diff --git a/packages/cli/src/pywrangler/cli.py b/packages/cli/src/pywrangler/cli.py
index f196f03b..c05f6e63 100644
--- a/packages/cli/src/pywrangler/cli.py
+++ b/packages/cli/src/pywrangler/cli.py
@@ -136,7 +136,7 @@ def types_command(outdir: str | None, config: str | None) -> Never:
     "--allow-build/--no-allow-build",
     default=None,
     help=(
-        "Allow building source distributions and local directory sources. "
+        "Allow building any source distribution, not just local path sources. "
         "Defaults to the [tool.pywrangler] allow-build setting in pyproject.toml."
     ),
 )
diff --git a/packages/cli/src/pywrangler/resolve.py b/packages/cli/src/pywrangler/resolve.py
index ae2aff7c..50b9105a 100644
--- a/packages/cli/src/pywrangler/resolve.py
+++ b/packages/cli/src/pywrangler/resolve.py
@@ -30,6 +30,9 @@ def __init__(self, lockfile: Path) -> None:
         # Names of packages sourced from a local path. They need refreshing when
         # rebuilt.
         self.local_packages: list[str] = []
+        # Subset of `local_packages` that have no wheel and so must be built
+        # (directories, sdists). Local `.whl` files are excluded.
+        self.local_build_packages: list[str] = []
 
         with open(lockfile, "rb") as f:
             data = tomllib.load(f)
@@ -39,18 +42,26 @@ def __init__(self, lockfile: Path) -> None:
             if not name:
                 logger.warning("Skipping malformed lockfile entry: %s", pkg)
                 continue
-            if any(self._is_local_source(pkg, key) for key in self._LOCAL_SOURCE_KEYS):
+            local_paths = [
+                path
+                for key in self._LOCAL_SOURCE_KEYS
+                if (path := self._local_source_path(pkg, key)) is not None
+            ]
+            if local_paths:
                 self.local_packages.append(name)
+                if not all(path.endswith(".whl") for path in local_paths):
+                    self.local_build_packages.append(name)
 
             self.requirements.append((name, pkg.get("version")))
 
     @staticmethod
-    def _is_local_source(pkg: dict, key: str) -> bool:
+    def _local_source_path(pkg: dict, key: str) -> str | None:
         source = pkg.get(key)
         if not isinstance(source, dict):
-            return False
+            return None
         # A local reference has a `path`
-        return "path" in source
+        path = source.get("path")
+        return path if isinstance(path, str) else None
 
 
 def parse_requirements() -> list[str]:
@@ -79,9 +90,9 @@ def _compile_lockfile(
     are preserved across re-runs (no silent upgrades).
 
     By default ``--no-build`` is passed so only prebuilt wheels are used. This
-    is because building a Pyodide platformed wheel will fail. Set *allow_build*
-    to permit building source distributions / local directory sources. This is
-    useful for testing against local checkouts of pure Python packages.
+    is because building a Pyodide platformed wheel will fail. Local directory
+    sources still resolve because uv reads their static metadata without
+    building. Set *allow_build* to permit building source distributions.
     """
     project_root = get_project_root()
     with temp_requirements_file(supplemental_requirements) as req_in_path:
diff --git a/packages/cli/src/pywrangler/sync.py b/packages/cli/src/pywrangler/sync.py
index 97a87884..53636cf2 100644
--- a/packages/cli/src/pywrangler/sync.py
+++ b/packages/cli/src/pywrangler/sync.py
@@ -169,9 +169,10 @@ def _install_requirements_to_vendor(
 ) -> str | None:
     """Install packages to the Pyodide vendor directory from pylock.toml.
 
-    By default ``--no-build`` is passed so only prebuilt wheels install. When
-    *allow_build* is True, source distributions / local directory sources are
-    allowed to build.
+    By default only prebuilt wheels install, except for local path sources such
+    as directories and sdists, which have no wheel and are explicitly requested
+    by the project, so they are always built. When *allow_build* is True, every
+    source distribution is allowed to build.
 
     Returns:
         Error message string if installation failed, None if successful.
@@ -206,13 +207,14 @@ def _install_requirements_to_vendor(
 
     install_cmd = ["uv", "pip", "install"]
     if not allow_build:
-        install_cmd.append("--no-build")
-    else:
-        # uv caches built wheels for local sources keyed on their path, so edits
-        # to local checkouts wouldn't be picked up. Refresh the build cache for
-        # those packages so `sync` always rebuilds them.
-        for name in plan.local_packages:
-            install_cmd += ["--refresh-package", name]
+        install_cmd += ["--only-binary", ":all:"]
+        for name in plan.local_build_packages:
+            install_cmd += ["--no-binary", name]
+    # uv caches built wheels for local sources keyed on their path, so edits to
+    # local checkouts wouldn't be picked up. Refresh the build cache for those
+    # packages so `sync` always rebuilds them.
+    for name in plan.local_packages:
+        install_cmd += ["--refresh-package", name]
     install_cmd += ["-r", str(plan.lockfile), "--preview-features", "pylock"]
     result = run_command(
         install_cmd,
diff --git a/packages/cli/tests/test_cli.py b/packages/cli/tests/test_cli.py
index 65c44513..71c578fb 100644
--- a/packages/cli/tests/test_cli.py
+++ b/packages/cli/tests/test_cli.py
@@ -392,9 +392,9 @@ def create_dummy_build_dep(parent_dir: Path, name: str = "dummy-build-dep") -> P
     """Create a tiny pure-Python dependency that must be built from source.
 
     The package only exists as a local directory (no prebuilt wheel on any
-    index), so installing it requires ``uv`` to run its build backend. This is
-    exactly what ``--allow-build`` gates: with ``--no-build`` (the default) the
-    resolver refuses to build it, and with ``--allow-build`` it succeeds.
+    index), so installing it requires ``uv`` to run its build backend. Local
+    path sources are the one kind of source ``sync`` builds even without
+    ``--allow-build``.
 
     Returns the path to the created dependency directory.
     """
@@ -428,8 +428,8 @@ def create_worker_pyproject_with_local_dep(
 
     The dependency is expressed as a PEP 508 direct reference to the local
     directory (``name @ file://...``) so the resolver treats it as a
-    ``directory`` source that must be built from source. ``allow_build_config``
-    toggles the ``[tool.pywrangler] allow-build`` key.
+    ``directory`` source that must be built. ``allow_build_config`` toggles the
+    ``[tool.pywrangler] allow-build`` key.
     """
     pywrangler_table = (
         "[tool.pywrangler]\nallow-build = true\n" if allow_build_config else ""
@@ -455,13 +455,17 @@ def create_worker_pyproject_with_local_dep(
     sys.platform == "win32",
     reason="FIXME Pyodide WASM interpreter cannot run setuptools build backends on Windows",
 )
-def test_sync_allow_build_local_dependency(test_dir):
-    """End-to-end test for --allow-build with a local source dependency.
+@pytest.mark.parametrize(
+    "extra_args", [[], ["--no-allow-build"]], ids=["default", "explicit"]
+)
+def test_sync_builds_local_directory_dependency(test_dir, extra_args):
+    """End-to-end test: local directory sources are built without --allow-build.
 
     A tiny dummy package that only exists as a local directory (and therefore
-    must be built from source) is added to the worker's pyproject.toml. Syncing
-    without --allow-build must fail (default is --no-build), while syncing with
-    --allow-build must succeed and vendor the built package.
+    must be built from source) is added to the worker's pyproject.toml. Unlike
+    source distributions from an index, which stay blocked so uv can't pick a
+    newer sdist over an older Pyodide wheel, a local path source is something
+    the project explicitly asked for, so `sync` builds it.
     """
     dep_name = "dummy-build-dep"
     dep_dir = create_dummy_build_dep(test_dir, dep_name)
@@ -469,51 +473,21 @@ def test_sync_allow_build_local_dependency(test_dir):
     create_test_wrangler_jsonc(test_dir, "src/worker.py")
 
     vendor_path = test_dir / "python_modules"
-    sync_cmd = ["uv", "run", "pywrangler", "sync"]
-
-    # Without --allow-build: the default --no-build rejects the local source.
-    result = subprocess.run(
-        [*sync_cmd, "--no-allow-build"],
-        capture_output=True,
-        text=True,
-        cwd=test_dir,
-        check=False,
-    )
-    assert result.returncode != 0, (
-        "sync should fail without --allow-build because the local dependency "
-        "must be built from source"
-    )
-    assert not is_package_installed(vendor_path, dep_name), (
-        "dummy build dep should not be vendored when the build was rejected"
-    )
-
-    # With --allow-build: uv is allowed to build the local source.
     result = subprocess.run(
-        [*sync_cmd, "--force", "--allow-build"],
+        ["uv", "run", "pywrangler", "sync", *extra_args],
         capture_output=True,
         text=True,
         cwd=test_dir,
         check=False,
     )
-    assert result.returncode == 0, (
-        f"sync --allow-build failed: {result.stdout}\n{result.stderr}"
-    )
+    assert result.returncode == 0, f"sync failed: {result.stdout}\n{result.stderr}"
     assert is_package_installed(vendor_path, dep_name), (
-        f"{dep_name} should be built and vendored into python_modules "
-        "when --allow-build is passed"
+        f"{dep_name} should be built and vendored into python_modules"
     )
 
 
-@pytest.mark.skipif(
-    sys.platform == "win32",
-    reason="FIXME Pyodide WASM interpreter cannot run setuptools build backends on Windows",
-)
-def test_sync_allow_build_via_pyproject_config(test_dir):
-    """End-to-end test for the [tool.pywrangler] allow-build config fallback.
-
-    When no CLI flag is passed, sync should honor `allow-build = true` in the
-    [tool.pywrangler] table of pyproject.toml.
-    """
+def test_sync_reads_allow_build_from_pyproject_config(test_dir):
+    """`sync()` falls back to `[tool.pywrangler] allow-build` when no flag is passed."""
     dep_name = "dummy-build-dep"
     dep_dir = create_dummy_build_dep(test_dir, dep_name)
     create_worker_pyproject_with_local_dep(
@@ -521,21 +495,17 @@ def test_sync_allow_build_via_pyproject_config(test_dir):
     )
     create_test_wrangler_jsonc(test_dir, "src/worker.py")
 
-    vendor_path = test_dir / "python_modules"
-    result = subprocess.run(
-        ["uv", "run", "pywrangler", "sync"],
-        capture_output=True,
-        text=True,
-        cwd=test_dir,
-        check=False,
-    )
-    assert result.returncode == 0, (
-        f"sync failed with [tool.pywrangler] allow-build = true: "
-        f"{result.stdout}\n{result.stderr}"
-    )
-    assert is_package_installed(vendor_path, dep_name), (
-        f"{dep_name} should be vendored when allow-build is enabled via config"
-    )
+    with (
+        patch.object(pywrangler_sync, "check_requirements_txt"),
+        patch.object(pywrangler_sync, "create_workers_venv"),
+        patch.object(pywrangler_sync, "create_pyodide_venv"),
+        patch.object(pywrangler_sync, "resolve_requirements") as mock_resolve,
+        patch.object(pywrangler_sync, "install_requirements") as mock_install,
+    ):
+        pywrangler_sync.sync(force=True)
+
+    assert mock_resolve.call_args.kwargs["allow_build"] is True
+    assert mock_install.call_args.kwargs["allow_build"] is True
 
 
 def test_sync_command_handles_missing_pyproject():
diff --git a/packages/cli/tests/test_version_sync.py b/packages/cli/tests/test_version_sync.py
index 5d62a877..3338f7fe 100644
--- a/packages/cli/tests/test_version_sync.py
+++ b/packages/cli/tests/test_version_sync.py
@@ -68,6 +68,66 @@ def test_get_vendor_package_versions_disables_color():
     assert env.get("VIRTUAL_ENV") == str(Path("pyodide-venv"))
 
 
+class TestInstallToVendorCommand:
+    """Check the `uv pip install` flags built by `_install_requirements_to_vendor`."""
+
+    @pytest.fixture
+    def plan(self, tmp_path: Path) -> InstallPlan:
+        lockfile = tmp_path / "pylock.toml"
+        lockfile.write_text(
+            'lock-version = "1.0"\n'
+            '[[packages]]\nname = "click"\nversion = "8.1.7"\n'
+            '[[packages]]\nname = "local-dir"\n'
+            'directory = { path = "../local-dir", editable = false }\n'
+            '[[packages]]\nname = "local-wheel"\nversion = "3.0"\n'
+            'archive = { path = "dist/local_wheel-3.0-py3-none-any.whl" }\n'
+        )
+        return InstallPlan(lockfile)
+
+    def _run(self, plan: InstallPlan, tmp_path: Path, *, allow_build: bool) -> list:
+        with (
+            patch.object(pywrangler_sync, "run_command") as mock_run,
+            patch.object(pywrangler_sync, "get_project_root", return_value=tmp_path),
+            patch.object(
+                pywrangler_sync,
+                "get_vendor_modules_path",
+                return_value=tmp_path / "python_modules",
+            ),
+            patch.object(
+                pywrangler_sync,
+                "get_pyodide_venv_path",
+                return_value=tmp_path / "pyodide-venv",
+            ),
+            patch.object(pywrangler_sync, "get_python_version", return_value="3.12"),
+            patch.object(pywrangler_sync, "_write_sync_token"),
+            patch.object(pywrangler_sync, "get_vendor_token_path"),
+        ):
+            mock_run.return_value.returncode = 1
+            mock_run.return_value.stdout = "boom"
+            pywrangler_sync._install_requirements_to_vendor(
+                plan, allow_build=allow_build
+            )
+            return mock_run.call_args[0][0]
+
+    def test_default_builds_only_local_sources(self, plan, tmp_path):
+        command = self._run(plan, tmp_path, allow_build=False)
+        assert command[:3] == ["uv", "pip", "install"]
+        assert "--no-build" not in command
+        assert command[3:5] == ["--only-binary", ":all:"]
+        assert ["--no-binary", "local-dir"] == command[5:7]
+        # Local wheels must not be marked --no-binary or uv refuses them.
+        assert "local-wheel" not in command[: command.index("--refresh-package")]
+        assert command.count("--refresh-package") == 2
+        assert "-r" in command
+
+    def test_allow_build_lifts_binary_restriction(self, plan, tmp_path):
+        command = self._run(plan, tmp_path, allow_build=True)
+        assert "--only-binary" not in command
+        assert "--no-binary" not in command
+        assert "--no-build" not in command
+        assert command.count("--refresh-package") == 2
+
+
 class TestInstallRequirements:
     @patch.object(pywrangler_sync, "_install_requirements_to_vendor")
     @patch.object(pywrangler_sync, "_get_vendor_package_versions")
@@ -337,6 +397,26 @@ def test_empty_packages(self, tmp_path):
         plan = InstallPlan(lockfile)
         assert plan.requirements == []
 
+    def test_classifies_local_sources(self, tmp_path):
+        """Local directories and sdists must be built; local wheels must not."""
+        lockfile = tmp_path / "pylock.toml"
+        lockfile.write_text(
+            'lock-version = "1.0"\n'
+            '[[packages]]\nname = "from-pypi"\nversion = "1.0"\n'
+            'wheels = [{ url = "https://example.invalid/from_pypi-1.0-py3-none-any.whl" }]\n'
+            '[[packages]]\nname = "local-dir"\n'
+            'directory = { path = "../local-dir", editable = false }\n'
+            '[[packages]]\nname = "local-sdist"\nversion = "2.0"\n'
+            'sdist = { path = "dist/local_sdist-2.0.tar.gz" }\n'
+            '[[packages]]\nname = "local-wheel"\nversion = "3.0"\n'
+            'archive = { path = "dist/local_wheel-3.0-py3-none-any.whl" }\n'
+            '[[packages]]\nname = "remote-archive"\nversion = "4.0"\n'
+            'archive = { url = "https://example.invalid/remote_archive-4.0.tar.gz" }\n'
+        )
+        plan = InstallPlan(lockfile)
+        assert plan.local_packages == ["local-dir", "local-sdist", "local-wheel"]
+        assert plan.local_build_packages == ["local-dir", "local-sdist"]
+
 
 class TestResolveRequirements:
     @patch.object(pywrangler_resolve, "_compile_lockfile")
diff --git a/packages/django-cf/tests/conftest.py b/packages/django-cf/tests/conftest.py
index ebd4244b..3a76d5d5 100644
--- a/packages/django-cf/tests/conftest.py
+++ b/packages/django-cf/tests/conftest.py
@@ -4,7 +4,6 @@
 
 import os
 import shutil
-import subprocess
 from collections.abc import Generator
 from dataclasses import dataclass
 from pathlib import Path
@@ -15,6 +14,8 @@
     COMPAT_CONFIGS,
     CompatConfig,
     configure_compatibility,
+    link_packages,
+    pywrangler_sync,
 )
 from testlib.host import (
     dev_server as run_dev_server,
@@ -25,9 +26,6 @@
 
 TEST_DIR: Path = Path(__file__).parent
 PACKAGE_DIR: Path = TEST_DIR.parent
-WORKERS_PY: Path = PACKAGE_DIR.parent / "cli"
-WORKERS_RUNTIME_SDK: Path = PACKAGE_DIR.parent / "runtime-sdk" / "src"
-TESTLIB: Path = PACKAGE_DIR.parent / "testlib"
 DJANGO_CF_SRC: Path = PACKAGE_DIR / "django_cf"
 
 D1_PROJECT: Path = PACKAGE_DIR / "templates" / "d1"
@@ -80,24 +78,11 @@ def _serve(project_dir: Path, tmp_path: Path) -> Generator[DevServer]:
     target = tmp_path / project_dir.name
     shutil.copytree(project_dir, target, ignore=GENERATED)
 
-    pywrangler = ["uv", "run", "--with", str(WORKERS_PY), "pywrangler"]
     env = os.environ | {"WORKERS_CI": "1"}
+    pywrangler_sync(target, env)
 
-    sync = subprocess.run(
-        [*pywrangler, "sync"],
-        cwd=target,
-        env=env,
-        capture_output=True,
-        text=True,
-        check=False,
-    )
-    if sync.returncode != 0:
-        pytest.fail(
-            f"pywrangler sync failed for {project_dir.name}\n{sync.stdout}\n{sync.stderr}"
-        )
-
-    # `sync` vendors the released django-cf from PyPI; tests must exercise the
-    # working tree instead.
+    # These are deployable example apps, so their pyproject.toml depends on the
+    # released django-cf from PyPI. Tests must exercise the working tree instead.
     vendored = target / "python_modules" / "django_cf"
     shutil.rmtree(vendored, ignore_errors=True)
     shutil.copytree(
@@ -108,7 +93,6 @@ def _serve(project_dir: Path, tmp_path: Path) -> Generator[DevServer]:
         target,
         tmp_path,
         env,
-        pywrangler,
         startup_timeout=DEV_STARTUP_TIMEOUT,
     ) as (base_url, log_path):
         _seed(base_url, log_path)
@@ -134,11 +118,6 @@ def r2_web_server(tmp_path_factory: pytest.TempPathFactory) -> Generator[DevServ
     yield from _serve(R2_PROJECT, tmp_path_factory.mktemp("r2"))
 
 
-@pytest.fixture(scope="session", autouse=True)
-def build_testlib():
-    subprocess.run(["uv", "build"], cwd=TESTLIB, check=True)
-
-
 @pytest.fixture(
     scope="module",
     params=COMPAT_CONFIGS,
@@ -154,44 +133,26 @@ def dev_server(
 ) -> Generator[str]:
     """Serve ``tests/in_worker/worker``, once per compat config.
 
-    Unlike the app fixtures above, this one runs ``uv run --no-project`` and
-    vendors the runtime SDK and django-cf working trees by hand: the worker has
-    no Django project to build, it only needs the two libraries importable.
+    Unlike the app fixtures above, the worker's pyproject.toml depends on the
+    working-tree django-cf, runtime-sdk and testlib via ``../packages/...``
+    path sources, which the ``packages`` symlink makes resolvable, so ``sync``
+    vendors them directly.
     """
     tmp_path = tmp_path_factory.mktemp("in_worker")
     target = tmp_path / IN_WORKER_PROJECT.name
     shutil.copytree(IN_WORKER_PROJECT, target, ignore=GENERATED)
-    shutil.copytree(TESTLIB, tmp_path / "testlib", ignore=GENERATED)
+    link_packages(tmp_path)
 
     wrangler_jsonc = target / "wrangler.jsonc"
     configure_compatibility(wrangler_jsonc, compat_config)
 
-    pywrangler = [
-        "uv",
-        "run",
-        "--frozen",
-        "--no-project",
-        "--with",
-        str(WORKERS_PY),
-        "pywrangler",
-    ]
     env = os.environ | {"_PYODIDE_EXTRA_MOUNTS": str(tmp_path)}
-
-    subprocess.run([*pywrangler, "sync"], cwd=target, check=True, env=env)
-
-    shutil.copytree(WORKERS_RUNTIME_SDK, target / "python_modules", dirs_exist_ok=True)
-    shutil.copytree(
-        DJANGO_CF_SRC,
-        target / "python_modules" / "django_cf",
-        dirs_exist_ok=True,
-        ignore=shutil.ignore_patterns("__pycache__"),
-    )
+    pywrangler_sync(target, env)
 
     with run_dev_server(
         target,
         tmp_path,
         env,
-        pywrangler,
         startup_timeout=DEV_STARTUP_TIMEOUT,
     ) as (base_url, _):
         yield base_url
diff --git a/packages/django-cf/tests/in_worker/worker/pyproject.toml b/packages/django-cf/tests/in_worker/worker/pyproject.toml
index ca2edead..368cea73 100644
--- a/packages/django-cf/tests/in_worker/worker/pyproject.toml
+++ b/packages/django-cf/tests/in_worker/worker/pyproject.toml
@@ -4,11 +4,18 @@ version = "0.0.0"
 requires-python = ">=3.12"
 dependencies = [
     "django<6.1",
+    "django-cf",
     "pytest",
     "pytest-asyncio<1.2.0",
     "sqlparse",
     "testlib",
+    "workers-runtime-sdk",
 ]
 
+# `../packages` is a symlink to the monorepo's `packages/` directory that the
+# host-side `dev_server` fixture creates next to its copy of this project, so
+# the tests exercise the working-tree checkouts rather than PyPI releases.
 [tool.uv.sources]
-testlib = { path = "../testlib/dist/testlib-0.0.0-py3-none-any.whl" }
+django-cf = { path = "../packages/django-cf" }
+testlib = { path = "../packages/testlib" }
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/runtime-sdk/tests/bindings-test/pyproject.toml b/packages/runtime-sdk/tests/bindings-test/pyproject.toml
index 0db629d3..3c80a23d 100644
--- a/packages/runtime-sdk/tests/bindings-test/pyproject.toml
+++ b/packages/runtime-sdk/tests/bindings-test/pyproject.toml
@@ -13,7 +13,9 @@ dependencies = [
     "asyncpg; python_version >= '3.14'",
     "cryptography",
     "testlib",
+    "workers-runtime-sdk",
 ]
 
 [tool.uv.sources]
-testlib = { path = "../testlib/dist/testlib-0.0.0-py3-none-any.whl" }
+testlib = { path = "../packages/testlib" }
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/runtime-sdk/tests/conftest.py b/packages/runtime-sdk/tests/conftest.py
index 10ed8d9b..845af20b 100644
--- a/packages/runtime-sdk/tests/conftest.py
+++ b/packages/runtime-sdk/tests/conftest.py
@@ -2,7 +2,6 @@
 
 import os
 import shutil
-import subprocess
 from collections.abc import Generator
 from pathlib import Path
 from typing import Any
@@ -12,6 +11,8 @@
     COMPAT_CONFIGS,
     CompatConfig,
     configure_compatibility,
+    link_packages,
+    pywrangler_sync,
 )
 from testlib.host import (
     dev_server as run_dev_server,
@@ -21,9 +22,6 @@
 )
 
 TEST_DIR: Path = Path(__file__).parent
-WORKERS_PY: Path = TEST_DIR.parent.parent / "cli"
-WORKERS_RUNTIME_SDK: Path = TEST_DIR.parent / "src"
-TESTLIB: Path = TEST_DIR.parent.parent / "testlib"
 
 DEV_STARTUP_TIMEOUT: int = 120
 OPT_IN_MARKERS: tuple[str, ...] = ("hyperdrive",)
@@ -43,11 +41,6 @@ def pytest_collection_modifyitems(
                 item.add_marker(skip)
 
 
-@pytest.fixture(scope="session", autouse=True)
-def build_testlib():
-    subprocess.run(["uv", "build"], cwd=TESTLIB, check=True)
-
-
 @pytest.fixture(
     scope="module",
     params=COMPAT_CONFIGS,
@@ -74,32 +67,27 @@ def dev_server(
     worker_project_dir: Path,
     compat_config: CompatConfig,
 ) -> Generator[str]:
-    """Start a pywrangler dev server on a free port and yield its base URL."""
+    """Start a pywrangler dev server on a free port and yield its base URL.
+
+    The project is copied next to a ``packages`` symlink so that its
+    ``../packages/...`` sources resolve and ``sync`` vendors the working-tree
+    testlib and runtime-sdk.
+    """
     tmp_path = tmp_path_factory.mktemp(f"{worker_project_dir.name}_dev")
     target = tmp_path / worker_project_dir.name
     shutil.copytree(worker_project_dir, target, ignore=shutil.ignore_patterns(".venv"))
-    shutil.copytree(TESTLIB, tmp_path / "testlib")
+    link_packages(tmp_path)
     env = os.environ | {"_PYODIDE_EXTRA_MOUNTS": str(tmp_path)}
 
     wrangler_jsonc = target / "wrangler.jsonc"
     configure_compatibility(wrangler_jsonc, compat_config)
 
-    pywrangler_cmd = ["uv", "run", "--no-project", "--with", WORKERS_PY, "pywrangler"]
-
-    subprocess.run(
-        [*pywrangler_cmd, "sync"],
-        cwd=target,
-        check=True,
-        env=env,
-    )
-
-    shutil.copytree(WORKERS_RUNTIME_SDK, target / "python_modules", dirs_exist_ok=True)
+    pywrangler_sync(target, env)
 
     with run_dev_server(
         target,
         tmp_path,
         env,
-        pywrangler_cmd,
         startup_timeout=DEV_STARTUP_TIMEOUT,
         readiness_path="/health",
         require_success=True,
diff --git a/packages/runtime-sdk/tests/test_in_workerd.py b/packages/runtime-sdk/tests/test_in_workerd.py
index cbfce3b7..462d1c72 100644
--- a/packages/runtime-sdk/tests/test_in_workerd.py
+++ b/packages/runtime-sdk/tests/test_in_workerd.py
@@ -8,12 +8,12 @@
     COMPAT_CONFIGS,
     CompatConfig,
     configure_compatibility,
+    link_packages,
+    pywrangler_sync,
 )
 
 TEST_DIR = Path(__file__).parent
 WORKERD_TESTS = TEST_DIR / "workerd-test"
-WORKERS_PY = TEST_DIR.parent.parent / "cli"
-WORKERS_RUNTIME_SDK = TEST_DIR.parent / "src"
 DISK_SERVICE_NAME = "TEST_TMPDIR"
 
 
@@ -110,23 +110,14 @@ def test_in_workerd(  # noqa: PLR0913, PLR0917  (too-many-arguments)
     target = tmp_path / test_dir.name
     disk_service_dir = target / DISK_SERVICE_NAME
     shutil.copytree(test_dir, target, ignore=shutil.ignore_patterns(".venv"))
+    # Makes the project's `../packages/runtime-sdk` source resolve so `sync`
+    # vendors the working-tree SDK.
+    link_packages(tmp_path)
     disk_service_dir.mkdir(exist_ok=True)
 
     configure_compatibility(target / "wrangler.jsonc", compat_config)
 
-    pywrangler_cmd = ["uv", "run", "--no-project", "--with", WORKERS_PY, "pywrangler"]
-
-    subprocess.run(
-        [*pywrangler_cmd, "sync"],
-        cwd=target,
-        check=True,
-        env=os.environ | {"_PYODIDE_EXTRA_MOUNTS": str(tmp_path)},
-    )
-
-    # Copy runtime-sdk to the python modules as well
-    # FIXME: remove this and pass runtime-sdk as a dependency explicitly after
-    #        https://github.com/cloudflare/workers-py/pull/81 is merged
-    shutil.copytree(WORKERS_RUNTIME_SDK, target / "python_modules", dirs_exist_ok=True)
+    pywrangler_sync(target, os.environ | {"_PYODIDE_EXTRA_MOUNTS": str(tmp_path)})
 
     modules = embed(target / "python_modules", target, level=1) + embed(
         target / "tests", target, level=1
diff --git a/packages/runtime-sdk/tests/web-frameworks-test/django-async/pyproject.toml b/packages/runtime-sdk/tests/web-frameworks-test/django-async/pyproject.toml
index f6a3ecfc..6793d371 100644
--- a/packages/runtime-sdk/tests/web-frameworks-test/django-async/pyproject.toml
+++ b/packages/runtime-sdk/tests/web-frameworks-test/django-async/pyproject.toml
@@ -11,7 +11,9 @@ dependencies = [
     "pytest",
     "pytest-asyncio<1.2.0",
     "testlib",
+    "workers-runtime-sdk",
 ]
 
 [tool.uv.sources]
-testlib = { path = "../testlib/dist/testlib-0.0.0-py3-none-any.whl" }
+testlib = { path = "../packages/testlib" }
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/runtime-sdk/tests/web-frameworks-test/fastapi-tests/pyproject.toml b/packages/runtime-sdk/tests/web-frameworks-test/fastapi-tests/pyproject.toml
index 69808178..9f7548c9 100644
--- a/packages/runtime-sdk/tests/web-frameworks-test/fastapi-tests/pyproject.toml
+++ b/packages/runtime-sdk/tests/web-frameworks-test/fastapi-tests/pyproject.toml
@@ -8,7 +8,9 @@ dependencies = [
     "pytest",
     "pytest-asyncio<1.2.0",
     "testlib",
+    "workers-runtime-sdk",
 ]
 
 [tool.uv.sources]
-testlib = { path = "../testlib/dist/testlib-0.0.0-py3-none-any.whl" }
+testlib = { path = "../packages/testlib" }
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/runtime-sdk/tests/web-frameworks-test/flask-tests/pyproject.toml b/packages/runtime-sdk/tests/web-frameworks-test/flask-tests/pyproject.toml
index b3d7af83..93514e48 100644
--- a/packages/runtime-sdk/tests/web-frameworks-test/flask-tests/pyproject.toml
+++ b/packages/runtime-sdk/tests/web-frameworks-test/flask-tests/pyproject.toml
@@ -2,7 +2,8 @@
 name = "flask-tests"
 version = "0.1.0"
 requires-python = ">=3.12"
-dependencies = ["flask", "pytest", "testlib"]
+dependencies = ["flask", "pytest", "testlib", "workers-runtime-sdk"]
 
 [tool.uv.sources]
-testlib = { path = "../testlib/dist/testlib-0.0.0-py3-none-any.whl" }
+testlib = { path = "../packages/testlib" }
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/runtime-sdk/tests/workerd-test/asgi-ws-disconnect/pyproject.toml b/packages/runtime-sdk/tests/workerd-test/asgi-ws-disconnect/pyproject.toml
index f7d33188..7fcc72fb 100644
--- a/packages/runtime-sdk/tests/workerd-test/asgi-ws-disconnect/pyproject.toml
+++ b/packages/runtime-sdk/tests/workerd-test/asgi-ws-disconnect/pyproject.toml
@@ -2,4 +2,7 @@
 name = "test"
 version = "0.0.0"
 requires-python = ">=3.12"
-dependencies = ["pytest", "pytest-asyncio<1.2.0"]
+dependencies = ["pytest", "pytest-asyncio<1.2.0", "workers-runtime-sdk"]
+
+[tool.uv.sources]
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/runtime-sdk/tests/workerd-test/asgi/pyproject.toml b/packages/runtime-sdk/tests/workerd-test/asgi/pyproject.toml
index f7d33188..7fcc72fb 100644
--- a/packages/runtime-sdk/tests/workerd-test/asgi/pyproject.toml
+++ b/packages/runtime-sdk/tests/workerd-test/asgi/pyproject.toml
@@ -2,4 +2,7 @@
 name = "test"
 version = "0.0.0"
 requires-python = ">=3.12"
-dependencies = ["pytest", "pytest-asyncio<1.2.0"]
+dependencies = ["pytest", "pytest-asyncio<1.2.0", "workers-runtime-sdk"]
+
+[tool.uv.sources]
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/runtime-sdk/tests/workerd-test/durable-object-abort/pyproject.toml b/packages/runtime-sdk/tests/workerd-test/durable-object-abort/pyproject.toml
index 072f326e..704ab9e4 100644
--- a/packages/runtime-sdk/tests/workerd-test/durable-object-abort/pyproject.toml
+++ b/packages/runtime-sdk/tests/workerd-test/durable-object-abort/pyproject.toml
@@ -2,4 +2,7 @@
 name = "test"
 version = "0.0.0"
 requires-python = ">=3.12"
-dependencies = []
+dependencies = ["workers-runtime-sdk"]
+
+[tool.uv.sources]
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/runtime-sdk/tests/workerd-test/durable-object-inheritance/pyproject.toml b/packages/runtime-sdk/tests/workerd-test/durable-object-inheritance/pyproject.toml
index 072f326e..704ab9e4 100644
--- a/packages/runtime-sdk/tests/workerd-test/durable-object-inheritance/pyproject.toml
+++ b/packages/runtime-sdk/tests/workerd-test/durable-object-inheritance/pyproject.toml
@@ -2,4 +2,7 @@
 name = "test"
 version = "0.0.0"
 requires-python = ">=3.12"
-dependencies = []
+dependencies = ["workers-runtime-sdk"]
+
+[tool.uv.sources]
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/runtime-sdk/tests/workerd-test/durable-object-websocket/pyproject.toml b/packages/runtime-sdk/tests/workerd-test/durable-object-websocket/pyproject.toml
index 072f326e..704ab9e4 100644
--- a/packages/runtime-sdk/tests/workerd-test/durable-object-websocket/pyproject.toml
+++ b/packages/runtime-sdk/tests/workerd-test/durable-object-websocket/pyproject.toml
@@ -2,4 +2,7 @@
 name = "test"
 version = "0.0.0"
 requires-python = ">=3.12"
-dependencies = []
+dependencies = ["workers-runtime-sdk"]
+
+[tool.uv.sources]
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/runtime-sdk/tests/workerd-test/durable-object/pyproject.toml b/packages/runtime-sdk/tests/workerd-test/durable-object/pyproject.toml
index 072f326e..704ab9e4 100644
--- a/packages/runtime-sdk/tests/workerd-test/durable-object/pyproject.toml
+++ b/packages/runtime-sdk/tests/workerd-test/durable-object/pyproject.toml
@@ -2,4 +2,7 @@
 name = "test"
 version = "0.0.0"
 requires-python = ">=3.12"
-dependencies = []
+dependencies = ["workers-runtime-sdk"]
+
+[tool.uv.sources]
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/runtime-sdk/tests/workerd-test/entropy-patches/pyproject.toml b/packages/runtime-sdk/tests/workerd-test/entropy-patches/pyproject.toml
index ff72ddb6..087a4b9d 100644
--- a/packages/runtime-sdk/tests/workerd-test/entropy-patches/pyproject.toml
+++ b/packages/runtime-sdk/tests/workerd-test/entropy-patches/pyproject.toml
@@ -20,4 +20,8 @@ dependencies = [
     "litestar",
     "opentelemetry-api",
     "mcp; python_version >= '3.14'",
+    "workers-runtime-sdk",
 ]
+
+[tool.uv.sources]
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/runtime-sdk/tests/workerd-test/http-client/pyproject.toml b/packages/runtime-sdk/tests/workerd-test/http-client/pyproject.toml
index 33345d4c..1178cd11 100644
--- a/packages/runtime-sdk/tests/workerd-test/http-client/pyproject.toml
+++ b/packages/runtime-sdk/tests/workerd-test/http-client/pyproject.toml
@@ -2,4 +2,7 @@
 name = "http-client-compatibility-test"
 version = "0.0.0"
 requires-python = ">=3.14"
-dependencies = ["pytest"]
+dependencies = ["pytest", "workers-runtime-sdk"]
+
+[tool.uv.sources]
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/runtime-sdk/tests/workerd-test/python-rpc/pyproject.toml b/packages/runtime-sdk/tests/workerd-test/python-rpc/pyproject.toml
index 072f326e..704ab9e4 100644
--- a/packages/runtime-sdk/tests/workerd-test/python-rpc/pyproject.toml
+++ b/packages/runtime-sdk/tests/workerd-test/python-rpc/pyproject.toml
@@ -2,4 +2,7 @@
 name = "test"
 version = "0.0.0"
 requires-python = ">=3.12"
-dependencies = []
+dependencies = ["workers-runtime-sdk"]
+
+[tool.uv.sources]
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/runtime-sdk/tests/workerd-test/sdk/pyproject.toml b/packages/runtime-sdk/tests/workerd-test/sdk/pyproject.toml
index f7d33188..7fcc72fb 100644
--- a/packages/runtime-sdk/tests/workerd-test/sdk/pyproject.toml
+++ b/packages/runtime-sdk/tests/workerd-test/sdk/pyproject.toml
@@ -2,4 +2,7 @@
 name = "test"
 version = "0.0.0"
 requires-python = ">=3.12"
-dependencies = ["pytest", "pytest-asyncio<1.2.0"]
+dependencies = ["pytest", "pytest-asyncio<1.2.0", "workers-runtime-sdk"]
+
+[tool.uv.sources]
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/runtime-sdk/tests/workerd-test/wsgi/pyproject.toml b/packages/runtime-sdk/tests/workerd-test/wsgi/pyproject.toml
index f7d33188..7fcc72fb 100644
--- a/packages/runtime-sdk/tests/workerd-test/wsgi/pyproject.toml
+++ b/packages/runtime-sdk/tests/workerd-test/wsgi/pyproject.toml
@@ -2,4 +2,7 @@
 name = "test"
 version = "0.0.0"
 requires-python = ">=3.12"
-dependencies = ["pytest", "pytest-asyncio<1.2.0"]
+dependencies = ["pytest", "pytest-asyncio<1.2.0", "workers-runtime-sdk"]
+
+[tool.uv.sources]
+workers-runtime-sdk = { path = "../packages/runtime-sdk" }
diff --git a/packages/testlib/testlib/host.py b/packages/testlib/testlib/host.py
index 095c7eba..252168fe 100644
--- a/packages/testlib/testlib/host.py
+++ b/packages/testlib/testlib/host.py
@@ -19,6 +19,48 @@
 SUITE_CONNECT_TIMEOUT = 10
 SUITE_READ_TIMEOUT = 300
 
+# The monorepo's `packages/` directory.
+PACKAGES: Path = Path(__file__).parents[2]
+WORKERS_PY: Path = PACKAGES / "cli"
+PY_WRANGLER_CMD: list[str] = [
+    "uv",
+    "run",
+    "--no-project",
+    "--with",
+    str(WORKERS_PY),
+    "pywrangler",
+]
+
+
+def link_packages(tmp_path: Path) -> Path:
+    """Symlink the monorepo's ``packages/`` directory into *tmp_path*.
+
+    Worker test projects are copied to ``tmp_path/<name>`` before being synced,
+    so their ``[tool.uv.sources]`` entries refer to the working-tree checkouts
+    as ``../packages/<package>``. This makes those paths resolve, so
+    ``pywrangler sync`` builds and vendors the local testlib, runtime-sdk and
+    django-cf instead of the PyPI releases.
+    """
+    link = tmp_path / "packages"
+    link.symlink_to(PACKAGES, target_is_directory=True)
+    return link
+
+
+def pywrangler_sync(cwd: Path, env: dict[str, str]) -> None:
+    """Run ``pywrangler sync`` in *cwd*, failing the test with its output on error."""
+    result = subprocess.run(
+        [*PY_WRANGLER_CMD, "sync"],
+        cwd=cwd,
+        env=env,
+        capture_output=True,
+        text=True,
+        check=False,
+    )
+    if result.returncode != 0:
+        pytest.fail(
+            f"pywrangler sync failed in {cwd}\n{result.stdout}\n{result.stderr}"
+        )
+
 
 @dataclass(frozen=True)
 class CompatConfig:
@@ -130,7 +172,6 @@ def dev_server(
     target: Path,
     tmp_path: Path,
     env: dict[str, str],
-    pywrangler: list[str],
     *,
     startup_timeout: int,
     readiness_path: str = "",
@@ -146,7 +187,7 @@ def dev_server(
     with log_path.open("w") as log_file:
         process = subprocess.Popen(
             [
-                *pywrangler,
+                *PY_WRANGLER_CMD,
                 "dev",
                 "--port",
                 str(port),