diff --git a/python/paddle/utils/cpp_extension/cpp_extension.py b/python/paddle/utils/cpp_extension/cpp_extension.py
index d230c4875ad150..844b56003fc145 100644
--- a/python/paddle/utils/cpp_extension/cpp_extension.py
+++ b/python/paddle/utils/cpp_extension/cpp_extension.py
@@ -25,9 +25,13 @@
 import setuptools
 import sys
 import paddle
+import site
+
 from setuptools.command.easy_install import easy_install
 from setuptools.command.build_ext import build_ext
 from distutils.command.build import build
+from setuptools.command.install import install
+
 
 from .extension_utils import (
     add_compile_flag,
@@ -55,9 +59,9 @@
 )
 from .extension_utils import _reset_so_rpath, clean_object_if_change_cflags
 from .extension_utils import (
-    bootstrap_context,
     get_build_directory,
     add_std_without_repeat,
+    custom_write_stub,
 )
 
 from .extension_utils import (
@@ -235,6 +239,11 @@ def setup(**attr: Any) -> None:
     assert 'easy_install' not in cmdclass
     cmdclass['easy_install'] = EasyInstallCommand
 
+    # Compatible with wheel installation via `pip install .`
+    # Note: This is rarely used with modern pip, which uses bdist_wheel instead
+    assert 'install' not in cmdclass
+    cmdclass['install'] = InstallCommand
+
     # Note(Aurelius84): Add rename build_base directory hook in build command.
     # To avoid using same build directory that will lead to remove the directory
     # by mistake while parallelling execute setup.py, for example on CI.
@@ -246,9 +255,7 @@ def setup(**attr: Any) -> None:
     # See http://peak.telecommunity.com/DevCenter/setuptools#setting-the-zip-safe-flag
     attr['zip_safe'] = False
 
-    # switch `write_stub` to inject paddle api in .egg
-    with bootstrap_context():
-        setuptools.setup(**attr)
+    setuptools.setup(**attr)
 
 
 def CppExtension(
@@ -849,8 +856,43 @@ def _clean_intermediate_files(self):
                         os.remove(os.path.join(root, file))
                         print(f"Removed: {os.path.join(root, file)}")
 
+    def _generate_python_api_file(self) -> None:
+        """
+        Generate the top-level python api file (package stub) alongside the
+        built shared library in build_lib. This replaces the legacy bdist_egg
+        write_stub mechanism that is no longer triggered in setuptools >= 80.
+        """
+        try:
+            outputs = self.get_outputs()
+            if not outputs:
+                return
+            # We only support a single extension per setup()
+            so_path = os.path.abspath(outputs[0])
+            so_name = os.path.basename(so_path)
+            build_dir = os.path.dirname(so_path)
+
+            # Get the extension name from the extension module, not the distribution name
+            # This ensures we use the correct package name from setup.py
+            ext_name = self.extensions[0].name
+
+            # Extract the last part of the extension name for the Python file
+            # For example, from "custom_setup_ops.my_ops.custom_relu" we get "custom_relu"
+            lib_name = ext_name.split('.')[-1] if '.' in ext_name else ext_name
+
+            pyfile = os.path.join(build_dir, f"{lib_name}.py")
+            # Write stub; it will reference the _pd_ renamed resource at import time
+            custom_write_stub(so_name, pyfile)
+        except Exception as e:
+            raise RuntimeError(
+                f"Failed to generate python api file: {e}"
+            ) from e
+
     def run(self):
         super().run()
+
+        # Compatible with wheel installation via `pip install .`
+        self._generate_python_api_file()
+
         self._clean_intermediate_files()
 
 
@@ -926,6 +968,222 @@ def initialize_options(self) -> None:
             self.build_base = self._specified_build_base
 
 
+class InstallCommand(install):
+    """
+    Extend install Command to:
+      1) choose an install dir that is actually importable (on sys.path)
+      2) ensure a single top-level entry for the package in site/dist-packages so
+         legacy tests that expect a sole artifact (egg/package) keep working
+      3) rename the compiled library to *_pd_.so to avoid shadowing the python stub
+    """
+
+    def _get_extension_name(self) -> str:
+        """
+        Get the extension name from the extension module, not the distribution name.
+        This ensures we use the correct package name from setup.py.
+
+        Note: This assumes there is only one extension module (len(ext_modules) == 1).
+
+        Returns:
+            str: The extension name
+        """
+        return self.distribution.ext_modules[0].name
+
+    def finalize_options(self) -> None:
+        super().finalize_options()
+
+        install_dir = (
+            getattr(self, 'install_lib', None)
+            or getattr(self, 'install_purelib', None)
+            or getattr(self, 'install_platlib', None)
+        )
+        if not install_dir or not os.path.isdir(install_dir):
+            return
+
+        # Get the extension name
+        ext_name = self._get_extension_name()
+
+        # Extract the first part of the extension name for the shared library
+        # For example, from "custom_setup_ops.my_ops.custom_relu" we get "custom_setup_ops"
+        pkg_name = ext_name.split('.')[0] if '.' in ext_name else ext_name
+
+        # Check if dist-info exists
+        has_dist_info = any(
+            name.endswith('.dist-info') and name.startswith(pkg_name)
+            for name in os.listdir(install_dir)
+        )
+        # If dist-info exists, we are installing a wheel, so we are done
+        if has_dist_info:
+            return
+
+        # Build candidate site dirs: global + user + entries already on sys.path
+        candidates = []
+        candidates.extend(site.getsitepackages())
+        usp = site.getusersitepackages()
+        if usp:
+            candidates.append(usp)
+        for sp in sys.path:
+            if isinstance(sp, str) and sp.endswith(
+                ('site-packages', 'dist-packages')
+            ):
+                candidates.append(sp)
+        # De-dup while preserving order
+        seen = set()
+        ordered = []
+        for c in candidates:
+            if c and c not in seen:
+                seen.add(c)
+                ordered.append(c)
+        # Prefer a candidate that is actually on sys.path
+        target = None
+        for c in ordered:
+            if c in sys.path and os.path.isdir(c):
+                target = c
+                break
+        # Fallback: pick the first existing candidate
+        if target is None:
+            for c in ordered:
+                if os.path.isdir(c):
+                    target = c
+                    break
+        if target:
+            option_dict = self.distribution.get_option_dict('install')
+
+            if 'install_lib' not in option_dict:
+                self.install_lib = target
+
+            if 'install_purelib' not in option_dict:
+                self.install_purelib = target
+
+            if 'install_platlib' not in option_dict:
+                self.install_platlib = target
+
+    def run(self, *args: Any, **kwargs: Any) -> None:
+        super().run(*args, **kwargs)
+
+        install_dir = (
+            getattr(self, 'install_lib', None)
+            or getattr(self, 'install_purelib', None)
+            or getattr(self, 'install_platlib', None)
+        )
+        if not install_dir or not os.path.isdir(install_dir):
+            return
+
+        # Get the extension name
+        ext_name = self._get_extension_name()
+
+        # Extract the first part of the extension name for the shared library
+        # For example, from "custom_setup_ops.my_ops.custom_relu" we get "custom_setup_ops"
+        pkg_name = ext_name.split('.')[0] if '.' in ext_name else ext_name
+
+        # Check if dist-info exists
+        has_egg_info = any(
+            name.endswith('.egg-info') and name.startswith(pkg_name)
+            for name in os.listdir(install_dir)
+        )
+        # If egg-info exists, we are installing a source distribution, we need to
+        # reorganize the files
+        if has_egg_info:
+            # First rename the shared library if present at top-level
+            self._rename_shared_library()
+            # Then canonicalize layout to a single top-level entry for this package
+            self._single_entry_layout()
+
+    def _rename_shared_library(self) -> None:
+        install_dir = (
+            getattr(self, 'install_lib', None)
+            or getattr(self, 'install_purelib', None)
+            or getattr(self, 'install_platlib', None)
+        )
+        if not install_dir or not os.path.isdir(install_dir):
+            return
+
+        # Get the extension name
+        ext_name = self._get_extension_name()
+
+        # Extract the last part of the extension name for the shared library
+        # For example, from "custom_setup_ops.my_ops.custom_relu" we get "custom_relu"
+        names = ext_name.split('.') if '.' in ext_name else [ext_name]
+        lib_name = names[-1]
+
+        suffix = (
+            '.pyd'
+            if IS_WINDOWS
+            else ('.dylib' if OS_NAME.startswith('darwin') else '.so')
+        )
+
+        # Build the directory path for the shared library
+        # For single-level: names[:-1] is empty, so dir_path = install_dir
+        # For multi-level: names[:-1] contains the package path
+        dir_path = os.path.join(install_dir, *names[:-1])
+        old = os.path.join(dir_path, f"{lib_name}{suffix}")
+        new = os.path.join(dir_path, f"{lib_name}_pd_{suffix}")
+        if os.path.exists(old):
+            if os.path.exists(new):
+                os.remove(new)
+            os.rename(old, new)
+
+    def _single_entry_layout(self) -> None:
+        """
+        Ensure only one top-level item in install_dir contains the package name by:
+          - moving {pkg}.py -> {pkg}/__init__.py
+          - moving {pkg}_pd_.so -> {pkg}/{pkg}_pd_.so
+          - removing any {pkg}-*.egg-info left by setuptools install (only if dist-info exists)
+        This keeps legacy tests that scan os.listdir(site_dir) happy.
+        """
+        install_dir = (
+            getattr(self, 'install_lib', None)
+            or getattr(self, 'install_purelib', None)
+            or getattr(self, 'install_platlib', None)
+        )
+        if not install_dir or not os.path.isdir(install_dir):
+            return
+
+        # Get the extension name
+        ext_name = self._get_extension_name()
+
+        # Extract the package path from the extension name
+        # For example, from "custom_setup_ops.my_ops.custom_relu" we get "custom_setup_ops/my_ops"
+        pkg_path_parts = (
+            ext_name.split('.')[:-1] if '.' in ext_name else [ext_name]
+        )
+        pkg_path = os.path.join(*pkg_path_parts)
+
+        # Extract the last part of the extension name for the Python file and shared library
+        # For example, from "custom_setup_ops.my_ops.custom_relu" we get "custom_relu"
+        lib_name = ext_name.split('.')[-1] if '.' in ext_name else ext_name
+
+        # Prepare paths
+        pkg_dir = os.path.join(install_dir, pkg_path)
+        py_src = os.path.join(install_dir, f"{lib_name}.py")
+        # Find compiled lib (renamed or not)
+        suf_so = (
+            '.pyd'
+            if IS_WINDOWS
+            else ('.dylib' if OS_NAME.startswith('darwin') else '.so')
+        )
+        so_candidates = [
+            os.path.join(install_dir, f"{lib_name}_pd_{suf_so}"),
+            os.path.join(install_dir, f"{lib_name}{suf_so}"),
+        ]
+        so_src = next((p for p in so_candidates if os.path.exists(p)), None)
+        # Create package dir
+        if not os.path.isdir(pkg_dir):
+            os.makedirs(pkg_dir, exist_ok=True)
+        # Move python stub to package/__init__.py if exists
+        if os.path.exists(py_src):
+            py_dst = os.path.join(pkg_dir, "__init__.py")
+            if os.path.exists(py_dst):
+                os.remove(py_dst)
+            os.replace(py_src, py_dst)
+        # Move shared lib into the package dir if exists
+        if so_src and os.path.exists(so_src):
+            so_dst = os.path.join(pkg_dir, os.path.basename(so_src))
+            if os.path.exists(so_dst):
+                os.remove(so_dst)
+            os.replace(so_src, so_dst)
+
+
 def load(
     name: str,
     sources: Sequence[str],
diff --git a/python/paddle/utils/cpp_extension/extension_utils.py b/python/paddle/utils/cpp_extension/extension_utils.py
index c1ecd343b245d0..2918e588df350d 100644
--- a/python/paddle/utils/cpp_extension/extension_utils.py
+++ b/python/paddle/utils/cpp_extension/extension_utils.py
@@ -31,11 +31,8 @@
 import textwrap
 import threading
 import warnings
-from contextlib import contextmanager
 from importlib import machinery
 
-from setuptools.command import bdist_egg
-
 try:
     from subprocess import DEVNULL  # py3
 except ImportError:
@@ -151,18 +148,6 @@
 ]
 
 
-@contextmanager
-def bootstrap_context():
-    """
-    Context to manage how to write `__bootstrap__` code in .egg
-    """
-    origin_write_stub = bdist_egg.write_stub
-    bdist_egg.write_stub = custom_write_stub
-    yield
-
-    bdist_egg.write_stub = origin_write_stub
-
-
 def load_op_meta_info_and_register_op(lib_filename: str) -> list[str]:
     new_list = core.load_op_meta_info_and_register_op(lib_filename)
     proto_sync_ops = OpProtoHolder.instance().update_op_proto(new_list)
@@ -237,7 +222,8 @@ def __bootstrap__():
     with open(pyfile, 'w') as f:
         f.write(
             _stub_template.format(
-                resource=resource, custom_api='\n\n'.join(api_content)
+                resource=os.path.basename(resource),
+                custom_api='\n\n'.join(api_content),
             )
         )
 
diff --git a/test/cpp_extension/test_cpp_extension_setup.py b/test/cpp_extension/test_cpp_extension_setup.py
index 53e39fc2993c32..dbf60d83a0dfd9 100644
--- a/test/cpp_extension/test_cpp_extension_setup.py
+++ b/test/cpp_extension/test_cpp_extension_setup.py
@@ -39,13 +39,15 @@ def setUp(self):
             cmd += f' --install-lib={site_dir}'
         run_cmd(cmd)
 
-        custom_egg_path = [
+        custom_install_path = [
             x for x in os.listdir(site_dir) if 'custom_cpp_extension' in x
         ]
-        assert len(custom_egg_path) == 1, (
-            f"Matched egg number is {len(custom_egg_path)}."
+
+        assert len(custom_install_path) == 2, (
+            f"Matched egg number is {len(custom_install_path)}."
         )
-        sys.path.append(os.path.join(site_dir, custom_egg_path[0]))
+
+        sys.path.append(os.path.join(site_dir, custom_install_path[0]))
         #################################
 
         # config seed
diff --git a/test/cpp_extension/test_mixed_extension_setup.py b/test/cpp_extension/test_mixed_extension_setup.py
index b064aaeb2099e3..61e6991b686188 100644
--- a/test/cpp_extension/test_mixed_extension_setup.py
+++ b/test/cpp_extension/test_mixed_extension_setup.py
@@ -111,13 +111,15 @@ def setUp(self):
             cmd += f' --install-lib={site_dir}'
         run_cmd(cmd)
 
-        custom_egg_path = [
+        custom_install_path = [
             x for x in os.listdir(site_dir) if 'mix_relu_extension' in x
         ]
-        assert len(custom_egg_path) == 1, (
-            f"Matched egg number is {len(custom_egg_path)}."
+
+        assert len(custom_install_path) == 2, (
+            f"Matched egg number is {len(custom_install_path)}."
         )
-        sys.path.append(os.path.join(site_dir, custom_egg_path[0]))
+
+        sys.path.append(os.path.join(site_dir, custom_install_path[0]))
         #################################
 
         # config seed
diff --git a/test/custom_op/test_custom_relu_op_setup.py b/test/custom_op/test_custom_relu_op_setup.py
index c13c2890a0eb65..440c0a4afcec48 100644
--- a/test/custom_op/test_custom_relu_op_setup.py
+++ b/test/custom_op/test_custom_relu_op_setup.py
@@ -167,13 +167,15 @@ def setUp(self):
             site_dir = site.getsitepackages()[1]
         else:
             site_dir = site.getsitepackages()[0]
-        custom_egg_path = [
+        custom_install_path = [
             x for x in os.listdir(site_dir) if 'custom_relu_module_setup' in x
         ]
-        assert len(custom_egg_path) == 2, (
-            f"Matched egg number is {len(custom_egg_path)}."
+
+        assert len(custom_install_path) == 2, (
+            f"Matched egg number is {len(custom_install_path)}."
         )
-        sys.path.append(os.path.join(site_dir, custom_egg_path[0]))
+
+        sys.path.append(os.path.join(site_dir, custom_install_path[0]))
 
         # usage: import the package directly
         import custom_relu_module_setup
diff --git a/test/custom_op/test_custom_relu_op_xpu_setup.py b/test/custom_op/test_custom_relu_op_xpu_setup.py
index 84cb45a30f4223..122d8e31abda78 100644
--- a/test/custom_op/test_custom_relu_op_xpu_setup.py
+++ b/test/custom_op/test_custom_relu_op_xpu_setup.py
@@ -72,15 +72,17 @@ def setUp(self):
         run_cmd(cmd)
 
         site_dir = site.getsitepackages()[0]
-        custom_egg_path = [
+        custom_install_path = [
             x
             for x in os.listdir(site_dir)
             if 'custom_relu_xpu_module_setup' in x
         ]
-        assert len(custom_egg_path) == 1, (
-            f"Matched egg number is {len(custom_egg_path)}."
+
+        assert len(custom_install_path) == 2, (
+            f"Matched egg number is {len(custom_install_path)}."
         )
-        sys.path.append(os.path.join(site_dir, custom_egg_path[0]))
+
+        sys.path.append(os.path.join(site_dir, custom_install_path[0]))
 
         # usage: import the package directly
         import custom_relu_xpu_module_setup
diff --git a/test/custom_op/test_inference_gap_setup.py b/test/custom_op/test_inference_gap_setup.py
index 697e5dc36dcc39..a8ea70614c003d 100644
--- a/test/custom_op/test_inference_gap_setup.py
+++ b/test/custom_op/test_inference_gap_setup.py
@@ -54,13 +54,15 @@ def setUp(self):
 
             site_dir = site.getsitepackages()[0]
 
-            custom_egg_path = [
+            custom_install_path = [
                 x for x in os.listdir(site_dir) if 'gap_op_setup' in x
             ]
-            assert len(custom_egg_path) == 1, (
-                f"Matched egg number is {len(custom_egg_path)}."
+
+            assert len(custom_install_path) == 2, (
+                f"Matched egg number is {len(custom_install_path)}."
             )
-            sys.path.append(os.path.join(site_dir, custom_egg_path[0]))
+
+            sys.path.append(os.path.join(site_dir, custom_install_path[0]))
 
             # usage: import the package directly
             import gap_op_setup