diff --git a/changelog.d/3392.change.rst b/changelog.d/3392.change.rst
new file mode 100644
index 0000000000..8ae7fd90de
--- /dev/null
+++ b/changelog.d/3392.change.rst
@@ -0,0 +1,5 @@
+Exposed ``get_output_mapping()`` from ``build_py`` and ``build_ext``
+subcommands. This interface is reserved for the use of ``setuptools``
+Extensions and third part packages are explicitly disallowed to calling it.
+However, any implementation overwriting ``build_py`` or ``build_ext`` are
+required to honour this interface.
diff --git a/setuptools/command/build_ext.py b/setuptools/command/build_ext.py
index 1719d17a21..31ef47bf3e 100644
--- a/setuptools/command/build_ext.py
+++ b/setuptools/command/build_ext.py
@@ -2,13 +2,16 @@
 import sys
 import itertools
 from importlib.machinery import EXTENSION_SUFFIXES
+from importlib.util import cache_from_source as _compiled_file_name
+from typing import Dict, Iterator, List, Tuple
+
 from distutils.command.build_ext import build_ext as _du_build_ext
 from distutils.ccompiler import new_compiler
 from distutils.sysconfig import customize_compiler, get_config_var
-from distutils.errors import DistutilsError
 from distutils import log
 
-from setuptools.extension import Library
+from setuptools.errors import BaseError
+from setuptools.extension import Extension, Library
 
 try:
     # Attempt to use Cython for building extensions, if available
@@ -72,6 +75,9 @@ def get_abi3_suffix():
 
 
 class build_ext(_build_ext):
+    editable_mode: bool = False
+    inplace: bool = False
+
     def run(self):
         """Build extensions in build directory, then copy if --inplace"""
         old_inplace, self.inplace = self.inplace, 0
@@ -80,24 +86,61 @@ def run(self):
         if old_inplace:
             self.copy_extensions_to_source()
 
+    def _get_inplace_equivalent(self, build_py, ext: Extension) -> Tuple[str, str]:
+        fullname = self.get_ext_fullname(ext.name)
+        filename = self.get_ext_filename(fullname)
+        modpath = fullname.split('.')
+        package = '.'.join(modpath[:-1])
+        package_dir = build_py.get_package_dir(package)
+        inplace_file = os.path.join(package_dir, os.path.basename(filename))
+        regular_file = os.path.join(self.build_lib, filename)
+        return (inplace_file, regular_file)
+
     def copy_extensions_to_source(self):
         build_py = self.get_finalized_command('build_py')
         for ext in self.extensions:
-            fullname = self.get_ext_fullname(ext.name)
-            filename = self.get_ext_filename(fullname)
-            modpath = fullname.split('.')
-            package = '.'.join(modpath[:-1])
-            package_dir = build_py.get_package_dir(package)
-            dest_filename = os.path.join(package_dir,
-                                         os.path.basename(filename))
-            src_filename = os.path.join(self.build_lib, filename)
+            inplace_file, regular_file = self._get_inplace_equivalent(build_py, ext)
 
             # Always copy, even if source is older than destination, to ensure
             # that the right extensions for the current Python/platform are
             # used.
-            build_py.copy_file(src_filename, dest_filename)
+            build_py.copy_file(regular_file, inplace_file)
+
+            if ext._needs_stub:
+                inplace_stub = self._get_equivalent_stub(ext, inplace_file)
+                self._write_stub_file(inplace_stub, ext, compile=True)
+                # Always compile stub and remove the original (leave the cache behind)
+                # (this behaviour was observed in previous iterations of the code)
+
+    def _get_equivalent_stub(self, ext: Extension, output_file: str) -> str:
+        dir_ = os.path.dirname(output_file)
+        _, _, name = ext.name.rpartition(".")
+        return f"{os.path.join(dir_, name)}.py"
+
+    def _get_output_mapping(self) -> Iterator[Tuple[str, str]]:
+        if not self.inplace:
+            return
+
+        build_py = self.get_finalized_command('build_py')
+        opt = self.get_finalized_command('install_lib').optimize or ""
+
+        for ext in self.extensions:
+            inplace_file, regular_file = self._get_inplace_equivalent(build_py, ext)
+            yield (regular_file, inplace_file)
+
             if ext._needs_stub:
-                self.write_stub(package_dir or os.curdir, ext, True)
+                # This version of `build_ext` always builds artifacts in another dir,
+                # when "inplace=True" is given it just copies them back.
+                # This is done in the `copy_extensions_to_source` function, which
+                # always compile stub files via `_compile_and_remove_stub`.
+                # At the end of the process, a `.pyc` stub file is created without the
+                # corresponding `.py`.
+
+                inplace_stub = self._get_equivalent_stub(ext, inplace_file)
+                regular_stub = self._get_equivalent_stub(ext, regular_file)
+                inplace_cache = _compiled_file_name(inplace_stub, optimization=opt)
+                output_cache = _compiled_file_name(regular_stub, optimization=opt)
+                yield (output_cache, inplace_cache)
 
     def get_ext_filename(self, fullname):
         so_ext = os.getenv('SETUPTOOLS_EXT_SUFFIX')
@@ -127,6 +170,7 @@ def initialize_options(self):
         self.shlib_compiler = None
         self.shlibs = []
         self.ext_map = {}
+        self.editable_mode = False
 
     def finalize_options(self):
         _build_ext.finalize_options(self)
@@ -157,6 +201,9 @@ def finalize_options(self):
             if ltd and use_stubs and os.curdir not in ext.runtime_library_dirs:
                 ext.runtime_library_dirs.append(os.curdir)
 
+        if self.editable_mode:
+            self.inplace = True
+
     def setup_shlib_compiler(self):
         compiler = self.shlib_compiler = new_compiler(
             compiler=self.compiler, dry_run=self.dry_run, force=self.force
@@ -197,8 +244,8 @@ def build_extension(self, ext):
                 self.compiler = self.shlib_compiler
             _build_ext.build_extension(self, ext)
             if ext._needs_stub:
-                cmd = self.get_finalized_command('build_py').build_lib
-                self.write_stub(cmd, ext)
+                build_lib = self.get_finalized_command('build_py').build_lib
+                self.write_stub(build_lib, ext)
         finally:
             self.compiler = _compiler
 
@@ -211,8 +258,15 @@ def links_to_dynamic(self, ext):
         pkg = '.'.join(ext._full_name.split('.')[:-1] + [''])
         return any(pkg + libname in libnames for libname in ext.libraries)
 
-    def get_outputs(self):
-        return _build_ext.get_outputs(self) + self.__get_stubs_outputs()
+    def get_outputs(self) -> List[str]:
+        if self.inplace:
+            return list(self.get_output_mapping().keys())
+        return sorted(_build_ext.get_outputs(self) + self.__get_stubs_outputs())
+
+    def get_output_mapping(self) -> Dict[str, str]:
+        """See :class:`setuptools.commands.build.SubCommand`"""
+        mapping = self._get_output_mapping()
+        return dict(sorted(mapping, key=lambda x: x[0]))
 
     def __get_stubs_outputs(self):
         # assemble the base name for each extension that needs a stub
@@ -232,12 +286,13 @@ def __get_output_extensions(self):
             yield '.pyo'
 
     def write_stub(self, output_dir, ext, compile=False):
-        log.info("writing stub loader for %s to %s", ext._full_name,
-                 output_dir)
-        stub_file = (os.path.join(output_dir, *ext._full_name.split('.')) +
-                     '.py')
+        stub_file = os.path.join(output_dir, *ext._full_name.split('.')) + '.py'
+        self._write_stub_file(stub_file, ext, compile)
+
+    def _write_stub_file(self, stub_file: str, ext: Extension, compile=False):
+        log.info("writing stub loader for %s to %s", ext._full_name, stub_file)
         if compile and os.path.exists(stub_file):
-            raise DistutilsError(stub_file + " already exists! Please delete.")
+            raise BaseError(stub_file + " already exists! Please delete.")
         if not self.dry_run:
             f = open(stub_file, 'w')
             f.write(
@@ -270,16 +325,19 @@ def write_stub(self, output_dir, ext, compile=False):
             )
             f.close()
         if compile:
-            from distutils.util import byte_compile
+            self._compile_and_remove_stub(stub_file)
+
+    def _compile_and_remove_stub(self, stub_file: str):
+        from distutils.util import byte_compile
 
-            byte_compile([stub_file], optimize=0,
+        byte_compile([stub_file], optimize=0,
+                     force=True, dry_run=self.dry_run)
+        optimize = self.get_finalized_command('install_lib').optimize
+        if optimize > 0:
+            byte_compile([stub_file], optimize=optimize,
                          force=True, dry_run=self.dry_run)
-            optimize = self.get_finalized_command('install_lib').optimize
-            if optimize > 0:
-                byte_compile([stub_file], optimize=optimize,
-                             force=True, dry_run=self.dry_run)
-            if os.path.exists(stub_file) and not self.dry_run:
-                os.unlink(stub_file)
+        if os.path.exists(stub_file) and not self.dry_run:
+            os.unlink(stub_file)
 
 
 if use_stubs or os.name == 'nt':
diff --git a/setuptools/command/build_py.py b/setuptools/command/build_py.py
index 9575cdf868..a2a6fe2cc8 100644
--- a/setuptools/command/build_py.py
+++ b/setuptools/command/build_py.py
@@ -11,6 +11,8 @@
 import stat
 import warnings
 from pathlib import Path
+from typing import Dict, Iterator, List, Optional, Tuple
+
 from setuptools._deprecation_warning import SetuptoolsDeprecationWarning
 from setuptools.extern.more_itertools import unique_everseen
 
@@ -28,6 +30,8 @@ class build_py(orig.build_py):
     Also, this version of the 'build_py' command allows you to specify both
     'py_modules' and 'packages' in the same setup operation.
     """
+    editable_mode: bool = False
+    existing_egg_info_dir: Optional[str] = None  #: Private API, internal use only.
 
     def finalize_options(self):
         orig.build_py.finalize_options(self)
@@ -50,7 +54,8 @@ def copy_file(self, infile, outfile, preserve_mode=1, preserve_times=1,
 
     def run(self):
         """Build modules, packages, and copy data files to build directory"""
-        if not self.py_modules and not self.packages:
+        # if self.editable_mode or not (self.py_modules and self.packages):
+        if not (self.py_modules or self.packages) or self.editable_mode:
             return
 
         if self.py_modules:
@@ -123,16 +128,41 @@ def find_data_files(self, package, src_dir):
         )
         return self.exclude_data_files(package, src_dir, files)
 
-    def build_package_data(self):
-        """Copy data files into build directory"""
+    def get_outputs(self, include_bytecode=1) -> List[str]:
+        """See :class:`setuptools.commands.build.SubCommand`"""
+        if self.editable_mode:
+            return list(self.get_output_mapping().keys())
+        return super().get_outputs(include_bytecode)
+
+    def get_output_mapping(self) -> Dict[str, str]:
+        """See :class:`setuptools.commands.build.SubCommand`"""
+        mapping = itertools.chain(
+            self._get_package_data_output_mapping(),
+            self._get_module_mapping(),
+        )
+        return dict(sorted(mapping, key=lambda x: x[0]))
+
+    def _get_module_mapping(self) -> Iterator[Tuple[str, str]]:
+        """Iterate over all modules producing (dest, src) pairs."""
+        for (package, module, module_file) in self.find_all_modules():
+            package = package.split('.')
+            filename = self.get_module_outfile(self.build_lib, package, module)
+            yield (filename, module_file)
+
+    def _get_package_data_output_mapping(self) -> Iterator[Tuple[str, str]]:
+        """Iterate over package data producing (dest, src) pairs."""
         for package, src_dir, build_dir, filenames in self.data_files:
             for filename in filenames:
                 target = os.path.join(build_dir, filename)
-                self.mkpath(os.path.dirname(target))
                 srcfile = os.path.join(src_dir, filename)
-                outf, copied = self.copy_file(srcfile, target)
-                make_writable(target)
-                srcfile = os.path.abspath(srcfile)
+                yield (target, srcfile)
+
+    def build_package_data(self):
+        """Copy data files into build directory"""
+        for target, srcfile in self._get_package_data_output_mapping():
+            self.mkpath(os.path.dirname(target))
+            _outf, _copied = self.copy_file(srcfile, target)
+            make_writable(target)
 
     def analyze_manifest(self):
         self.manifest_files = mf = {}
@@ -143,10 +173,19 @@ def analyze_manifest(self):
             # Locate package source directory
             src_dirs[assert_relative(self.get_package_dir(package))] = package
 
-        self.run_command('egg_info')
+        if (
+            getattr(self, 'existing_egg_info_dir', None)
+            and Path(self.existing_egg_info_dir, "SOURCES.txt").exists()
+        ):
+            manifest = Path(self.existing_egg_info_dir, "SOURCES.txt")
+            files = manifest.read_text(encoding="utf-8").splitlines()
+        else:
+            self.run_command('egg_info')
+            ei_cmd = self.get_finalized_command('egg_info')
+            files = ei_cmd.filelist.files
+
         check = _IncludePackageDataAbuse()
-        ei_cmd = self.get_finalized_command('egg_info')
-        for path in ei_cmd.filelist.files:
+        for path in files:
             d, f = os.path.split(assert_relative(path))
             prev = None
             oldf = f
@@ -200,6 +239,8 @@ def check_package(self, package, package_dir):
     def initialize_options(self):
         self.packages_checked = {}
         orig.build_py.initialize_options(self)
+        self.editable_mode = False
+        self.existing_egg_info_dir = None
 
     def get_package_dir(self, package):
         res = orig.build_py.get_package_dir(self, package)
diff --git a/setuptools/extension.py b/setuptools/extension.py
index 64baf1147b..b9a2bad321 100644
--- a/setuptools/extension.py
+++ b/setuptools/extension.py
@@ -113,6 +113,9 @@ class Extension(_Extension):
     :keyword bool optional:
       specifies that a build failure in the extension should not abort the
       build process, but simply not install the failing extension.
+
+    :keyword bool py_limited_api:
+      opt-in flag for the usage of :doc:`Python's limited API <python:c-api/stable>`.
     """
 
     def __init__(self, name, sources, *args, **kw):
diff --git a/setuptools/tests/test_build_ext.py b/setuptools/tests/test_build_ext.py
index 3177a2cdd6..07ebcaf82b 100644
--- a/setuptools/tests/test_build_ext.py
+++ b/setuptools/tests/test_build_ext.py
@@ -2,6 +2,7 @@
 import sys
 import distutils.command.build_ext as orig
 from distutils.sysconfig import get_config_var
+from importlib.util import cache_from_source as _compiled_file_name
 
 from jaraco import path
 
@@ -83,6 +84,97 @@ def test_ext_suffix_override(self):
         finally:
             del os.environ['SETUPTOOLS_EXT_SUFFIX']
 
+    def dist_with_example(self):
+        files = {
+            "src": {"mypkg": {"subpkg": {"ext2.c": ""}}},
+            "c-extensions": {"ext1": {"main.c": ""}},
+        }
+
+        ext1 = Extension("mypkg.ext1", ["c-extensions/ext1/main.c"])
+        ext2 = Extension("mypkg.subpkg.ext2", ["src/mypkg/subpkg/ext2.c"])
+        ext3 = Extension("ext3", ["c-extension/ext3.c"])
+
+        path.build(files)
+        dist = Distribution({
+            "script_name": "%test%",
+            "ext_modules": [ext1, ext2, ext3],
+            "package_dir": {"": "src"},
+        })
+        return dist
+
+    def test_get_outputs(self, tmpdir_cwd, monkeypatch):
+        monkeypatch.setenv('SETUPTOOLS_EXT_SUFFIX', '.mp3')  # make test OS-independent
+        monkeypatch.setattr('setuptools.command.build_ext.use_stubs', False)
+        dist = self.dist_with_example()
+
+        # Regular build: get_outputs not empty, but get_output_mappings is empty
+        build_ext = dist.get_command_obj("build_ext")
+        build_ext.editable_mode = False
+        build_ext.ensure_finalized()
+        build_lib = build_ext.build_lib.replace(os.sep, "/")
+        outputs = [x.replace(os.sep, "/") for x in build_ext.get_outputs()]
+        assert outputs == [
+            f"{build_lib}/ext3.mp3",
+            f"{build_lib}/mypkg/ext1.mp3",
+            f"{build_lib}/mypkg/subpkg/ext2.mp3",
+        ]
+        assert build_ext.get_output_mapping() == {}
+
+        # Editable build: get_output_mappings should contain everything in get_outputs
+        dist.reinitialize_command("build_ext")
+        build_ext.editable_mode = True
+        build_ext.ensure_finalized()
+        mapping = {
+            k.replace(os.sep, "/"): v.replace(os.sep, "/")
+            for k, v in build_ext.get_output_mapping().items()
+        }
+        assert mapping == {
+            f"{build_lib}/ext3.mp3": "src/ext3.mp3",
+            f"{build_lib}/mypkg/ext1.mp3": "src/mypkg/ext1.mp3",
+            f"{build_lib}/mypkg/subpkg/ext2.mp3": "src/mypkg/subpkg/ext2.mp3",
+        }
+
+    def test_get_output_mapping_with_stub(self, tmpdir_cwd, monkeypatch):
+        monkeypatch.setenv('SETUPTOOLS_EXT_SUFFIX', '.mp3')  # make test OS-independent
+        monkeypatch.setattr('setuptools.command.build_ext.use_stubs', True)
+        dist = self.dist_with_example()
+
+        # Editable build should create compiled stubs (.pyc files only, no .py)
+        build_ext = dist.get_command_obj("build_ext")
+        build_ext.editable_mode = True
+        build_ext.ensure_finalized()
+        for ext in build_ext.extensions:
+            monkeypatch.setattr(ext, "_needs_stub", True)
+
+        build_lib = build_ext.build_lib.replace(os.sep, "/")
+        mapping = {
+            k.replace(os.sep, "/"): v.replace(os.sep, "/")
+            for k, v in build_ext.get_output_mapping().items()
+        }
+
+        def C(file):
+            """Make it possible to do comparisons and tests in a OS-independent way"""
+            return _compiled_file_name(file).replace(os.sep, "/")
+
+        assert mapping == {
+            C(f"{build_lib}/ext3.py"): C("src/ext3.py"),
+            f"{build_lib}/ext3.mp3": "src/ext3.mp3",
+            C(f"{build_lib}/mypkg/ext1.py"): C("src/mypkg/ext1.py"),
+            f"{build_lib}/mypkg/ext1.mp3": "src/mypkg/ext1.mp3",
+            C(f"{build_lib}/mypkg/subpkg/ext2.py"): C("src/mypkg/subpkg/ext2.py"),
+            f"{build_lib}/mypkg/subpkg/ext2.mp3": "src/mypkg/subpkg/ext2.mp3",
+        }
+
+        # Ensure only the compiled stubs are present not the raw .py stub
+        assert f"{build_lib}/mypkg/ext1.py" not in mapping
+        assert f"{build_lib}/mypkg/subpkg/ext2.py" not in mapping
+
+        # Visualize what the cached stub files look like
+        example_stub = C(f"{build_lib}/mypkg/ext1.py")
+        assert example_stub in mapping
+        assert example_stub.startswith(f"{build_lib}/mypkg/__pycache__/ext1")
+        assert example_stub.endswith(".pyc")
+
 
 def test_build_ext_config_handling(tmpdir_cwd):
     files = {
diff --git a/setuptools/tests/test_build_py.py b/setuptools/tests/test_build_py.py
index 13fa64de9e..2b32edbc59 100644
--- a/setuptools/tests/test_build_py.py
+++ b/setuptools/tests/test_build_py.py
@@ -1,10 +1,11 @@
 import os
 import stat
 import shutil
+from pathlib import Path
+from unittest.mock import Mock
 
 import pytest
 import jaraco.path
-from path import Path
 
 from setuptools import SetuptoolsDeprecationWarning
 from setuptools.dist import Distribution
@@ -109,67 +110,194 @@ def test_executable_data(tmpdir_cwd):
         "Script is not executable"
 
 
-def test_excluded_subpackages(tmp_path):
-    files = {
-        "setup.cfg": DALS("""
-            [metadata]
-            name = mypkg
-            version = 42
+EXAMPLE_WITH_MANIFEST = {
+    "setup.cfg": DALS("""
+        [metadata]
+        name = mypkg
+        version = 42
 
-            [options]
-            include_package_data = True
-            packages = find:
+        [options]
+        include_package_data = True
+        packages = find:
 
-            [options.packages.find]
-            exclude = *.tests*
-            """),
+        [options.packages.find]
+        exclude = *.tests*
+        """),
+    "mypkg": {
+        "__init__.py": "",
+        "resource_file.txt": "",
+        "tests": {
+            "__init__.py": "",
+            "test_mypkg.py": "",
+            "test_file.txt": "",
+        }
+    },
+    "MANIFEST.in": DALS("""
+        global-include *.py *.txt
+        global-exclude *.py[cod]
+        prune dist
+        prune build
+        prune *.egg-info
+        """)
+}
+
+
+def test_excluded_subpackages(tmpdir_cwd):
+    jaraco.path.build(EXAMPLE_WITH_MANIFEST)
+    dist = Distribution({"script_name": "%PEP 517%"})
+    dist.parse_config_files()
+
+    build_py = dist.get_command_obj("build_py")
+    msg = r"Python recognizes 'mypkg\.tests' as an importable package"
+    with pytest.warns(SetuptoolsDeprecationWarning, match=msg):
+        # TODO: To fix #3260 we need some transition period to deprecate the
+        # existing behavior of `include_package_data`. After the transition, we
+        # should remove the warning and fix the behaviour.
+        build_py.finalize_options()
+        build_py.run()
+
+    build_dir = Path(dist.get_command_obj("build_py").build_lib)
+    assert (build_dir / "mypkg/__init__.py").exists()
+    assert (build_dir / "mypkg/resource_file.txt").exists()
+
+    # Setuptools is configured to ignore `mypkg.tests`, therefore the following
+    # files/dirs should not be included in the distribution.
+    for f in [
+        "mypkg/tests/__init__.py",
+        "mypkg/tests/test_mypkg.py",
+        "mypkg/tests/test_file.txt",
+        "mypkg/tests",
+    ]:
+        with pytest.raises(AssertionError):
+            # TODO: Enforce the following assertion once #3260 is fixed
+            # (remove context manager and the following xfail).
+            assert not (build_dir / f).exists()
+
+    pytest.xfail("#3260")
+
+
+@pytest.mark.filterwarnings("ignore::setuptools.SetuptoolsDeprecationWarning")
+def test_existing_egg_info(tmpdir_cwd, monkeypatch):
+    """When provided with the ``existing_egg_info_dir`` attribute, build_py should not
+    attempt to run egg_info again.
+    """
+    # == Pre-condition ==
+    # Generate an egg-info dir
+    jaraco.path.build(EXAMPLE_WITH_MANIFEST)
+    dist = Distribution({"script_name": "%PEP 517%"})
+    dist.parse_config_files()
+    assert dist.include_package_data
+
+    egg_info = dist.get_command_obj("egg_info")
+    dist.run_command("egg_info")
+    egg_info_dir = next(Path(egg_info.egg_base).glob("*.egg-info"))
+    assert egg_info_dir.is_dir()
+
+    # == Setup ==
+    build_py = dist.get_command_obj("build_py")
+    build_py.finalize_options()
+    egg_info = dist.get_command_obj("egg_info")
+    egg_info_run = Mock(side_effect=egg_info.run)
+    monkeypatch.setattr(egg_info, "run", egg_info_run)
+
+    # == Remove caches ==
+    # egg_info is called when build_py looks for data_files, which gets cached.
+    # We need to ensure it is not cached yet, otherwise it may impact on the tests
+    build_py.__dict__.pop('data_files', None)
+    dist.reinitialize_command(egg_info)
+
+    # == Sanity check ==
+    # Ensure that if existing_egg_info is not given, build_py attempts to run egg_info
+    build_py.existing_egg_info_dir = None
+    build_py.run()
+    egg_info_run.assert_called()
+
+    # == Remove caches ==
+    egg_info_run.reset_mock()
+    build_py.__dict__.pop('data_files', None)
+    dist.reinitialize_command(egg_info)
+
+    # == Actual test ==
+    # Ensure that if existing_egg_info_dir is given, egg_info doesn't run
+    build_py.existing_egg_info_dir = egg_info_dir
+    build_py.run()
+    egg_info_run.assert_not_called()
+    assert build_py.data_files
+
+    # Make sure the list of outputs is actually OK
+    outputs = map(lambda x: x.replace(os.sep, "/"), build_py.get_outputs())
+    assert outputs
+    example = str(Path(build_py.build_lib, "mypkg/__init__.py")).replace(os.sep, "/")
+    assert example in outputs
+
+
+EXAMPLE_ARBITRARY_MAPPING = {
+    "pyproject.toml": DALS("""
+        [project]
+        name = "mypkg"
+        version = "42"
+
+        [tool.setuptools]
+        packages = ["mypkg", "mypkg.sub1", "mypkg.sub2", "mypkg.sub2.nested"]
+
+        [tool.setuptools.package-dir]
+        "" = "src"
+        "mypkg.sub2" = "src/mypkg/_sub2"
+        "mypkg.sub2.nested" = "other"
+        """),
+    "src": {
         "mypkg": {
             "__init__.py": "",
             "resource_file.txt": "",
-            "tests": {
+            "sub1": {
                 "__init__.py": "",
-                "test_mypkg.py": "",
-                "test_file.txt": "",
-            }
+                "mod1.py": "",
+            },
+            "_sub2": {
+                "mod2.py": "",
+            },
         },
-        "MANIFEST.in": DALS("""
-            global-include *.py *.txt
-            global-exclude *.py[cod]
-            prune dist
-            prune build
-            prune *.egg-info
-            """)
-    }
+    },
+    "other": {
+        "__init__.py": "",
+        "mod3.py": "",
+    },
+    "MANIFEST.in": DALS("""
+        global-include *.py *.txt
+        global-exclude *.py[cod]
+        """)
+}
+
 
-    with Path(tmp_path):
-        jaraco.path.build(files)
-        dist = Distribution({"script_name": "%PEP 517%"})
-        dist.parse_config_files()
-
-        build_py = dist.get_command_obj("build_py")
-        msg = r"Python recognizes 'mypkg\.tests' as an importable package"
-        with pytest.warns(SetuptoolsDeprecationWarning, match=msg):
-            # TODO: To fix #3260 we need some transition period to deprecate the
-            # existing behavior of `include_package_data`. After the transition, we
-            # should remove the warning and fix the behaviour.
-            build_py.finalize_options()
-            build_py.run()
-
-        build_dir = Path(dist.get_command_obj("build_py").build_lib)
-        assert (build_dir / "mypkg/__init__.py").exists()
-        assert (build_dir / "mypkg/resource_file.txt").exists()
-
-        # Setuptools is configured to ignore `mypkg.tests`, therefore the following
-        # files/dirs should not be included in the distribution.
-        for f in [
-            "mypkg/tests/__init__.py",
-            "mypkg/tests/test_mypkg.py",
-            "mypkg/tests/test_file.txt",
-            "mypkg/tests",
-        ]:
-            with pytest.raises(AssertionError):
-                # TODO: Enforce the following assertion once #3260 is fixed
-                # (remove context manager and the following xfail).
-                assert not (build_dir / f).exists()
-
-        pytest.xfail("#3260")
+def test_get_outputs(tmpdir_cwd):
+    jaraco.path.build(EXAMPLE_ARBITRARY_MAPPING)
+    dist = Distribution({"script_name": "%test%"})
+    dist.parse_config_files()
+
+    build_py = dist.get_command_obj("build_py")
+    build_py.editable_mode = True
+    build_py.ensure_finalized()
+    build_lib = build_py.build_lib.replace(os.sep, "/")
+    outputs = [x.replace(os.sep, "/") for x in build_py.get_outputs()]
+    assert outputs == [
+        f"{build_lib}/mypkg/__init__.py",
+        f"{build_lib}/mypkg/resource_file.txt",
+        f"{build_lib}/mypkg/sub1/__init__.py",
+        f"{build_lib}/mypkg/sub1/mod1.py",
+        f"{build_lib}/mypkg/sub2/mod2.py",
+        f"{build_lib}/mypkg/sub2/nested/__init__.py",
+        f"{build_lib}/mypkg/sub2/nested/mod3.py",
+    ]
+    mapping = {
+        k.replace(os.sep, "/"): v.replace(os.sep, "/")
+        for k, v in build_py.get_output_mapping().items()
+    }
+    assert mapping == {
+        f"{build_lib}/mypkg/__init__.py": "src/mypkg/__init__.py",
+        f"{build_lib}/mypkg/resource_file.txt": "src/mypkg/resource_file.txt",
+        f"{build_lib}/mypkg/sub1/__init__.py": "src/mypkg/sub1/__init__.py",
+        f"{build_lib}/mypkg/sub1/mod1.py": "src/mypkg/sub1/mod1.py",
+        f"{build_lib}/mypkg/sub2/mod2.py": "src/mypkg/_sub2/mod2.py",
+        f"{build_lib}/mypkg/sub2/nested/__init__.py": "other/__init__.py",
+        f"{build_lib}/mypkg/sub2/nested/mod3.py": "other/mod3.py",
+    }