diff --git a/.gitignore b/.gitignore
index edb0542..3832704 100644
--- a/.gitignore
+++ b/.gitignore
@@ -1,6 +1,9 @@
 # Compiled python modules.
 *.pyc
 
+# Persisted models.
+*.pkl
+
 # Setuptools distribution folder.
 python/dist/
 
diff --git a/python/MANIFEST.in b/python/MANIFEST.in
index 9e73428..e1edbb1 100644
--- a/python/MANIFEST.in
+++ b/python/MANIFEST.in
@@ -1,3 +1,6 @@
 include stan/unix/*.stan
 include stan/win/*.stan
 include LICENSE
+
+# Ensure in-place built models do not get included in the source dist.
+prune fbprophet/stan_models
diff --git a/python/setup.py b/python/setup.py
index 1fa064b..78fbcb0 100644
--- a/python/setup.py
+++ b/python/setup.py
@@ -11,33 +11,54 @@ from pkg_resources import (
 )
 from setuptools import setup
 from setuptools.command.build_py import build_py
+from setuptools.command.develop import develop
 from setuptools.command.test import test as test_command
 
+
+PLATFORM = 'unix'
+if platform.platform().startswith('Win'):
+    PLATFORM = 'win'
+
+SETUP_DIR = os.path.dirname(os.path.abspath(__file__))
+MODELS_DIR = os.path.join(SETUP_DIR, 'stan', PLATFORM)
+MODELS_TARGET_DIR = os.path.join('fbprophet', 'stan_models')
+
+
+def build_stan_models(target_dir, models_dir=MODELS_DIR):
+    from pystan import StanModel
+    for model_type in ['linear', 'logistic']:
+        model_name = 'prophet_{}_growth.stan'.format(model_type)
+        target_name = '{}_growth.pkl'.format(model_type)
+        with open(os.path.join(models_dir, model_name)) as f:
+            model_code = f.read()
+        sm = StanModel(model_code=model_code)
+        with open(os.path.join(target_dir, target_name), 'wb') as f:
+            pickle.dump(sm, f, protocol=pickle.HIGHEST_PROTOCOL)
+
+
 class BuildPyCommand(build_py):
     """Custom build command to pre-compile Stan models."""
 
     def run(self):
         if not self.dry_run:
-            self.build_stan_models()
+            target_dir = os.path.join(self.build_lib, MODELS_TARGET_DIR)
+            self.mkpath(target_dir)
+            build_stan_models(target_dir)
 
         build_py.run(self)
 
-    def build_stan_models(self):
-        from pystan import StanModel
-        target_dir = os.path.join(self.build_lib, 'fbprophet/stan_models')
-        self.mkpath(target_dir)
 
-        if platform.platform().startswith('Win'):
-            plat = 'win'
-        else:
-            plat = 'unix'
+class DevelopCommand(develop):
+    """Custom develop command to pre-compile Stan models in-place."""
+
+    def run(self):
+        if not self.dry_run:
+            target_dir = os.path.join(self.setup_path, MODELS_TARGET_DIR)
+            self.mkpath(target_dir)
+            build_stan_models(target_dir)
+
+        develop.run(self)
 
-        for model_type in ['linear', 'logistic']:
-            with open('stan/{}/prophet_{}_growth.stan'.format(plat, model_type)) as f:
-                model_code = f.read()
-            sm = StanModel(model_code=model_code)
-            with open(os.path.join(target_dir, '{}_growth.pkl'.format(model_type)), 'wb') as f:
-                pickle.dump(sm, f, protocol=pickle.HIGHEST_PROTOCOL)
 
 class TestCommand(test_command):
     """We must run tests on the build directory, not source."""
@@ -96,6 +117,7 @@ setup(
     include_package_data=True,
     cmdclass={
         'build_py': BuildPyCommand,
+        'develop': DevelopCommand,
         'test': TestCommand,
     },
     test_suite='fbprophet.tests.test_prophet',