diff --git a/package.json b/package.json
index a25368ce..ac551024 100644
--- a/package.json
+++ b/package.json
@@ -285,6 +285,11 @@
         "title": "Get git path",
         "category": "Raspberry Pi Pico",
         "enablement": "false"
+      },
+      {
+        "command": "raspberry-pi-pico.cleanZephyr",
+        "title": "Remove Zephyr workspace",
+        "category": "Raspberry Pi Pico"
       }
     ],
     "configuration": {
diff --git a/src/commands/cleanZephyr.mts b/src/commands/cleanZephyr.mts
new file mode 100644
index 00000000..0acb7efa
--- /dev/null
+++ b/src/commands/cleanZephyr.mts
@@ -0,0 +1,55 @@
+import { commands, Uri, window, workspace } from "vscode";
+import { CLEAN_ZEPHYR } from "./cmdIds.mjs";
+import { Command } from "./command.mjs";
+import Logger from "../logger.mjs";
+import { homedir } from "os";
+import { unknownErrorToString } from "../utils/errorHelper.mjs";
+import State from "../state.mjs";
+
+export class CleanZephyrCommand extends Command {
+  private _logger: Logger = new Logger("CleanZephyrCommand");
+
+  public constructor() {
+    super(CLEAN_ZEPHYR);
+  }
+
+  public override async execute(): Promise<void> {
+    const zephyrWorkspaceUri = Uri.joinPath(
+      Uri.file(homedir()),
+      ".pico-sdk",
+      "zephyr_workspace"
+    );
+
+    try {
+      await workspace.fs.stat(zephyrWorkspaceUri);
+
+      await workspace.fs.delete(zephyrWorkspaceUri, { recursive: true });
+      this._logger.info(
+        `Zephyr workspace at ${zephyrWorkspaceUri.fsPath} has been removed.`
+      );
+      if (State.getInstance().isZephyrProject) {
+        const answer = await window.showInformationMessage(
+          "Zephyr workspace has been removed. " +
+            "Reload the window to reinitialize the Zephyr workspace.",
+          "Reload Window"
+        );
+
+        if (answer === "Reload Window") {
+          await commands.executeCommand("workbench.action.reloadWindow");
+        }
+      } else {
+        void window.showInformationMessage(
+          "Zephyr workspace has been removed."
+        );
+      }
+    } catch (e) {
+      this._logger.warn(
+        `Zephyr workspace at ${zephyrWorkspaceUri.fsPath} ` +
+          `does not exist or could not be accessed: ${unknownErrorToString(e)}`
+      );
+      void window.showInformationMessage(
+        "A Zephyr workspace does not exist or could not be accessed."
+      );
+    }
+  }
+}
diff --git a/src/commands/cmdIds.mts b/src/commands/cmdIds.mts
index 114b8b93..6b6d6c16 100644
--- a/src/commands/cmdIds.mts
+++ b/src/commands/cmdIds.mts
@@ -47,3 +47,5 @@ export const UNINSTALL_PICO_SDK = "uninstallPicoSDK";
 export const UPDATE_OPENOCD = "updateOpenOCD";
 
 export const OPEN_UNINSTALLER = "openUninstaller";
+
+export const CLEAN_ZEPHYR = "cleanZephyr";
diff --git a/src/extension.mts b/src/extension.mts
index 0fe0fbf8..000a5e68 100644
--- a/src/extension.mts
+++ b/src/extension.mts
@@ -126,6 +126,7 @@ import LastUsedDepsStore from "./utils/lastUsedDeps.mjs";
 import { getWebviewOptions } from "./webview/sharedFunctions.mjs";
 import { UninstallerPanel } from "./webview/uninstallerPanel.mjs";
 import OpenUninstallerCommand from "./commands/openUninstaller.mjs";
+import { CleanZephyrCommand } from "./commands/cleanZephyr.mjs";
 
 export async function activate(context: ExtensionContext): Promise<void> {
   Logger.info(LoggerSource.extension, "Extension activation triggered");
@@ -186,6 +187,7 @@ export async function activate(context: ExtensionContext): Promise<void> {
     new SbomTargetPathReleaseCommand(),
     new OpenUninstallerCommand(context.extensionUri),
     new GetGitPathCommand(settings),
+    new CleanZephyrCommand(),
   ];
 
   // register all command handlers
diff --git a/src/utils/setupZephyr.mts b/src/utils/setupZephyr.mts
index c38109e6..30ff5096 100644
--- a/src/utils/setupZephyr.mts
+++ b/src/utils/setupZephyr.mts
@@ -26,6 +26,7 @@ import VersionBundlesLoader, { type VersionBundle } from "./versionBundles.mjs";
 import {
   CURRENT_DTC_VERSION,
   CURRENT_GPERF_VERSION,
+  GET_PIP_URL,
   LICENSE_URL_7ZIP,
   OPENOCD_VERSION,
   SDK_REPOSITORY_URL,
@@ -355,6 +356,84 @@ async function checkPicotool(latestVb: VersionBundle): Promise<boolean> {
   );
 }
 
+async function preparePython(python3Path: string): Promise<boolean> {
+  if (!python3Path.includes(".pico-sdk") || process.platform !== "win32") {
+    return true;
+  }
+
+  // download get-pip.py and run it
+  const getPipUrl = new URL(GET_PIP_URL);
+  const getPipTarget = join(dirname(python3Path), "get-pip.py");
+
+  const downloadResult = await downloadFileGot(getPipUrl, getPipTarget);
+  if (!downloadResult) {
+    Logger.error(
+      LoggerSource.zephyrSetup,
+      "Failed to download get-pip.py for Python setup."
+    );
+
+    return false;
+  }
+
+  const pipInstallCommand: string = `"${python3Path}" "${getPipTarget}"`;
+
+  const result = await _runCommand(pipInstallCommand, {
+    windowsHide: true,
+  });
+  if (result !== 0) {
+    Logger.error(
+      LoggerSource.zephyrSetup,
+      "Failed to install pip for Python setup."
+    );
+
+    return false;
+  }
+
+  // add pip to python path by modifying the ._pth file
+  const dirContents = await workspace.fs.readDirectory(
+    Uri.file(dirname(python3Path))
+  );
+
+  const pthFile = dirContents.find(item => item[0].endsWith("._pth"));
+  if (pthFile === undefined) {
+    Logger.error(
+      LoggerSource.zephyrSetup,
+      "Failed to find ._pth file for Python setup."
+    );
+
+    return false;
+  }
+
+  const pthFileUri = Uri.file(join(dirname(python3Path), pthFile[0]));
+  let pthFileContents = await workspace.fs.readFile(pthFileUri);
+  let pthFileString = pthFileContents.toString();
+  pthFileString = pthFileString.replace(
+    "#import site",
+    "Lib\\site-packages\nScripts\n.\n\n#import site"
+  );
+  pthFileContents = Buffer.from(pthFileString, "utf-8");
+  await workspace.fs.writeFile(pthFileUri, pthFileContents);
+
+  const pipPathCommand: string =
+    `"${python3Path}" -m pip install --upgrade ` +
+    "pip setuptools wheel virtualenv";
+
+  const pipResult = await _runCommand(pipPathCommand, {
+    windowsHide: true,
+  });
+
+  if (pipResult !== 0) {
+    Logger.error(
+      LoggerSource.zephyrSetup,
+      "Failed to upgrade pip, setuptools, wheel and virtualenv."
+    );
+
+    return false;
+  }
+
+  return true;
+}
+
 async function checkSdk(
   extensionUri: Uri,
   latestVb: [string, VersionBundle],
@@ -926,6 +1005,18 @@ export async function setupZephyr(
 
         return false;
       }
+      if (!(await preparePython(python3Path))) {
+        progress.report({
+          message: "Failed",
+          increment: 100,
+        });
+        void window.showErrorMessage(
+          "Failed to prepare Python for Zephyr setup. " +
+            "Cannot continue Zephyr setup."
+        );
+
+        return false;
+      }
 
       // required for svd files
       const sdk = await checkSdk(data.extUri, latestVb, python3Path);
diff --git a/src/utils/sharedConstants.mts b/src/utils/sharedConstants.mts
index 2b118c9e..353c0e10 100644
--- a/src/utils/sharedConstants.mts
+++ b/src/utils/sharedConstants.mts
@@ -3,6 +3,7 @@ export const WINDOWS_X86_PYTHON_DOWNLOAD_URL =
 export const WINDOWS_ARM64_PYTHON_DOWNLOAD_URL =
   "https://www.python.org/ftp/python/3.13.7/python-3.13.7-embed-arm64.zip";
 export const CURRENT_PYTHON_VERSION = "3.13.7";
+export const GET_PIP_URL = "https://bootstrap.pypa.io/get-pip.py";
 
 export const CURRENT_DATA_VERSION = "0.18.0";
 export const OPENOCD_VERSION = "0.12.0+dev";