diff --git a/.gitignore b/.gitignore
index 648d894d..fe8a0ef2 100644
--- a/.gitignore
+++ b/.gitignore
@@ -68,6 +68,9 @@ instance/
 # Scrapy stuff:
 .scrapy
 
+# Setup sentinel
+.setup-complete
+
 # Sphinx documentation
 docs/_build/
 
diff --git a/Makefile b/Makefile
index 6c3a63e3..8c4a43aa 100644
--- a/Makefile
+++ b/Makefile
@@ -1,12 +1,10 @@
 .PHONY: setup run deploy stop install uninstall build install-pre-commit
 
-# Check if conda is available
-ifeq (, $(shell which conda))
-  $(error "Conda is not found in PATH. Please install Conda or add it to your PATH.")
-endif
+SETUP_SENTINEL := .setup-complete
 
-# Setup - create .env file
-setup:
+setup: $(SETUP_SENTINEL)
+
+$(SETUP_SENTINEL):
 	chmod +x setup.sh
 	./setup.sh
 
@@ -16,7 +14,7 @@ run:
 	conda run --no-capture-output -n hummingbot-api uvicorn main:app --reload
 
 # Deploy with Docker
-deploy:
+deploy: $(SETUP_SENTINEL)
 	docker compose up -d
 
 # Stop all services
@@ -25,16 +23,21 @@ stop:
 
 # Install conda environment
 install:
+	@if ! command -v conda >/dev/null 2>&1; then \
+		echo "Error: Conda is not found in PATH. Please install Conda or add it to your PATH."; \
+		exit 1; \
+	fi
 	@if conda env list | grep -q '^hummingbot-api '; then \
-	    echo "Environment already exists."; \
+		echo "Environment already exists."; \
 	else \
-	    conda env create -f environment.yml; \
+		conda env create -f environment.yml; \
 	fi
 	$(MAKE) install-pre-commit
 	$(MAKE) setup
 
 uninstall:
 	conda env remove -n hummingbot-api -y
+	rm -f $(SETUP_SENTINEL)
 
 install-pre-commit:
 	conda run -n hummingbot-api pip install pre-commit
@@ -42,4 +45,4 @@ install-pre-commit:
 
 # Build Docker image
 build:
-	docker build -t hummingbot/hummingbot-api:latest .
+	docker build -t hummingbot/hummingbot-api:latest .
\ No newline at end of file
diff --git a/setup.sh b/setup.sh
index 51cd2c44..296289e4 100755
--- a/setup.sh
+++ b/setup.sh
@@ -1,19 +1,219 @@
 #!/bin/bash
-# Hummingbot API Setup - Creates .env with sensible defaults
+# Hummingbot API Setup - Creates .env with sensible defaults (Mac/Linux/WSL2)
+# - On Linux (apt-based): installs build deps (gcc, build-essential)
+# - Ensures Docker + Docker Compose are available (auto-installs on Linux via get.docker.com)
 
-set -e
+set -euo pipefail
+
+echo "Hummingbot API Setup"
+echo ""
+
+has_cmd() { command -v "$1" >/dev/null 2>&1; }
+
+resolve_script_dir() {
+  local src="${BASH_SOURCE[0]}"
+  while [ -h "$src" ]; do
+    local dir
+    dir="$(cd -P "$(dirname "$src")" >/dev/null 2>&1 && pwd)"
+    src="$(readlink "$src")"
+    [[ "$src" != /* ]] && src="$dir/$src"
+  done
+  cd -P "$(dirname "$src")" >/dev/null 2>&1 && pwd
+}
+
+SCRIPT_DIR="$(resolve_script_dir)"
+
+# Log file defaults to the script folder (fallback to /tmp if not writable)
+LOG_FILE="${LOG_FILE:-${SCRIPT_DIR}/hummingbot-api-setup.log}"
+if ! ( : >>"$LOG_FILE" ) 2>/dev/null; then
+  LOG_FILE="/tmp/hummingbot-api-setup.log"
+fi
+
+run_quiet() {
+  # Usage: run_quiet <command...>
+  # Writes detailed output to LOG_FILE, but keeps terminal clean
+  "$@" >>"$LOG_FILE" 2>&1
+}
+
+# --------------------------
+# OS / Environment Detection
+# --------------------------
+OS="$(uname -s || true)"
+ARCH="$(uname -m || true)"
+
+is_linux() { [[ "${OS}" == "Linux" ]]; }
+is_macos() { [[ "${OS}" == "Darwin" ]]; }
+
+docker_ok() { has_cmd docker; }
+
+docker_compose_ok() {
+  if has_cmd docker && docker compose version >/dev/null 2>&1; then
+    return 0
+  fi
+  if has_cmd docker-compose && docker-compose version >/dev/null 2>&1; then
+    return 0
+  fi
+  return 1
+}
+
+need_sudo_or_die() {
+  if ! has_cmd sudo; then
+    echo "ERROR: 'sudo' is required for dependency installation on this system."
+    echo "Please install sudo (or run as root) and re-run this script."
+    exit 1
+  fi
+}
+
+# --------------------------
+# Linux Dependencies
+# --------------------------
+install_linux_build_deps() {
+  if has_cmd apt-get; then
+    need_sudo_or_die
+    echo "[INFO] Detected Linux. Installing build dependencies (gcc, build-essential)... (logging to $LOG_FILE)"
+
+    run_quiet sudo env DEBIAN_FRONTEND=noninteractive apt-get update -qq
+    run_quiet sudo env DEBIAN_FRONTEND=noninteractive apt-get upgrade -y -qq
+    run_quiet sudo env DEBIAN_FRONTEND=noninteractive apt-get install -y -qq gcc build-essential
+
+    echo "[OK] Build dependencies checked/installed."
+  else
+    echo "[WARN] Detected Linux, but 'apt-get' is not available. Skipping build dependency install."
+  fi
+}
+
+ensure_curl_on_linux() {
+  if has_cmd curl; then
+    return 0
+  fi
+
+  if has_cmd apt-get; then
+    need_sudo_or_die
+    echo "[INFO] Installing curl (required for Docker install script)... (logging to $LOG_FILE)"
+    run_quiet sudo env DEBIAN_FRONTEND=noninteractive apt-get update -qq
+    run_quiet sudo env DEBIAN_FRONTEND=noninteractive apt-get install -y -qq curl ca-certificates
+    echo "[OK] curl installed."
+    return 0
+  fi
+
+  echo "[WARN] curl is not installed and apt-get is unavailable. Please install curl and re-run."
+  return 1
+}
+
+# --------------------------
+# Docker Install / Validation
+# --------------------------
+install_docker_linux() {
+  need_sudo_or_die
+  ensure_curl_on_linux
+
+  echo "[INFO] Docker not found. Installing Docker using get.docker.com script... (logging to $LOG_FILE)"
+  run_quiet curl -fsSL https://get.docker.com -o get-docker.sh
+  run_quiet sudo sh get-docker.sh
+  run_quiet rm -f get-docker.sh
+
+  if has_cmd systemctl; then
+    if systemctl is-system-running >/dev/null 2>&1; then
+      echo "[INFO] Enabling and starting Docker service..."
+      sudo systemctl enable docker >/dev/null 2>&1 || true
+      sudo systemctl start docker >/dev/null 2>&1 || true
+    fi
+  fi
+
+  if has_cmd getent && getent group docker >/dev/null 2>&1; then
+    if [[ "${EUID}" -ne 0 ]]; then
+      echo "[INFO] Adding current user to 'docker' group (may require re-login)..."
+      sudo usermod -aG docker "$USER" >/dev/null 2>&1 || true
+    fi
+  fi
+}
+
+ensure_docker_and_compose() {
+  if is_linux; then
+    if ! docker_ok; then
+      install_docker_linux
+    fi
+
+    if ! docker_ok; then
+      echo "ERROR: Docker installation did not succeed or 'docker' is still not on PATH."
+      echo "       Try opening a new shell and re-running, or verify Docker installation."
+      exit 1
+    fi
+
+    if ! docker_compose_ok; then
+      if has_cmd apt-get; then
+        need_sudo_or_die
+        echo "[INFO] Docker Compose not found. Attempting to install docker-compose-plugin... (logging to $LOG_FILE)"
+        run_quiet sudo env DEBIAN_FRONTEND=noninteractive apt-get update -qq
+        run_quiet sudo env DEBIAN_FRONTEND=noninteractive apt-get install -y -qq docker-compose-plugin || true
+      fi
+    fi
+
+    if ! docker_compose_ok; then
+      echo "ERROR: Docker Compose is not available."
+      echo "       Expected either 'docker compose' (v2) or 'docker-compose' (v1)."
+      echo "       On Ubuntu/Debian, try: sudo apt-get install -y docker-compose-plugin"
+      exit 1
+    fi
+  elif is_macos; then
+    if ! docker_ok || ! docker_compose_ok; then
+      echo "ERROR: Docker and/or Docker Compose not found on macOS."
+      echo "       Install Docker Desktop for Mac (Apple Silicon or Intel) and re-run this script."
+      echo "       After installation, ensure 'docker' works in this terminal (you may need a new shell)."
+      exit 1
+    fi
+  else
+    echo "[WARN] Unsupported/unknown OS '${OS}'. Proceeding without installing OS-level dependencies."
+    if ! docker_ok || ! docker_compose_ok; then
+      echo "ERROR: Docker and/or Docker Compose not found."
+      exit 1
+    fi
+  fi
+
+  echo "[OK] Docker detected: $(docker --version 2>/dev/null || true)"
+  if docker compose version >/dev/null 2>&1; then
+    echo "[OK] Docker Compose detected: $(docker compose version 2>/dev/null || true)"
+  else
+    echo "[OK] Docker Compose detected: $(docker-compose version 2>/dev/null || true)"
+  fi
+}
+
+# --------------------------
+# Pre-flight (deps + docker)
+# --------------------------
+echo "[INFO] OS=${OS} ARCH=${ARCH}"
+if is_linux; then
+  install_linux_build_deps
+fi
+
+ensure_docker_and_compose
+echo ""
+
+# --------------------------
+# Existing .env creation flow
+# --------------------------
+if [ -f ".env" ]; then
+  echo ".env file already exists. Skipping setup."
+  echo ""
+  exit 0
+fi
+
+# Clear screen before prompting user
+if has_cmd clear; then
+  clear
+else
+  printf "\033c"
+fi
 
 echo "Hummingbot API Setup"
 echo ""
 
-# Only prompt for password (most common customization)
 read -p "API password [default: admin]: " PASSWORD
 PASSWORD=${PASSWORD:-admin}
 
 read -p "Config password [default: admin]: " CONFIG_PASSWORD
 CONFIG_PASSWORD=${CONFIG_PASSWORD:-admin}
 
-# Create .env with sensible defaults
 cat > .env << EOF
 # Hummingbot API Configuration
 USERNAME=admin
@@ -38,10 +238,17 @@ GATEWAY_PASSPHRASE=admin
 BOTS_PATH=$(pwd)
 EOF
 
+touch .setup-complete
+
 echo ""
 echo ".env created successfully!"
 echo ""
 echo "Next steps:"
-echo "  make deploy    # Start all services"
-echo "  make run       # Run API locally (dev mode)"
+echo ""
+echo "Option 1: Start all services with Docker (recommended)"
+echo "  make deploy"
+echo ""
+echo "Option 2: Run API locally (dev mode)"
+echo "  make install   # Creates the conda environment - Note: Please install the latest Anaconda version manually"
+echo "  make run       # Run API"
 echo ""