diff --git a/.github/workflows/test-cookiecutters.yml b/.github/workflows/test-cookiecutters.yml
index 166380d..2485094 100644
--- a/.github/workflows/test-cookiecutters.yml
+++ b/.github/workflows/test-cookiecutters.yml
@@ -12,20 +12,21 @@ on:
 jobs:
   build-cli:
     runs-on: ubuntu-latest
-    strategy:
-      matrix:
-        python-version: ['3.9', '3.10']
 
     steps:
-      - uses: actions/checkout@v2
+      - uses: actions/checkout@v3
       - name: Set up Python ${{ matrix.python-version }}
-        uses: actions/setup-python@v2
+        uses: actions/setup-python@v4
         with:
-          python-version: ${{ matrix.python-version }}
+          python-version: |
+            3.8
+            3.9
+            3.10
+            3.11
 
       - name: Install dependencies
         run: |
-          pip install cookiecutter tox tox-gh-actions
+          pip install cookiecutter tox
 
       - run: mkdir -p .tmp/
 
@@ -39,20 +40,21 @@ jobs:
 
   build-lib:
     runs-on: ubuntu-latest
-    strategy:
-      matrix:
-        python-version: ['3.7', '3.8', '3.9', '3.10']
 
     steps:
-      - uses: actions/checkout@v2
+      - uses: actions/checkout@v3
       - name: Set up Python ${{ matrix.python-version }}
-        uses: actions/setup-python@v2
+        uses: actions/setup-python@v4
         with:
-          python-version: ${{ matrix.python-version }}
+          python-version: |
+            3.8
+            3.9
+            3.10
+            3.11
 
       - name: Install dependencies
         run: |
-          pip install cookiecutter tox tox-gh-actions build twine
+          pip install cookiecutter tox build twine
 
       - run: mkdir -p .tmp/
 
@@ -72,27 +74,32 @@ jobs:
 
   build-service:
     runs-on: ubuntu-latest
-    strategy:
-      matrix:
-        python-version: ['3.7', '3.8', '3.9', '3.10']
 
     steps:
-      - uses: actions/checkout@v2
-      - name: Set up Python ${{ matrix.python-version }}
-        uses: actions/setup-python@v2
+      - uses: actions/checkout@v3
+      - name: Set up Python ${{ matrix.python-version-loop }}
+        uses: actions/setup-python@v4
         with:
-          python-version: ${{ matrix.python-version }}
+          python-version: |
+            3.8
+            3.9
+            3.10
+            3.11
 
       - name: Install dependencies
         run: |
-          pip install cookiecutter tox tox-gh-actions
+          pip install cookiecutter tox
 
       - run: mkdir -p .tmp/
 
-      - name: Build cli
+      - name: Build service
         working-directory: .tmp
         run: cookiecutter --config-file ../tests/service.yaml --no-input ../
 
+      - name: Generate requirements
+        working-directory: .tmp/python_service
+        run: tox run -m requirements
+
       - name: Run tox
         working-directory: .tmp/python_service
         run: tox
diff --git a/README.md b/README.md
index ce32ee8..e73ed7b 100644
--- a/README.md
+++ b/README.md
@@ -14,9 +14,8 @@ A generated example can be found at https://github.com/vikahl/python-example
 - Always package the Python code as a library, even if is a service that will
   not be distributed through PyPI. Doing this makes it easy to write tests or
   extend functionality in various directions.
-- Use [Setuptools] as the build system. It is a proven build system that has
-  gotten much better with the static configuration files (`setup.cfg`) and PEP
-  517 compliant builds. I do not see a reason to use another system.
+- Use [Setuptools] as the build system. It is a proven build system that
+  supports the latest standards. I do not see a reason to use another system.
 - Use Github Actions to run tests configured in tox and build and upload to
   PyPI for libraries.
 - Selection for library, cli and/or service support.
@@ -28,12 +27,13 @@ A generated example can be found at https://github.com/vikahl/python-example
   package.
 - __module_name__: Project name, following specification in [PEP 508]. Will be
   suggested based on the project name.
-- __author__: Name of the project author. Added in package metadata (setup.cfg)
+- __author__: Name of the project author. Added in package metadata
+    (pyproject.toml)
   and in some cases the license.
-- __email__: Email for the project author. Added in package metadata (setup.cfg).
-- __homepage__: Homepage for the project. Added in package metadata (setup.cfg).
+- __email__: Email for the project author. Added in package metadata (pyproject.toml).
+- __homepage__: Homepage for the project. Added in package metadata (pyproject.toml).
 - __license__: Select a license for the project. Will add a trove classifier
-  (in setup.cfg) and a license file. If another license is needed they can be
+  (in pyproject.toml) and a license file. If another license is needed they can be
   replaced later.
 - __version__: Initial version.
 - __min_python__: Minimum Python version that is supported. Tox will generate
@@ -42,20 +42,20 @@ A generated example can be found at https://github.com/vikahl/python-example
 - __library__: Toggle library functions, adds a Github workflow for uploading
   to PyPi.
 - __cli__: Toggle cli functions, adds a basic cli (based on Typer) with
-  entrypoint defined in setup.cfg.
+  entrypoint defined in pyproject.toml.
 - __service__: Toggle service functions, adds a dockerfile and instructions on
   compiled requirements.
 
 ## Linters and tools
 
 _A note about configs_: This template aims to collect all configuration in
-`pyproject.toml`, except for Setuptools which uses `setup.cfg` and tox which
-uses `tox.ini` (until tox better supports pyproject.toml).
+`pyproject.toml`, except for tox which uses `tox.ini` until tox better supports
+pyproject.toml.
 
 The linters and formatters are configured in tox and can be invoked by running
 `tox`. Github Actions ensures the same linters and formatters are run in CI.
 
-- [Setuptools]: Packaging tool. Uses `setup.cfg` for package configuration.
+- [Setuptools]: Packaging tool. Uses `pyproject.toml` for package configuration.
 - [tox](https://tox.wiki/en/latest/): Test automation framework. Run in Github
   actions and can be run locally.
 - [Black](https://github.com/psf/black): Code formatter, formats the code in a
diff --git a/cookiecutter.json b/cookiecutter.json
index 8442816..4953b23 100644
--- a/cookiecutter.json
+++ b/cookiecutter.json
@@ -1,5 +1,5 @@
 {
-  "h": "]\nA reasonable modern Python project template.\n\n- __project_name__: Human friendly name for the project.\n- __description__: Short description of the project. Added to the README and\n  package.\n- __module_name__: Project name, following specification in [PEP 508]. Will be\n  suggested based on the project name.\n- __author__: Name of the project author. Added in package metadata (setup.cfg)\n  and in some cases the license.\n- __email__: Email for the project author. Added in package metadata (setup.cfg).\n- __homepage__: Homepage for the project. Added in package metadata (setup.cfg).\n- __license__: Select a license for the project. Will add a trove classifier\n  (in setup.cfg) and a license file. If another license is needed they can be\n  replaced later.\n- __version__: Initial version.\n- __min_python__: Minimum Python version that is supported. Tox will generate\n  test environments for all newer versions. Backported modules might be used\n  for older Python versions.\n- __library__: Toggle library functions, adds a Github workflow for uploading\n  to PyPi.\n- __cli__: Toggle cli functions, adds a basic cli (based on Typer) with\n  entrypoint defined in setup.cfg.\n- __service__: Toggle service functions, adds a dockerfile and instructions on\n  compiled requirements.\n\n [Press enter to continue",
+  "h": "]\nA reasonable modern Python project template.\n\n- __project_name__: Human friendly name for the project.\n- __description__: Short description of the project. Added to the README and\n  package.\n- __module_name__: Project name, following specification in [PEP 508]. Will be\n  suggested based on the project name.\n- __author__: Name of the project author. Added in package metadata (pyproject.toml)\n  and in some cases the license.\n- __email__: Email for the project author. Added in package metadata (pyproject.toml).\n- __homepage__: Homepage for the project. Added in package metadata (pyproject.toml).\n- __license__: Select a license for the project. Will add a trove classifier\n  (in pyproject.toml) and a license file. If another license is needed they can be\n  replaced later.\n- __version__: Initial version.\n- __min_python__: Minimum Python version that is supported. Tox will generate\n  test environments for all newer versions. Backported modules might be used\n  for older Python versions.\n- __library__: Toggle library functions, adds a Github workflow for uploading\n  to PyPi.\n- __cli__: Toggle cli functions, adds a basic cli (based on Typer) with\n  entrypoint defined in pyproject.toml.\n- __service__: Toggle service functions, adds a dockerfile and instructions on\n  compiled requirements.\n\n [Press enter to continue",
 
   "project_name": "Python project template",
   "description": "",
@@ -11,7 +11,7 @@
     "Apache - explicitly grants patent rights",
     "GPL - ensures that code based on this is shared with the same terms"],
   "version": "0.0.1",
-  "min_python": "3.7",
+  "min_python": "3.8",
 
   "library": ["y", "n"],
   "cli": ["n", "y"],
diff --git a/tests/lib.yaml b/tests/lib.yaml
index 4b5f6cd..ab98295 100644
--- a/tests/lib.yaml
+++ b/tests/lib.yaml
@@ -8,7 +8,7 @@ default_context:
     homepage: "example.com"
     license: "MIT - simple and permissive"
     version: "1.0.0"
-    min_python: "3.7"
+    min_python: "3.8"
     library: "y"
     cli: "n"
     service: "n"
diff --git a/tests/service.yaml b/tests/service.yaml
index 409f5d9..41cfd2b 100644
--- a/tests/service.yaml
+++ b/tests/service.yaml
@@ -8,7 +8,7 @@ default_context:
     homepage: ""
     license: "GPL - ensures that code based on this is shared with the same terms"
     version: "0.0.1"
-    min_python: "3.7"
+    min_python: "3.8"
     library: "n"
     cli: "n"
     service: "y"
diff --git a/{{cookiecutter.module_name}}/.github/workflows/test.yml b/{{cookiecutter.module_name}}/.github/workflows/test.yml
index e529076..76a27f3 100644
--- a/{{cookiecutter.module_name}}/.github/workflows/test.yml
+++ b/{{cookiecutter.module_name}}/.github/workflows/test.yml
@@ -1,9 +1,5 @@
 # This workflow runs the test suite defined in tox.
 #
-# Note the python-version matrix, if new Python versions are wanted they need
-# to be added in this matrix AS WELL as in the tox.ini file for
-# "tox-gh-actions". Read more about tox-gh-actions on
-# https://github.com/ymyzk/tox-gh-actions
 name: Test package
 
 on:
@@ -15,26 +11,23 @@ on:
 jobs:
   run-tests:
     runs-on: ubuntu-latest
-    strategy:
-      matrix:
-        python-version: [{%- for version in (range(cookiecutter.min_python | replace('3.', '') | int, 11)) -%}'3.{{ version }}'{{ ", " if not loop.last else ""}}{%- endfor %}]
 
-    {% raw -%}
     steps:
-    - uses: actions/checkout@v2
-    - name: Set up Python ${{ matrix.python-version }}
-      uses: actions/setup-python@v2
+    - uses: actions/checkout@v3
+    - name: Set up Python
+      uses: actions/setup-python@v4
       with:
-        python-version: ${{ matrix.python-version }}
+        python-version: |
+{% for version in (range(cookiecutter.min_python | replace('3.', '') | int, 11)) -%}
+  {{10 * " "}}3.{{ version }}{{ "\n" if not loop.last else ""}}
+{%- endfor %}
 
       # To get completely reproducible builds these dependencies should be
       # pinned. For most smaller projects it should be ok to leave them
-      # unpinend as they are stable projects.
+      # unpinned as they are stable projects.
     - name: Install dependencies
       run: |
-        python -m pip install --upgrade pip
-        pip install tox tox-gh-actions
+        pip install tox
 
     - name: Run tox
       run: tox
-    {%- endraw %}
diff --git a/{{cookiecutter.module_name}}/.github/workflows/{% if cookiecutter.library == 'y' -%} publish.yml {%- endif %} b/{{cookiecutter.module_name}}/.github/workflows/{% if cookiecutter.library == 'y' -%} publish.yml {%- endif %}
index 5e1b687..fe42712 100644
--- a/{{cookiecutter.module_name}}/.github/workflows/{% if cookiecutter.library == 'y' -%} publish.yml {%- endif %}	
+++ b/{{cookiecutter.module_name}}/.github/workflows/{% if cookiecutter.library == 'y' -%} publish.yml {%- endif %}	
@@ -16,9 +16,9 @@ jobs:
     runs-on: ubuntu-latest
 
     steps:
-    - uses: actions/checkout@v2
+    - uses: actions/checkout@v3
     - name: Set up Python
-      uses: actions/setup-python@v2
+      uses: actions/setup-python@v4
       with:
         python-version: '3.x'
 
@@ -27,14 +27,13 @@ jobs:
       # unpinend as they are stable projects.
     - name: Install dependencies
       run: |
-        python -m pip install --upgrade pip
         pip install build
 
     - name: Build package
       run: python -m build
 
     - name: Publish package
-      uses: pypa/gh-action-pypi-publish@27b31702a0e7fc50959f5ad993c78deac1bdfc29
+      uses: pypa/gh-action-pypi-publish@release/v1
       with:
         user: __token__
         password: ${{ secrets.PYPI_API_TOKEN }}
diff --git a/{{cookiecutter.module_name}}/.github/workflows/{% if cookiecutter.library == 'y' -%} test-build.yml {%- endif %} b/{{cookiecutter.module_name}}/.github/workflows/{% if cookiecutter.library == 'y' -%} test-build.yml {%- endif %}
index 4a3ff9b..3e196b8 100644
--- a/{{cookiecutter.module_name}}/.github/workflows/{% if cookiecutter.library == 'y' -%} test-build.yml {%- endif %}	
+++ b/{{cookiecutter.module_name}}/.github/workflows/{% if cookiecutter.library == 'y' -%} test-build.yml {%- endif %}	
@@ -12,9 +12,9 @@ jobs:
     runs-on: ubuntu-latest
 
     steps:
-    - uses: actions/checkout@v2
+    - uses: actions/checkout@v3
     - name: Set up Python
-      uses: actions/setup-python@v2
+      uses: actions/setup-python@v4
       with:
         python-version: '3.x'
 
@@ -23,7 +23,6 @@ jobs:
       # unpinend as they are stable projects.
     - name: Install dependencies
       run: |
-        python -m pip install --upgrade pip
         pip install build twine
 
     - name: Build package
diff --git a/{{cookiecutter.module_name}}/pyproject.toml b/{{cookiecutter.module_name}}/pyproject.toml
index 56c82f0..a4ed58a 100644
--- a/{{cookiecutter.module_name}}/pyproject.toml
+++ b/{{cookiecutter.module_name}}/pyproject.toml
@@ -1,9 +1,92 @@
 [build-system]
-# >= 51 is required since "entry_points" in setup.cfg was added in this
-# version.
-requires = ["setuptools>=51.0", "wheel"]
+requires = ["setuptools>=61.0", "wheel"]
 build-backend = "setuptools.build_meta"
 
+[project]
+name = "{{ cookiecutter.module_name }}"
+description = "{{ cookiecutter.description }}"
+{% if cookiecutter.author or cookiecutter.email -%}
+authors = [
+    { {% if cookiecutter.author -%} name = "{{ cookiecutter.author }}",{% endif -%}{% if cookiecutter.email -%} email = "{{ cookiecutter.email }}" {% endif -%} }
+]
+{% endif -%}
+{%- if cookiecutter.homepage %}
+urls = { homepage = "{{ cookiecutter.homepage }}" }
+{% endif -%}
+
+classifiers = [
+    "Development Status :: 4 - Beta",
+    "Programming Language :: Python",
+    "Programming Language :: Python :: 3",
+    {%- for version in (range(cookiecutter.min_python | replace('3.', '') | int, 11) | list) %}
+    "Programming Language :: Python :: 3.{{ version }}",
+    {%- endfor %}
+    {%- if cookiecutter.license == "MIT - simple and permissive" %}
+    "License :: OSI Approved :: MIT License"
+    {%- elif cookiecutter.license == "Apache - explicitly grants patent rights" %}
+    "License :: OSI Approved :: Apache Software License"
+    {%- elif cookiecutter.license == "GPL - ensures that code based on this is shared with the same terms" %}
+    "License :: OSI Approved :: GNU General Public License v3 or later (GPLv3+)"
+    {%- endif %}
+]
+dynamic = ["version", "readme"]
+
+requires-python = ">={{ cookiecutter.min_python }}"
+
+# Specify the packages required by the project. For libraries, the constraints
+# should be loosely defined as too narrow constraints will make it hard to
+# install the package together with other libraries and will prevent users from
+# getting security updates.
+{% if cookiecutter.service == "y" %}
+# For services, the dependencies (including transitive) should be compiled with
+# pip-tools. See requirements.txt for details.
+{% elif cookiecutter.cli == "y" -%}
+dependencies = [
+  "typer"
+]
+{% else %}
+# dependencies = [
+# "some_package"
+# ]
+{%- endif %}
+
+[project.optional-dependencies]
+# pip-compile doesn't work well with extras referencing the package itself when
+# hashes are required, as the package itself will be added to the list.
+# Therefore the dependency groups "dev" is just for developer convenience and
+# should not list dependencies itself. The compilation in tox lists all extras
+# explicitly (i.e., --extra format,lint,types,test
+dev = [ # All dev dependencies
+    "{{ cookiecutter.module_name }}[format]",
+    "{{ cookiecutter.module_name }}[lint]",
+    "{{ cookiecutter.module_name }}[test]",
+]
+format = [
+  "black",
+  "isort"
+]
+lint = [
+    "black",
+    "isort",
+    "pylint"
+]
+types = [
+    "mypy"
+]
+test = [
+    "pytest",
+    "pytest-cov"
+]
+
+{%- if cookiecutter.cli == "y" %}
+[project.scripts]
+{{ cookiecutter.module_name }} = "{{ cookiecutter.module_name }}:app"
+{%- endif %}
+
+[tool.setuptools.dynamic]
+version = {attr = "{{ cookiecutter.module_name }}.__version__"}
+readme = {file = "README.md", content-type = "text/markdown"}
+
 [tool.isort]
 # For compatibility with Black
 profile = "black"
@@ -36,7 +119,7 @@ source = ["src", ".tox/*/site-packages/"]
 show_missing = true
 
 [tool.pylint.'FORMAT']
-# Black defaults to 88 character line length, 
+# Black defaults to 88 character line length,
 max-line-length = 88
 
 [tool.pylint.'MESSAGES_CONTROL']
diff --git a/{{cookiecutter.module_name}}/requirements-dev.txt b/{{cookiecutter.module_name}}/requirements-dev.txt
deleted file mode 100644
index 94b82c8..0000000
--- a/{{cookiecutter.module_name}}/requirements-dev.txt
+++ /dev/null
@@ -1,14 +0,0 @@
--e .
-
-black==21.12b0
-isort==5.10.1
-
-pylint==2.12.2
-mypy==0.930
-
-pytest==6.2.5
-pytest-cov==3.0.0
-
-{% if cookiecutter.service == "y" -%}
-pip-tools==6.4.0
-{% endif %}
diff --git a/{{cookiecutter.module_name}}/setup.cfg b/{{cookiecutter.module_name}}/setup.cfg
deleted file mode 100644
index 48e13c1..0000000
--- a/{{cookiecutter.module_name}}/setup.cfg
+++ /dev/null
@@ -1,64 +0,0 @@
-[metadata]
-name = {{ cookiecutter.module_name }}
-version = attr: {{ cookiecutter.module_name }}.__version__
-description = {{ cookiecutter.description }}
-long_description = file:README.md
-long_description_content_type = text/markdown
-{% if cookiecutter.author -%}
-author = {{ cookiecutter.author }}
-{% endif -%}
-{% if cookiecutter.email -%}
-author_email = {{ cookiecutter.email }}
-{% endif -%}
-{% if cookiecutter.homepage -%}
-url = {{ cookiecutter.homepage }}
-{% endif -%}
-classifiers = 
-  Development Status :: 4 - Beta
-  Programming Language :: Python
-  Programming Language :: Python :: 3
-  {%- for version in (range(cookiecutter.min_python | replace('3.', '') | int, 11) | list) %}
-  Programming Language :: Python :: 3.{{ version }}
-  {%- endfor %}
-  {%- if cookiecutter.license == "MIT - simple and permissive" %}
-  License :: OSI Approved :: MIT License
-  {%- elif cookiecutter.license == "Apache - explicitly grants patent rights" %}
-  License :: OSI Approved :: Apache Software License
-  {%- elif cookiecutter.license == "GPL - ensures that code based on this is shared with the same terms" %}
-  License :: OSI Approved :: GNU General Public License v3 or later (GPLv3+)
-  {%- endif %}
-
-[options]
-python_requires = >= {{ cookiecutter.min_python }}
-
-# Specify the packages required by the project. For libraries, the constraints
-# should be loosely defined as too narrow constraints will make it hard to
-# install the package together with other libraries and will prevent users from
-# getting security updates.
-{% if cookiecutter.service == "y" -%}
-# For services, the dependencies (including transitive) should be compiled with
-# pip-tools. See requirements.txt for details.
-{%- endif %}
-{% if cookiecutter.cli == "y" -%}
-install_requires = 
-  typer<1
-{% else -%}
-# install_requires =
-#   some_package>1,<2
-{%- endif %}
-
-# Find the packages in the src folder.
-packages = find:
-package_dir = 
-  =src
-
-[options.packages.find]
-where = src
-
-{% if cookiecutter.cli == "y" %}
-# Define the entrypoints/cli command for the project. Multiple entrypoints can
-# be defined.
-[options.entry_points]
-console_scripts = 
-  {{ cookiecutter.module_name }} = {{ cookiecutter.module_name }}:app
-{%- endif %}
diff --git a/{{cookiecutter.module_name}}/tox.ini b/{{cookiecutter.module_name}}/tox.ini
index 085dc2a..58784b7 100644
--- a/{{cookiecutter.module_name}}/tox.ini
+++ b/{{cookiecutter.module_name}}/tox.ini
@@ -4,45 +4,46 @@
 envlist =
   lint,
   lint-format,
-  types,  
+  types,
 {%- if cookiecutter.library == "y" %}
 # It is good practice to test the library for all supported versions.
-{%- for version in range(cookiecutter.min_python | replace('3.', '') | int, 11) %}
+{%- for version in range(cookiecutter.min_python | replace('3.', '') | int, 12) %}
   py3{{ version }}{{ "," if not loop.last else "" }}
 {%- endfor %}
 {%- else %}
   py3{{ cookiecutter.min_python | replace('3.', '') }}
 {%- endif %}
-isolated_build = true
-
-[gh-actions]
-# Config for mapping gh-actions to environment. See tox-gh-actions for details
-# https://github.com/ymyzk/tox-gh-actions
-python = 
-{%- for version in range(cookiecutter.min_python | replace('3.', '') | int, 11) %}
-  3.{{ version }}: py3{{ version }}
-  {%- if version == (cookiecutter.min_python | replace('3.', '') | int) -%}
-    , lint, lint-format, types
-  {%- endif -%}
-{%- endfor %}
+min_version = 4.0
 
 [testenv]
 # Run pytest and measure coverage.
-deps = -r{toxinidir}/requirements-dev.txt
-commands = 
+{% if cookiecutter.service == "y" %}
+deps = -r{toxinidir}/requirements/requirements-{envname}-dev.txt
+{%- else %}
+extras = test
+{% endif %}
+commands =
   pytest --cov={{ cookiecutter.module_name }} --cov-report=xml
 
 [testenv:lint]
 # Run the linter for both src and tests folders.
 basepython = python{{ cookiecutter.min_python }}
-deps = -r{toxinidir}/requirements-dev.txt
+{%- if cookiecutter.service == "y" %}
+deps = -r{toxinidir}/requirements/requirements-py{{ cookiecutter.min_python | replace ('.', '') }}-dev.txt
+{%- else %}
+extras = lint, test
+{%- endif %}
 commands =
   pylint {toxinidir}/src/{{ cookiecutter.module_name }} {toxinidir}/tests
 
-[testenv:list-format]
+[testenv:lint-format]
 # Check the code format by running black and isort in check mode.
 basepython = python{{ cookiecutter.min_python }}
-deps = -r{toxinidir}/requirements-dev.txt
+{%- if cookiecutter.service == "y" %}
+deps = -r{toxinidir}/requirements/requirements-py{{ cookiecutter.min_python | replace ('.', '') }}-dev.txt
+{%- else %}
+extras = format, test
+{%- endif %}
 commands =
   black --diff --check {toxinidir}
   isort --diff --check-only {toxinidir}
@@ -51,7 +52,11 @@ commands =
 # Run mypy linter. Mypy needs to be run in src and tests separately to not
 # cause errors with imports.
 basepython = python{{ cookiecutter.min_python }}
-deps = -r{toxinidir}/requirements-dev.txt
+{%- if cookiecutter.service == "y" %}
+deps = -r{toxinidir}/requirements/requirements-py{{ cookiecutter.min_python | replace ('.', '') }}-dev.txt
+{%- else %}
+extras = types, test
+{%- endif %}
 commands =
   mypy {toxinidir}/src
   mypy {toxinidir}/tests
@@ -60,7 +65,40 @@ commands =
 # Applies the formatting from black and isort. Not run by default when invoking
 # tox but provides an easy way to fix format errors. Run with tox -e format
 basepython = python{{ cookiecutter.min_python }}
-deps = -r{toxinidir}/requirements-dev.txt
+{%- if cookiecutter.service == "y" %}
+deps = -r{toxinidir}/requirements/requirements-py{{ cookiecutter.min_python | replace ('.', '') }}-dev.txt
+{%- else %}
+extras = format, test
+{%- endif %}
 commands =
   black {toxinidir}
   isort {toxinidir}
+
+{% if cookiecutter.service == "y" -%}
+[testenv:requirements-py{38,39,310,311}]
+; Generate new requirements files
+; only run this on linux as compiled requirements are platform dependent and
+; this code is deployed in linux containers.
+; Would be better to only run this on a specific processor architecture, but
+; this is not supported in tox at the moment.
+labels = requirements
+platform = linux
+deps = pip-tools
+skip_install = true
+setenv =
+  ; will show `tox run -m requirements` in the top of the generated files.
+  CUSTOM_COMPILE_COMMAND='tox run -m requirements'
+commands =
+; ensure that the requirements-folder exists
+  python3 -c 'import pathlib;pathlib.Path("requirements").mkdir(exist_ok=True)'
+; explanation of flags used
+; --upgrade: upgrade all dependencies to latest version. normally pip-compile
+;   change as little as possible, but without constraints it means that
+;   it will never update transitive dependencies.
+; --resolver backtracking: use the "new" improved backtracking resolver from
+;   pip. this will be default in pip-tools 7.
+; --allow-unsafe: allow the "unsafe" packages, which will be default behaviour
+;   in upcoming pip-tools version.
+  pip-compile --upgrade --generate-hashes --resolver backtracking --allow-unsafe pyproject.toml --output-file requirements/{envname}.txt
+  pip-compile --extra format,lint,types,test --upgrade --generate-hashes --resolver backtracking --allow-unsafe pyproject.toml --output-file requirements/{envname}-dev.txt
+{% endif -%}
diff --git a/{{cookiecutter.module_name}}/{% if cookiecutter.service == 'y' -%} Dockerfile {%- endif %} b/{{cookiecutter.module_name}}/{% if cookiecutter.service == 'y' -%} Dockerfile {%- endif %}
index da69db3..0cb8dd2 100644
--- a/{{cookiecutter.module_name}}/{% if cookiecutter.service == 'y' -%} Dockerfile {%- endif %}	
+++ b/{{cookiecutter.module_name}}/{% if cookiecutter.service == 'y' -%} Dockerfile {%- endif %}	
@@ -55,21 +55,25 @@ COPY --chown=1000:1000 requirements.txt .
 # RUN apt-get update \
 #   && apt-get install -y --no-install-recommends build-essential \
 #   && rm -rf /var/lib/apt/lists/* \
-#   && pip3 install --no-cache-dir -r requirements.txt \
+# Use --no-deps as the requirements-file already contains all dependencies (as it is a compiled file).
+# Require hashes to ensure no meddling occurs.
+#   && pip3 install --no-deps --require-hashes --no-cache-dir -r requirements.txt \
 #   && rm requirements.txt \
 #   && apt-get purge -y build-essential
 
 # ALTERNATIVE 2: Just install them
-RUN pip3 install --no-cache-dir -r requirements.txt \
+# Use --no-deps as the requirements-file already contains all dependencies (as it is a compiled file).
+# Require hashes to ensure no meddling occurs.
+RUN pip3 install --no-deps --require-hashes --no-cache-dir -r requirements.txt \
   && rm requirements.txt
 
 # Set the user
 USER {{ cookiecutter.module_name }}
 
 # Copy the run.py entrypoint.
-# One alternative solution is to specify an entrpoint in setup.cfg and run the
-# service as a cli command. This needs to be modified if the service is started
-# with another command (e.g., gunicorn).
+# One alternative solution is to specify an entrpoint in pyproject.toml and run
+# the service as a cli command. This needs to be modified if the service is
+# started with another command (e.g., gunicorn).
 COPY --chown=1000:1000 src/run.py .
 
 # Run the service. This needs to be modified if the service is started with
diff --git a/{{cookiecutter.module_name}}/{% if cookiecutter.service == 'y' -%} requirements.txt {%- endif %} b/{{cookiecutter.module_name}}/{% if cookiecutter.service == 'y' -%} requirements.txt {%- endif %}
deleted file mode 100644
index 80ef643..0000000
--- a/{{cookiecutter.module_name}}/{% if cookiecutter.service == 'y' -%} requirements.txt {%- endif %}	
+++ /dev/null
@@ -1,8 +0,0 @@
-# This file is generated with pip-tools and contains pinned versions of all
-# dependencies, either directly specified in setup.cfg or transitive. This
-# makes the installation reproducible by ensuring that all dependencies matches
-# version.
-#
-# The file can updated by running:
-# 
-#     pip-compile setup.cfg