_args(
         js = True
         install = True
 
+    # in editable mode, --build is meaningless because no wheels are produced.
+    # warn once so the user is not surprised when nothing is built.
+    if build and not wheel:
+        click.echo(
+            "Note: --build is ignored in editable mode. Pass --wheel to build wheels."
+        )
+
     # if this thread is signaled to stop, return after the current command
     # instead of in the middle of a command, which could leave the environment in a bad state
     if stop_event.is_set():
@@ -411,14 +454,17 @@ def handle_args(
     if stop_event.is_set():
         return
 
-    if build or install or reinstall:
+    if wheel and (build or install or reinstall):
         run_build(plugins, len(plugins) > 0)
 
     if stop_event.is_set():
         return
 
     if install or reinstall:
-        run_install(plugins, reinstall)
+        if wheel:
+            run_install(plugins, reinstall)
+        else:
+            run_install_editable(plugins, reinstall)
 
     if stop_event.is_set():
         return
@@ -460,13 +506,18 @@ def handle_args(
     "By default, all plugins with the necessary file are used unless specified via the plugins arg.",
 )
 @click.option(
-    "--build", "-b", is_flag=True, help="Build all plugins that have a setup.cfg"
+    "--build",
+    "-b",
+    is_flag=True,
+    help="Build all plugins that have a setup.cfg. "
+    "Only meaningful with --wheel; ignored in the default editable-install mode.",
 )
 @click.option(
     "--install",
     "-i",
     is_flag=True,
-    help="Install all plugins that have a setup.cfg. This is the default behavior if no flags are provided.",
+    help="Install all plugins that have a setup.cfg. This is the default behavior if no flags are provided. "
+    "Defaults to an editable install (`pip install -e`); pass --wheel to build and install wheels instead.",
 )
 @click.option(
     "--reinstall",
@@ -474,7 +525,8 @@ def handle_args(
     is_flag=True,
     help="Reinstall all plugins that have a setup.cfg. "
     "This adds the --force-reinstall and --no-deps flags to pip install. "
-    "Useful to reinstall a plugin that has already been installed and does not have a new version number.",
+    "Useful to reinstall a plugin that has already been installed and does not have a new version number, "
+    "or to re-link refreshed JS bundles / entry points in editable mode.",
 )
 @click.option(
     "--docs",
@@ -525,6 +577,13 @@ def handle_args(
     "This will rerun all other commands (except configure) when files are changed. "
     "The top level directory of this project is watched.",
 )
+@click.option(
+    "--wheel",
+    is_flag=True,
+    help="Use the legacy wheel-based build/install path. "
+    "By default, plugins are installed with `pip install -e` (editable) so Python source edits "
+    "do not require a wheel rebuild. Pass --wheel to build wheels and install them instead.",
+)
 @click.argument("plugins", nargs=-1)
 def builder(
     build: bool,
@@ -537,6 +596,7 @@ def builder(
     js: bool,
     configure: str | None,
     watch: bool,
+    wheel: bool,
     plugins: tuple[str],
 ) -> None:
     """
@@ -554,6 +614,7 @@ def builder(
         configure: The configuration to use. 'min' will install the minimum requirements for development.
             'full' will install some optional packages for development, such as sphinx and deephaven-server.
         watch: True to rerun the other commands when files are changed
+        wheel: True to use the legacy wheel-based build/install path instead of editable installs
         plugins: Plugins to build and install
     """
     # no matter what, only run the configure command once
@@ -575,6 +636,7 @@ def run_handle_args() -> None:
             server_arg,
             js,
             configure,
+            wheel,
             plugins,
             stop_event,
         )