diff --git a/scripts/setup.sh b/scripts/setup.sh
new file mode 100644
index 0000000..6fcff54
--- /dev/null
+++ b/scripts/setup.sh
@@ -0,0 +1,62 @@
+#!/bin/bash
+set -e
+
+# Setup script for Ross Ultrix MCP Server development
+echo "Setting up Ross Ultrix MCP Server development environment..."
+
+# Check if Node.js is installed
+if ! command -v node &> /dev/null; then
+    echo "Error: Node.js is not installed. Please install Node.js 18+ and try again."
+    exit 1
+fi
+
+# Check Node.js version
+NODE_VERSION=$(node --version | cut -d'v' -f2 | cut -d'.' -f1)
+if [ "$NODE_VERSION" -lt "18" ]; then
+    echo "Error: Node.js version 18 or higher is required. Current version: $(node --version)"
+    exit 1
+fi
+
+echo "✓ Node.js version $(node --version) detected"
+
+# Install dependencies
+echo "Installing npm dependencies..."
+npm install
+
+echo "✓ Dependencies installed"
+
+# Build TypeScript
+echo "Building TypeScript..."
+npm run build
+
+echo "✓ TypeScript compiled successfully"
+
+# Create necessary directories
+echo "Creating directories..."
+mkdir -p logs
+mkdir -p config
+
+echo "✓ Directories created"
+
+# Copy environment file if it doesn't exist
+if [ ! -f ".env" ]; then
+    echo "Creating .env file from example..."
+    cp .env.example .env
+    echo "✓ .env file created. Please edit it with your Ross Ultrix connection details."
+else
+    echo "✓ .env file already exists"
+fi
+
+# Check if Docker is available
+if command -v docker &> /dev/null; then
+    echo "✓ Docker detected - you can use 'npm run docker:build' to build the container"
+else
+    echo "⚠ Docker not detected - container operations will not be available"
+fi
+
+echo ""
+echo "Setup complete! Next steps:"
+echo "1. Edit .env file with your Ross Ultrix connection details"
+echo "2. Run 'npm run dev' to start development server"
+echo "3. Or run 'npm run docker:build && npm run docker:run' to test with Docker"
+echo ""