diff --git a/.pre-commit-config.yaml b/.pre-commit-config.yaml
new file mode 100644
index 0000000..8af8ef3
--- /dev/null
+++ b/.pre-commit-config.yaml
@@ -0,0 +1,68 @@
+# Pre-commit hooks for code quality
+# Install: pre-commit install
+# Run manually: pre-commit run --all-files
+# Update hooks: pre-commit autoupdate
+
+repos:
+  # Ruff - Fast Python linter and formatter (replaces black, isort, flake8)
+  - repo: https://github.com/astral-sh/ruff-pre-commit
+    rev: v0.6.0  # Use latest version
+    hooks:
+      # Run the linter
+      - id: ruff
+        args: [--fix]
+        types_or: [python, pyi]
+
+      # Run the formatter
+      - id: ruff-format
+        types_or: [python, pyi]
+
+  # Mypy - Static type checker (disabled for now - needs type annotation fixes)
+  # - repo: https://github.com/pre-commit/mirrors-mypy
+  #   rev: v1.11.0  # Use latest version
+  #   hooks:
+  #     - id: mypy
+  #       additional_dependencies:
+  #         - types-requests
+  #         - pydantic>=2.0.0
+  #       args: [--config-file=pyproject.toml]
+  #       exclude: ^tests/
+
+  # Pre-commit hooks for general file quality
+  - repo: https://github.com/pre-commit/pre-commit-hooks
+    rev: v4.6.0
+    hooks:
+      # File formatting
+      - id: trailing-whitespace
+      - id: end-of-file-fixer
+      - id: check-yaml
+      - id: check-json
+      - id: check-toml
+      - id: check-added-large-files
+        args: [--maxkb=500]
+
+      # Code quality
+      - id: check-ast  # Validate Python syntax
+      - id: check-merge-conflict
+      - id: debug-statements  # Check for debugger imports
+
+      # Security
+      - id: detect-private-key
+
+  # Check for common security issues (disabled for now - needs baseline configuration)
+  # - repo: https://github.com/PyCQA/bandit
+  #   rev: 1.7.9
+  #   hooks:
+  #     - id: bandit
+  #       args: [-c, pyproject.toml]
+  #       exclude: ^tests/
+
+# CI skip: Set to false to run hooks in CI
+ci:
+  autofix_commit_msg: |
+    [pre-commit.ci] auto fixes from pre-commit hooks
+  autofix_prs: true
+  autoupdate_commit_msg: '[pre-commit.ci] pre-commit autoupdate'
+  autoupdate_schedule: weekly
+  skip: []
+  submodules: false
diff --git a/pyproject.toml b/pyproject.toml
new file mode 100644
index 0000000..7c15f02
--- /dev/null
+++ b/pyproject.toml
@@ -0,0 +1,169 @@
+[project]
+name = "nadlan-mcp"
+version = "2.0.0"
+description = "Israeli Real Estate MCP Server"
+readme = "README.md"
+requires-python = ">=3.7"
+license = {text = "MIT"}
+authors = [
+    {name = "Nadlan MCP Contributors"}
+]
+classifiers = [
+    "Development Status :: 4 - Beta",
+    "Intended Audience :: Developers",
+    "License :: OSI Approved :: MIT License",
+    "Programming Language :: Python :: 3",
+    "Programming Language :: Python :: 3.7",
+    "Programming Language :: Python :: 3.8",
+    "Programming Language :: Python :: 3.9",
+    "Programming Language :: Python :: 3.10",
+    "Programming Language :: Python :: 3.11",
+    "Programming Language :: Python :: 3.12",
+    "Programming Language :: Python :: 3.13",
+]
+
+dependencies = [
+    "requests>=2.31.0",
+    "python-dotenv>=1.0.0",
+    "pydantic>=2.0.0",
+    "fastmcp>=0.1.0",
+]
+
+[project.optional-dependencies]
+dev = [
+    "pytest>=7.4.0",
+    "pytest-cov>=4.1.0",
+    "pytest-mock>=3.11.1",
+    "pytest-anyio>=0.0.0",
+    "ruff>=0.1.0",
+    "mypy>=1.5.0",
+    "pre-commit>=3.4.0",
+    "types-requests>=2.31.0",
+]
+
+[build-system]
+requires = ["setuptools>=61.0"]
+build-backend = "setuptools.build_meta"
+
+# Ruff configuration
+[tool.ruff]
+line-length = 100
+target-version = "py37"
+
+# Exclude directories
+exclude = [
+    ".git",
+    ".mypy_cache",
+    ".pytest_cache",
+    ".ruff_cache",
+    ".venv",
+    "venv",
+    "__pycache__",
+    "build",
+    "dist",
+    "*.egg-info",
+]
+
+[tool.ruff.lint]
+# Enable specific rule sets
+select = [
+    "E",   # pycodestyle errors
+    "W",   # pycodestyle warnings
+    "F",   # pyflakes
+    "I",   # isort (import sorting)
+    "B",   # flake8-bugbear
+    "C4",  # flake8-comprehensions
+    "UP",  # pyupgrade
+    "SIM", # flake8-simplify
+]
+
+# Ignore specific rules
+ignore = [
+    "E501",  # line too long (handled by formatter)
+    "B008",  # do not perform function calls in argument defaults
+    "B904",  # raise from exceptions
+    "SIM108", # use ternary operator (sometimes less readable)
+]
+
+# Allow autofix for all enabled rules
+fixable = ["ALL"]
+unfixable = []
+
+# Per-file ignores
+[tool.ruff.lint.per-file-ignores]
+"__init__.py" = ["F401"]  # Allow unused imports in __init__.py
+"tests/**/*.py" = ["S101"]  # Allow assert in tests
+
+[tool.ruff.lint.isort]
+known-first-party = ["nadlan_mcp"]
+force-sort-within-sections = true
+
+[tool.ruff.format]
+quote-style = "double"
+indent-style = "space"
+skip-magic-trailing-comma = false
+line-ending = "auto"
+
+# Mypy configuration
+[tool.mypy]
+python_version = "3.10"
+warn_return_any = true
+warn_unused_configs = true
+disallow_untyped_defs = false  # Gradual typing - start permissive
+check_untyped_defs = true
+no_implicit_optional = true
+warn_redundant_casts = true
+warn_unused_ignores = true
+warn_no_return = true
+warn_unreachable = true
+strict_equality = true
+pretty = true
+
+# Per-module options
+[[tool.mypy.overrides]]
+module = "tests.*"
+disallow_untyped_defs = false
+
+[[tool.mypy.overrides]]
+module = "fastmcp.*"
+ignore_missing_imports = true
+
+[[tool.mypy.overrides]]
+module = "mcp.*"
+ignore_missing_imports = true
+
+# Pytest configuration
+[tool.pytest.ini_options]
+testpaths = ["tests"]
+python_files = ["test_*.py"]
+python_classes = ["Test*"]
+python_functions = ["test_*"]
+addopts = "-ra -q --strict-markers"
+markers = [
+    "unit: fast unit tests (default)",
+    "integration: slow integration tests requiring real API calls",
+    "api_health: weekly API health check tests (run separately)",
+]
+
+# Coverage configuration
+[tool.coverage.run]
+source = ["nadlan_mcp"]
+omit = [
+    "tests/*",
+    "nadlan_mcp/__pycache__/*",
+    "*/site-packages/*",
+]
+
+[tool.coverage.report]
+precision = 2
+show_missing = true
+skip_covered = false
+exclude_lines = [
+    "pragma: no cover",
+    "def __repr__",
+    "if TYPE_CHECKING:",
+    "raise AssertionError",
+    "raise NotImplementedError",
+    "if __name__ == .__main__.:",
+    "@abstractmethod",
+]
diff --git a/requirements-dev.txt b/requirements-dev.txt
index 7edc20b..2fc9f64 100644
--- a/requirements-dev.txt
+++ b/requirements-dev.txt
@@ -1,19 +1,19 @@
-# Development dependencies
+# Development dependencies for nadlan-mcp
+# Install with: pip install -r requirements-dev.txt
 -r requirements.txt
 
 # Testing
-pytest>=7.0.0,<8.0.0
-pytest-cov>=4.0.0,<5.0.0
-pytest-mock>=3.10.0,<4.0.0
-vcrpy>=4.2.0,<5.0.0
+pytest>=7.4.0,<9.0.0
+pytest-cov>=4.1.0,<6.0.0
+pytest-mock>=3.11.1,<4.0.0
+pytest-anyio>=0.0.0,<1.0.0
+vcrpy>=5.1.0,<7.0.0
 
-# Code quality
-black>=23.0.0,<24.0.0
-isort>=5.12.0,<6.0.0
-flake8>=6.0.0,<7.0.0
-mypy>=1.0.0,<2.0.0
-pre-commit>=3.0.0,<4.0.0
+# Code Quality - Using Ruff (replaces black, isort, flake8)
+ruff>=0.6.0,<1.0.0
+mypy>=1.11.0,<2.0.0
+pre-commit>=3.8.0,<4.0.0
+bandit>=1.7.9,<2.0.0
 
 # Type stubs
 types-requests>=2.31.0,<3.0.0
-