diff --git a/MANIFEST.in b/MANIFEST.in
index 8e6b6386b61fd..e8e949f97f261 100644
--- a/MANIFEST.in
+++ b/MANIFEST.in
@@ -1,3 +1,2 @@
-recursive-include lib-typing *.py
 recursive-include scripts *
 recursive-exclude scripts myunit
diff --git a/build-requirements.txt b/build-requirements.txt
new file mode 100644
index 0000000000000..0a8547bcc8ef9
--- /dev/null
+++ b/build-requirements.txt
@@ -0,0 +1,2 @@
+setuptools
+wheel
diff --git a/setup.py b/setup.py
index 3733f72800c62..66d2aa4473ce8 100644
--- a/setup.py
+++ b/setup.py
@@ -9,8 +9,8 @@
     sys.stderr.write("ERROR: You need Python 3.2 or later to use mypy.\n")
     exit(1)
 
-from distutils.core import setup
-from distutils.command.build_py import build_py
+from setuptools import setup
+from setuptools.command.build_py import build_py
 from mypy.version import __version__
 from mypy import git
 
@@ -94,17 +94,22 @@ def run(self):
     'Programming Language :: Python :: 3.3',
     'Programming Language :: Python :: 3.4',
     'Programming Language :: Python :: 3.5',
+    'Programming Language :: Python :: 3.6',
     'Topic :: Software Development',
 ]
 
 package_dir = {'mypy': 'mypy'}
-if sys.version_info < (3, 5, 0):
-    package_dir[''] = 'lib-typing/3.2'
 
 scripts = ['scripts/mypy', 'scripts/stubgen']
 if os.name == 'nt':
     scripts.append('scripts/mypy.bat')
 
+install_requires = []
+if sys.platform != 'win32':
+    install_requires.append('typed-ast >= 0.6.1')
+if sys.version_info < (3, 5):
+    install_requires.append('typing >= 3.5.2')
+
 setup(name='mypy-lang',
       version=version,
       description=description,
@@ -115,10 +120,11 @@ def run(self):
       license='MIT License',
       platforms=['POSIX'],
       package_dir=package_dir,
-      py_modules=['typing'] if sys.version_info < (3, 5, 0) else [],
+      py_modules=[],
       packages=['mypy'],
       scripts=scripts,
       data_files=data_files,
       classifiers=classifiers,
       cmdclass={'build_py': CustomPythonBuild},
+      install_requires=install_requires,
       )
diff --git a/test-data/unit/pythoneval.test b/test-data/unit/pythoneval.test
index df6ef8cccba07..dda1d517c02f0 100644
--- a/test-data/unit/pythoneval.test
+++ b/test-data/unit/pythoneval.test
@@ -11,7 +11,8 @@ print('hello, world')
 [out]
 hello, world
 
-[case testAbstractBaseClasses]
+-- Skipped because different typing package versions have different repr()s. 
+[case testAbstractBaseClasses-skip]
 import re
 from typing import Sized, Sequence, Iterator, Iterable, Mapping, AbstractSet
 
diff --git a/typeshed b/typeshed
index 3ea39a7c1b78f..d60bea14f65ce 160000
--- a/typeshed
+++ b/typeshed
@@ -1 +1 @@
-Subproject commit 3ea39a7c1b78f59df0ea1469ead4f42050d8ad38
+Subproject commit d60bea14f65ce51babdb8def77551c6be3c657c2