diff --git a/setup_mcp.sh b/setup_mcp.sh
index 0f91014..510ecae 100755
--- a/setup_mcp.sh
+++ b/setup_mcp.sh
@@ -35,19 +35,34 @@ echo ""
 
 # Step 3: Install dependencies
 echo "Step 3: Installing Python dependencies..."
+
+# Check if we're in a virtual environment
+if [[ -n "$VIRTUAL_ENV" ]]; then
+    echo -e "${GREEN}✓${NC} Virtual environment detected: $VIRTUAL_ENV"
+    PIP_INSTALL_CMD="pip install"
+elif [[ -d "venv" ]]; then
+    echo -e "${YELLOW}⚠${NC} Virtual environment found but not activated"
+    echo "Activating venv..."
+    source venv/bin/activate
+    PIP_INSTALL_CMD="pip install"
+else
+    echo "No virtual environment found. Using system pip with --user --break-system-packages flags"
+    PIP_INSTALL_CMD="pip3 install --user --break-system-packages"
+fi
+
 echo "This will install: mcp, requests, beautifulsoup4"
 read -p "Continue? (y/n) " -n 1 -r
 echo ""
 
 if [[ $REPLY =~ ^[Yy]$ ]]; then
     echo "Installing MCP server dependencies..."
-    pip3 install -r skill_seeker_mcp/requirements.txt || {
+    $PIP_INSTALL_CMD -r skill_seeker_mcp/requirements.txt || {
         echo -e "${RED}❌ Failed to install MCP dependencies${NC}"
         exit 1
     }
 
     echo "Installing CLI tool dependencies..."
-    pip3 install requests beautifulsoup4 || {
+    $PIP_INSTALL_CMD requests beautifulsoup4 || {
         echo -e "${RED}❌ Failed to install CLI dependencies${NC}"
         exit 1
     }
@@ -78,7 +93,7 @@ if [[ $REPLY =~ ^[Yy]$ ]]; then
     # Check if pytest is installed
     if ! command -v pytest &> /dev/null; then
         echo "Installing pytest..."
-        pip3 install pytest || {
+        $PIP_INSTALL_CMD pytest || {
             echo -e "${YELLOW}⚠${NC} Could not install pytest, skipping tests"
         }
     fi