diff --git a/changelogs/fragments/ansible-test-layout-detection.yml b/changelogs/fragments/ansible-test-layout-detection.yml
new file mode 100644
index 00000000000..946853db943
--- /dev/null
+++ b/changelogs/fragments/ansible-test-layout-detection.yml
@@ -0,0 +1,2 @@
+minor_changes:
+  - ansible-test - Update the logic used to detect when ``ansible-test`` is running from source.
diff --git a/test/lib/ansible_test/_internal/ansible_util.py b/test/lib/ansible_test/_internal/ansible_util.py
index 9548d37c790..be88ccd8750 100644
--- a/test/lib/ansible_test/_internal/ansible_util.py
+++ b/test/lib/ansible_test/_internal/ansible_util.py
@@ -231,7 +231,7 @@ def generate_egg_info(path: str) -> None:
     # minimal PKG-INFO stub following the format defined in PEP 241
     # required for older setuptools versions to avoid a traceback when importing pkg_resources from packages like cryptography
     # newer setuptools versions are happy with an empty directory
-    # including a stub here means we don't need to locate the existing file or have setup.py generate it when running from source
+    # including a stub here means we don't need to locate the existing file or run any tools to generate it when running from source
     pkg_info = '''
 Metadata-Version: 1.0
 Name: ansible
diff --git a/test/lib/ansible_test/_internal/provider/layout/ansible.py b/test/lib/ansible_test/_internal/provider/layout/ansible.py
index 3ee818a5b5c..3fad835a39b 100644
--- a/test/lib/ansible_test/_internal/provider/layout/ansible.py
+++ b/test/lib/ansible_test/_internal/provider/layout/ansible.py
@@ -20,7 +20,7 @@ class AnsibleLayout(LayoutProvider):
     @staticmethod
     def is_content_root(path: str) -> bool:
         """Return True if the given path is a content root for this provider."""
-        return os.path.exists(os.path.join(path, 'setup.py')) and os.path.exists(os.path.join(path, 'bin/ansible-test'))
+        return os.path.isfile(os.path.join(path, 'pyproject.toml')) and os.path.isdir(os.path.join(path, 'test/lib/ansible_test'))
 
     def create(self, root: str, paths: list[str]) -> ContentLayout:
         """Create a Layout using the given root and paths."""