diff --git a/pw_protobuf_compiler/BUILD.gn b/pw_protobuf_compiler/BUILD.gn
index 58dce83..0d678a0 100644
--- a/pw_protobuf_compiler/BUILD.gn
+++ b/pw_protobuf_compiler/BUILD.gn
@@ -14,7 +14,7 @@
 
 import("//build_overrides/pigweed.gni")
 
-import("$dir_pw_build/input_group.gni")
+import("$dir_pw_build/python.gni")
 import("$dir_pw_docgen/docs.gni")
 import("$dir_pw_protobuf_compiler/proto.gni")
 import("$dir_pw_unit_test/test.gni")
@@ -34,5 +34,17 @@
 }
 
 pw_proto_library("nanopb_test_protos") {
-  sources = [ "pw_protobuf_compiler_protos/nanopb_test.proto" ]
+  sources = [ "pw_protobuf_compiler_nanopb_protos/nanopb_test.proto" ]
+}
+
+pw_proto_library("test_protos") {
+  sources = [
+    "pw_protobuf_compiler_protos/nested/more_nesting/test.proto",
+    "pw_protobuf_compiler_protos/test.proto",
+  ]
+}
+
+# PyPI Requirements needed to install Python protobuf packages.
+pw_python_requirements("protobuf_requirements") {
+  requirements = [ "mypy-protobuf" ]
 }
diff --git a/pw_protobuf_compiler/nanopb_test.cc b/pw_protobuf_compiler/nanopb_test.cc
index 4df3520..e916b49 100644
--- a/pw_protobuf_compiler/nanopb_test.cc
+++ b/pw_protobuf_compiler/nanopb_test.cc
@@ -13,7 +13,7 @@
 // the License.
 
 #include "gtest/gtest.h"
-#include "pw_protobuf_compiler_protos/nanopb_test.pb.h"
+#include "pw_protobuf_compiler_nanopb_protos/nanopb_test.pb.h"
 
 TEST(Nanopb, CompilesProtobufs) {
   pw_protobuf_compiler_Point point = {4, 8, "point"};
diff --git a/pw_protobuf_compiler/proto.gni b/pw_protobuf_compiler/proto.gni
index 94d0c6c..03ff3c4 100644
--- a/pw_protobuf_compiler/proto.gni
+++ b/pw_protobuf_compiler/proto.gni
@@ -254,9 +254,11 @@
     forward_variables_from(invoker, "*", _forwarded_vars)
     language = "python"
     output_extensions = [ "_pb2.py" ]
+    deps += [ "$dir_pw_protobuf_compiler:protobuf_requirements.install" ]
   }
 
   _setup_py = "${invoker.gen_dir}/setup.py"
+  _generated_files = get_target_outputs(":$target_name._gen")
 
   # Create the setup and init files for the Python package.
   pw_python_action(target_name + "._package_gen") {
@@ -266,7 +268,8 @@
              rebase_path(_setup_py),
              "--package",
              _package_dir,
-           ] + rebase_path(get_path_info(invoker.sources, "dir"), ".")
+           ] + rebase_path(_generated_files, invoker.gen_dir)
+
     public_deps = [ ":$_target._gen" ]
     stamp = true
   }
diff --git a/pw_protobuf_compiler/pw_protobuf_compiler_protos/nanopb_test.proto b/pw_protobuf_compiler/pw_protobuf_compiler_nanopb_protos/nanopb_test.proto
similarity index 100%
rename from pw_protobuf_compiler/pw_protobuf_compiler_protos/nanopb_test.proto
rename to pw_protobuf_compiler/pw_protobuf_compiler_nanopb_protos/nanopb_test.proto
diff --git a/pw_protobuf_compiler/pw_protobuf_compiler_protos/nested/more_nesting/test.proto b/pw_protobuf_compiler/pw_protobuf_compiler_protos/nested/more_nesting/test.proto
new file mode 100644
index 0000000..6bb1417
--- /dev/null
+++ b/pw_protobuf_compiler/pw_protobuf_compiler_protos/nested/more_nesting/test.proto
@@ -0,0 +1,21 @@
+// Copyright 2020 The Pigweed Authors
+//
+// Licensed under the Apache License, Version 2.0 (the "License"); you may not
+// use this file except in compliance with the License. You may obtain a copy of
+// the License at
+//
+//     https://www.apache.org/licenses/LICENSE-2.0
+//
+// Unless required by applicable law or agreed to in writing, software
+// distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
+// WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
+// License for the specific language governing permissions and limitations under
+// the License.
+
+syntax = "proto3";
+
+package pw.protobuf_compiler.test;
+
+message Message {
+  int32 field = 1;
+}
diff --git a/pw_protobuf_compiler/pw_protobuf_compiler_protos/test.proto b/pw_protobuf_compiler/pw_protobuf_compiler_protos/test.proto
new file mode 100644
index 0000000..27bf6b4
--- /dev/null
+++ b/pw_protobuf_compiler/pw_protobuf_compiler_protos/test.proto
@@ -0,0 +1,22 @@
+// Copyright 2020 The Pigweed Authors
+//
+// Licensed under the Apache License, Version 2.0 (the "License"); you may not
+// use this file except in compliance with the License. You may obtain a copy of
+// the License at
+//
+//     https://www.apache.org/licenses/LICENSE-2.0
+//
+// Unless required by applicable law or agreed to in writing, software
+// distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
+// WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
+// License for the specific language governing permissions and limitations under
+// the License.
+
+syntax = "proto3";
+
+package pw.protobuf_compiler.test;
+
+enum Enum {
+  FOO = 0;
+  BAR = 1;
+}
diff --git a/pw_protobuf_compiler/py/BUILD.gn b/pw_protobuf_compiler/py/BUILD.gn
index 9c4187d..f2231e0 100644
--- a/pw_protobuf_compiler/py/BUILD.gn
+++ b/pw_protobuf_compiler/py/BUILD.gn
@@ -25,7 +25,11 @@
     "pw_protobuf_compiler/proto_target_invalid.py",
     "pw_protobuf_compiler/python_protos.py",
   ]
-  tests = [ "python_protos_test.py" ]
+  tests = [
+    "compiled_protos_test.py",
+    "python_protos_test.py",
+  ]
   python_deps = [ "$dir_pw_cli/py" ]
+  python_test_deps = [ "..:test_protos.python" ]
   pylintrc = "$dir_pigweed/.pylintrc"
 }
diff --git a/pw_protobuf_compiler/py/compiled_protos_test.py b/pw_protobuf_compiler/py/compiled_protos_test.py
new file mode 100755
index 0000000..88f8e62
--- /dev/null
+++ b/pw_protobuf_compiler/py/compiled_protos_test.py
@@ -0,0 +1,32 @@
+#!/usr/bin/env python3
+# Copyright 2020 The Pigweed Authors
+#
+# Licensed under the Apache License, Version 2.0 (the "License"); you may not
+# use this file except in compliance with the License. You may obtain a copy of
+# the License at
+#
+#     https://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
+# WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
+# License for the specific language governing permissions and limitations under
+# the License.
+"""Tests compiling and importing Python protos on the fly."""
+
+import unittest
+
+from pw_protobuf_compiler_protos import test_pb2 as top_level
+from pw_protobuf_compiler_protos.nested.more_nesting import test_pb2
+
+
+class TestCompileAndImport(unittest.TestCase):
+    def test_access_compiled_protobufs(self):
+        self.assertNotEqual(top_level.FOO, top_level.BAR)
+
+        message = test_pb2.Message(field=123)
+        self.assertEqual(message.field, 123)
+
+
+if __name__ == '__main__':
+    unittest.main()
diff --git a/pw_protobuf_compiler/py/pw_protobuf_compiler/generate_protos.py b/pw_protobuf_compiler/py/pw_protobuf_compiler/generate_protos.py
index 5c07d2c..7bfd76b 100644
--- a/pw_protobuf_compiler/py/pw_protobuf_compiler/generate_protos.py
+++ b/pw_protobuf_compiler/py/pw_protobuf_compiler/generate_protos.py
@@ -113,7 +113,7 @@
 
 
 def protoc_python_args(args: argparse.Namespace) -> List[str]:
-    return ['--python_out', args.out_dir]
+    return ['--python_out', args.out_dir, '--mypy_out', args.out_dir]
 
 
 # Default additional protoc arguments for each supported language.
diff --git a/pw_protobuf_compiler/py/pw_protobuf_compiler/generate_python_package.py b/pw_protobuf_compiler/py/pw_protobuf_compiler/generate_python_package.py
index b3e1b12..4c3e865 100644
--- a/pw_protobuf_compiler/py/pw_protobuf_compiler/generate_python_package.py
+++ b/pw_protobuf_compiler/py/pw_protobuf_compiler/generate_python_package.py
@@ -14,9 +14,10 @@
 """Generates a setup.py and __init__.py for a Python package."""
 
 import argparse
+from collections import defaultdict
 from pathlib import Path
 import sys
-from typing import List
+from typing import Dict, List, Set
 
 # Make sure dependencies are optional, since this script may be run when
 # installing Python package dependencies through GN.
@@ -29,13 +30,16 @@
 import setuptools
 
 setuptools.setup(
-    name='<PACKAGE_NAME>',
+    name={name!r},
     version='0.0.1',
     author='Pigweed Authors',
     author_email='pigweed-developers@googlegroups.com',
     description='Generated protobuf files',
-    packages=setuptools.find_packages(),
+    packages={packages!r},
+    package_data={package_data!r},
+    include_package_data=True,
     zip_safe=False,
+    install_requires=['protobuf'],
 )
 """
 
@@ -50,23 +54,47 @@
                         required=True,
                         type=Path,
                         help='Path to setup.py file')
-    parser.add_argument('subpackages',
+    parser.add_argument('sources',
                         type=Path,
                         nargs='+',
-                        help='Subpackage paths within the package')
-
+                        help='Relative paths to sources in the package')
     return parser.parse_args()
 
 
-def main(package: str, setup: Path, subpackages: List[Path]) -> int:
-    setup.parent.mkdir(exist_ok=True)
+def main(package: str, setup: Path, sources: List[Path]) -> int:
+    """Generates __init__.py and py.typed files and a setup.py."""
+    base = setup.parent.resolve()
+    base.mkdir(exist_ok=True)
 
-    for subpackage in set(subpackages):
-        package_dir = setup.parent / subpackage
-        package_dir.mkdir(exist_ok=True, parents=True)
-        package_dir.joinpath('__init__.py').touch()
+    # Find all directories in the package, including empty ones.
+    subpackages: Set[Path] = set()
+    for source in sources:
+        subpackages.update(base / path for path in source.parents)
+    subpackages.remove(base)
 
-    setup.write_text(_SETUP_TEMPLATE.replace('<PACKAGE_NAME>', package))
+    pkg_data: Dict[str, List[str]] = defaultdict(list)
+
+    # Create __init__.py and py.typed files for each subdirectory.
+    for pkg in subpackages:
+        pkg.mkdir(exist_ok=True, parents=True)
+        pkg.joinpath('__init__.py').touch()
+
+        package_name = '.'.join(pkg.relative_to(base).as_posix().split('/'))
+        pkg.joinpath('py.typed').touch()
+        pkg_data[package_name].append('py.typed')
+
+    # Add the .pyi for each source file.
+    for source in sources:
+        pkg = base / source.parent
+        package_name = '.'.join(pkg.relative_to(base).as_posix().split('/'))
+
+        path = base.joinpath(source).relative_to(pkg).with_suffix('.pyi')
+        pkg_data[package_name].append(str(path))
+
+    setup.write_text(
+        _SETUP_TEMPLATE.format(name=package,
+                               packages=list(pkg_data),
+                               package_data=dict(pkg_data)))
     return 0
 
 
diff --git a/pw_protobuf_compiler/py/setup.py b/pw_protobuf_compiler/py/setup.py
index 189992f..b0d8657 100644
--- a/pw_protobuf_compiler/py/setup.py
+++ b/pw_protobuf_compiler/py/setup.py
@@ -24,11 +24,8 @@
     packages=setuptools.find_packages(),
     package_data={'pw_protobuf_compiler': ['py.typed']},
     zip_safe=False,
-    entry_points={
-        'console_scripts':
-        ['generate_protos = pw_protobuf_compiler.generate_protos:main']
-    },
     install_requires=[
+        'mypy-protobuf',
         'protobuf',
         'pw_cli',
     ],
diff --git a/pw_unit_test/py/pw_unit_test/rpc.py b/pw_unit_test/py/pw_unit_test/rpc.py
index 1d1cb5f..c2ec22b 100644
--- a/pw_unit_test/py/pw_unit_test/rpc.py
+++ b/pw_unit_test/py/pw_unit_test/rpc.py
@@ -18,9 +18,8 @@
 import logging
 from typing import Iterable
 
-from pw_unit_test_proto import unit_test_pb2  # type: ignore
-
 import pw_rpc.client
+from pw_unit_test_proto import unit_test_pb2
 
 _LOG = logging.getLogger(__name__)
 
@@ -66,8 +65,7 @@
         """Called when a new test case is started."""
 
     @abc.abstractmethod
-    def test_case_end(self, test_case: TestCase,
-                      result: unit_test_pb2.TestCaseResult):
+    def test_case_end(self, test_case: TestCase, result: int):
         """Called when a test case completes with its overall result."""
 
     @abc.abstractmethod
@@ -94,8 +92,7 @@
     def test_case_start(self, test_case: TestCase):
         _LOG.info('[ RUN      ] %s', test_case)
 
-    def test_case_end(self, test_case: TestCase,
-                      result: unit_test_pb2.TestCaseResult):
+    def test_case_end(self, test_case: TestCase, result: int):
         if result == unit_test_pb2.TestCaseResult.SUCCESS:
             _LOG.info('[       OK ] %s', test_case)
         else:
diff --git a/pw_unit_test/py/setup.py b/pw_unit_test/py/setup.py
index 0a7db0b..7ae8df1 100644
--- a/pw_unit_test/py/setup.py
+++ b/pw_unit_test/py/setup.py
@@ -27,5 +27,6 @@
     install_requires=[
         'pw_cli',
         'pw_rpc',
+        'pw_unit_test_proto',
     ],
 )