diff --git a/.pre-commit-config.yaml b/.pre-commit-config.yaml
index 8a1d348739..3469cf6b83 100644
--- a/.pre-commit-config.yaml
+++ b/.pre-commit-config.yaml
@@ -6,9 +6,10 @@ repos:
       args: [--line-length=99, --safe]
       python_version: python3.6
 -   repo: https://github.com/asottile/seed-isort-config
-    rev: v0.1.0
+    rev: v1.0.0
     hooks:
     -   id: seed-isort-config
+        args: [--application-directories, src]
 -   repo: https://github.com/pre-commit/mirrors-isort
     rev: v4.3.4
     hooks:
diff --git a/setup.py b/setup.py
index 5839d3788f..2f4286cf39 100644
--- a/setup.py
+++ b/setup.py
@@ -1,7 +1,8 @@
 import io
 import sys
 
-import setuptools
+from setuptools import __version__ as setuptools_version
+from setuptools import find_packages, setup
 
 
 def has_environment_marker_support():
@@ -19,7 +20,7 @@ def has_environment_marker_support():
     import pkg_resources
 
     try:
-        v = pkg_resources.parse_version(setuptools.__version__)
+        v = pkg_resources.parse_version(setuptools_version)
         return v >= pkg_resources.parse_version("0.7.2")
     except Exception as e:
         sys.stderr.write("Could not test setuptool's version: {}\n".format(e))
@@ -33,7 +34,7 @@ def get_long_description():
 
 
 def main():
-    setuptools.setup(
+    setup(
         name="tox",
         description="virtualenv-based automation of test activities",
         long_description=get_long_description(),
@@ -43,7 +44,8 @@ def main():
         platforms=["unix", "linux", "osx", "cygwin", "win32"],
         author="holger krekel",
         author_email="holger@merlinux.eu",
-        packages=["tox"],
+        packages=find_packages("src"),
+        package_dir={"": "src"},
         entry_points={
             "console_scripts": ["tox=tox:cmdline", "tox-quickstart=tox._quickstart:main"]
         },
diff --git a/tox/__init__.py b/src/tox/__init__.py
similarity index 100%
rename from tox/__init__.py
rename to src/tox/__init__.py
diff --git a/tox/__main__.py b/src/tox/__main__.py
similarity index 100%
rename from tox/__main__.py
rename to src/tox/__main__.py
diff --git a/tox/_pytestplugin.py b/src/tox/_pytestplugin.py
similarity index 100%
rename from tox/_pytestplugin.py
rename to src/tox/_pytestplugin.py
diff --git a/tox/_quickstart.py b/src/tox/_quickstart.py
similarity index 100%
rename from tox/_quickstart.py
rename to src/tox/_quickstart.py
diff --git a/tox/_verlib.py b/src/tox/_verlib.py
similarity index 100%
rename from tox/_verlib.py
rename to src/tox/_verlib.py
diff --git a/tox/config.py b/src/tox/config.py
similarity index 100%
rename from tox/config.py
rename to src/tox/config.py
diff --git a/tox/constants.py b/src/tox/constants.py
similarity index 100%
rename from tox/constants.py
rename to src/tox/constants.py
diff --git a/tox/exception.py b/src/tox/exception.py
similarity index 100%
rename from tox/exception.py
rename to src/tox/exception.py
diff --git a/tox/hookspecs.py b/src/tox/hookspecs.py
similarity index 100%
rename from tox/hookspecs.py
rename to src/tox/hookspecs.py
diff --git a/tox/interpreters.py b/src/tox/interpreters.py
similarity index 100%
rename from tox/interpreters.py
rename to src/tox/interpreters.py
diff --git a/tox/result.py b/src/tox/result.py
similarity index 100%
rename from tox/result.py
rename to src/tox/result.py
diff --git a/tox/session.py b/src/tox/session.py
similarity index 100%
rename from tox/session.py
rename to src/tox/session.py
diff --git a/tox/venv.py b/src/tox/venv.py
similarity index 100%
rename from tox/venv.py
rename to src/tox/venv.py
diff --git a/tox.ini b/tox.ini
index 37effe5011..9acd122bf4 100644
--- a/tox.ini
+++ b/tox.ini
@@ -42,7 +42,7 @@ commands = pre-commit run --all-files --show-diff-on-failure
 description = combine coverage data and create reports
 deps = coverage
 skip_install = True
-changedir = {toxworkdir}
+changedir = {toxworkdir}/src
 setenv = COVERAGE_FILE=.coverage
 commands = coverage erase
            coverage combine
@@ -97,7 +97,7 @@ show_missing = True
 exclude_lines = if __name__ == ["']__main__["']:
 
 [coverage:paths]
-source = tox
+source = src/tox
          {toxworkdir}/*/lib/python*/site-packages/tox
          {toxworkdir}/*/Lib/site-packages/tox
          {toxworkdir}/pypy*/site-packages/tox