diff --git a/src/Aspire.Cli/Commands/RootCommand.cs b/src/Aspire.Cli/Commands/RootCommand.cs
index db956046a9a..6126c8d8761 100644
--- a/src/Aspire.Cli/Commands/RootCommand.cs
+++ b/src/Aspire.Cli/Commands/RootCommand.cs
@@ -10,6 +10,7 @@
 using System.Diagnostics;
 #endif
 
+using Aspire.Cli.Bundles;
 using Aspire.Cli.Commands.Sdk;
 using Aspire.Cli.Configuration;
 using Aspire.Cli.Interaction;
@@ -131,6 +132,7 @@ public RootCommand(
         SdkCommand sdkCommand,
         SetupCommand setupCommand,
         ExtensionInternalCommand extensionInternalCommand,
+        IBundleService bundleService,
         IFeatures featureFlags,
         IInteractionService interactionService)
         : base(RootCommandStrings.Description)
@@ -208,7 +210,11 @@ public RootCommand(
         Subcommands.Add(agentCommand);
         Subcommands.Add(telemetryCommand);
         Subcommands.Add(docsCommand);
-        Subcommands.Add(setupCommand);
+
+        if (bundleService.IsBundle)
+        {
+            Subcommands.Add(setupCommand);
+        }
 
         if (featureFlags.IsFeatureEnabled(KnownFeatures.ExecCommandEnabled, false))
         {
diff --git a/tests/Aspire.Cli.Tests/Commands/RootCommandTests.cs b/tests/Aspire.Cli.Tests/Commands/RootCommandTests.cs
index c58ec07c433..5a11b6da189 100644
--- a/tests/Aspire.Cli.Tests/Commands/RootCommandTests.cs
+++ b/tests/Aspire.Cli.Tests/Commands/RootCommandTests.cs
@@ -344,4 +344,33 @@ public async Task InformationalFlag_DoesNotCreateSentinel_OnSubsequentFirstRun()
         Assert.True(sentinel.WasCreated);
     }
 
+    [Fact]
+    public void SetupCommand_NotAvailable_WhenBundleIsNotAvailable()
+    {
+        using var workspace = TemporaryWorkspace.Create(outputHelper);
+        var services = CliTestHelper.CreateServiceCollection(workspace, outputHelper);
+        var provider = services.BuildServiceProvider();
+
+        var command = provider.GetRequiredService<RootCommand>();
+        var hasSetupCommand = command.Subcommands.Any(cmd => cmd.Name == "setup");
+
+        Assert.False(hasSetupCommand);
+    }
+
+    [Fact]
+    public void SetupCommand_Available_WhenBundleIsAvailable()
+    {
+        using var workspace = TemporaryWorkspace.Create(outputHelper);
+        var services = CliTestHelper.CreateServiceCollection(workspace, outputHelper, options =>
+        {
+            options.BundleServiceFactory = _ => new TestBundleService(isBundle: true);
+        });
+        var provider = services.BuildServiceProvider();
+
+        var command = provider.GetRequiredService<RootCommand>();
+        var hasSetupCommand = command.Subcommands.Any(cmd => cmd.Name == "setup");
+
+        Assert.True(hasSetupCommand);
+    }
+
 }
diff --git a/tests/Aspire.Cli.Tests/Utils/CliTestHelper.cs b/tests/Aspire.Cli.Tests/Utils/CliTestHelper.cs
index 5ef18fe61ad..7b746e42e66 100644
--- a/tests/Aspire.Cli.Tests/Utils/CliTestHelper.cs
+++ b/tests/Aspire.Cli.Tests/Utils/CliTestHelper.cs
@@ -130,7 +130,7 @@ public static IServiceCollection CreateServiceCollection(TemporaryWorkspace work
         // Bundle layout services - return null/no-op implementations to trigger SDK mode fallback
         // This ensures backward compatibility: no layout found = use legacy SDK mode
         services.AddSingleton(options.LayoutDiscoveryFactory);
-        services.AddSingleton<IBundleService, NullBundleService>();
+        services.AddSingleton(options.BundleServiceFactory);
         services.AddSingleton<BundleNuGetService>();
 
         // AppHost project handlers - must match Program.cs registration pattern
@@ -501,6 +501,9 @@ public ISolutionLocator CreateDefaultSolutionLocatorFactory(IServiceProvider ser
     // Layout discovery - returns null by default (no bundle layout), causing SDK mode fallback
     public Func<IServiceProvider, ILayoutDiscovery> LayoutDiscoveryFactory { get; set; } = _ => new NullLayoutDiscovery();
 
+    // Bundle service - returns no-op implementation by default (no embedded bundle)
+    public Func<IServiceProvider, IBundleService> BundleServiceFactory { get; set; } = _ => new NullBundleService();
+
     public Func<IServiceProvider, IMcpTransportFactory> McpServerTransportFactory { get; set; } = (IServiceProvider serviceProvider) =>
     {
         var loggerFactory = serviceProvider.GetService<ILoggerFactory>();
@@ -553,6 +556,22 @@ public Task<BundleExtractResult> ExtractAsync(string destinationPath, bool force
         => Task.FromResult<Layout.LayoutConfiguration?>(null);
 }
 
+/// <summary>
+/// A configurable bundle service for testing bundle-dependent behavior.
+/// </summary>
+internal sealed class TestBundleService(bool isBundle) : IBundleService
+{
+    public bool IsBundle => isBundle;
+
+    public Task EnsureExtractedAsync(CancellationToken cancellationToken = default) => Task.CompletedTask;
+
+    public Task<BundleExtractResult> ExtractAsync(string destinationPath, bool force = false, CancellationToken cancellationToken = default)
+        => Task.FromResult(isBundle ? BundleExtractResult.AlreadyUpToDate : BundleExtractResult.NoPayload);
+
+    public Task<Layout.LayoutConfiguration?> EnsureExtractedAndGetLayoutAsync(CancellationToken cancellationToken = default)
+        => Task.FromResult<Layout.LayoutConfiguration?>(null);
+}
+
 internal sealed class TestOutputTextWriter : TextWriter
 {
     private readonly ITestOutputHelper _outputHelper;