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diff --git a/scripts/testing/setup-testing-env.sh b/scripts/testing/setup-testing-env.sh
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+#!/bin/bash
+# Setup testing environment for archsetup
+# Author: Craig Jennings <craigmartinjennings@gmail.com>
+# License: GNU GPLv3
+#
+# This script performs one-time setup of the testing infrastructure:
+# - Installs QEMU/KVM and libvirt
+# - Configures libvirt networking
+# - Adds user to libvirt group
+# - Verifies KVM support
+# - Creates directories for test artifacts
+
+set -e
+
+# Get script directory
+SCRIPT_DIR="$(cd "$(dirname "${BASH_SOURCE[0]}")" && pwd)"
+PROJECT_ROOT="$(cd "$SCRIPT_DIR/../.." && pwd)"
+
+# Source utilities
+source "$SCRIPT_DIR/lib/logging.sh"
+
+# Initialize logging
+LOGFILE="$PROJECT_ROOT/test-results/setup-$(date +'%Y%m%d-%H%M%S').log"
+init_logging "$LOGFILE"
+
+section "ArchSetup Testing Environment Setup"
+
+# Check if running on Arch Linux
+if [ ! -f /etc/arch-release ]; then
+    fatal "This script is designed for Arch Linux"
+fi
+
+# Check if user has sudo
+if ! sudo -n true 2>/dev/null; then
+    warn "This script requires sudo access"
+    info "You may be prompted for your password"
+fi
+
+# Install required packages
+section "Installing Required Packages"
+
+PACKAGES=(
+    qemu-full
+    libvirt
+    virt-manager
+    dnsmasq
+    bridge-utils
+    iptables
+    virt-install
+    libguestfs
+)
+
+for pkg in "${PACKAGES[@]}"; do
+    if pacman -Qi "$pkg" &>/dev/null; then
+        info "$pkg is already installed"
+    else
+        step "Installing $pkg"
+        if sudo pacman -S --noconfirm "$pkg" >> "$LOGFILE" 2>&1; then
+            success "$pkg installed"
+        else
+            error "Failed to install $pkg"
+            fatal "Package installation failed"
+        fi
+    fi
+done
+
+# Enable and start libvirt service
+section "Configuring libvirt Service"
+
+step "Enabling libvirtd service"
+if sudo systemctl enable libvirtd.service >> "$LOGFILE" 2>&1; then
+    success "libvirtd service enabled"
+else
+    warn "Failed to enable libvirtd service (may already be enabled)"
+fi
+
+step "Starting libvirtd service"
+if sudo systemctl start libvirtd.service >> "$LOGFILE" 2>&1; then
+    success "libvirtd service started"
+else
+    if sudo systemctl is-active --quiet libvirtd.service; then
+        info "libvirtd service is already running"
+    else
+        error "Failed to start libvirtd service"
+        fatal "Service startup failed"
+    fi
+fi
+
+# Add user to libvirt group
+section "Configuring User Permissions"
+
+if groups | grep -q libvirt; then
+    success "User $USER is already in libvirt group"
+else
+    step "Adding user $USER to libvirt group"
+    if sudo usermod -a -G libvirt "$USER" >> "$LOGFILE" 2>&1; then
+        success "User added to libvirt group"
+        warn "You must log out and back in for group membership to take effect"
+        warn "After logging back in, re-run this script to continue"
+        exit 0
+    else
+        error "Failed to add user to libvirt group"
+        fatal "User configuration failed"
+    fi
+fi
+
+# Verify KVM support
+section "Verifying KVM Support"
+
+if [ -e /dev/kvm ]; then
+    success "KVM is available"
+else
+    error "KVM is not available"
+    info "Check if virtualization is enabled in BIOS"
+    info "Load kvm module: sudo modprobe kvm-intel (or kvm-amd)"
+    fatal "KVM not available"
+fi
+
+# Check which KVM module is loaded
+if lsmod | grep -q kvm_intel; then
+    info "Using Intel KVM"
+elif lsmod | grep -q kvm_amd; then
+    info "Using AMD KVM"
+else
+    warn "No KVM module detected"
+    info "Load with: sudo modprobe kvm-intel (or kvm-amd)"
+fi
+
+# Create directory structure
+section "Creating Directory Structure"
+
+DIRS=(
+    "$PROJECT_ROOT/vm-images"
+    "$PROJECT_ROOT/test-results"
+)
+
+for dir in "${DIRS[@]}"; do
+    if [ -d "$dir" ]; then
+        info "Directory exists: $dir"
+    else
+        step "Creating directory: $dir"
+        if mkdir -p "$dir" 2>> "$LOGFILE"; then
+            success "Directory created: $dir"
+        else
+            error "Failed to create directory: $dir"
+        fi
+    fi
+done
+
+# Configure default libvirt network
+section "Configuring libvirt Network"
+
+if virsh net-info default &>/dev/null; then
+    info "Default network exists"
+
+    if virsh net-info default | grep -q "Active:.*yes"; then
+        success "Default network is active"
+    else
+        step "Starting default network"
+        if virsh net-start default >> "$LOGFILE" 2>&1; then
+            success "Default network started"
+        else
+            error "Failed to start default network"
+        fi
+    fi
+
+    if virsh net-info default | grep -q "Autostart:.*yes"; then
+        info "Default network autostart is enabled"
+    else
+        step "Enabling default network autostart"
+        if virsh net-autostart default >> "$LOGFILE" 2>&1; then
+            success "Default network autostart enabled"
+        else
+            warn "Failed to enable default network autostart"
+        fi
+    fi
+else
+    error "Default network not found"
+    info "This is unusual - libvirt should create it automatically"
+fi
+
+# Summary
+section "Setup Complete"
+
+success "Testing environment is ready"
+info ""
+info "Next steps:"
+info "  1. Create base VM: ./scripts/testing/create-base-vm.sh"
+info "  2. Run a test: ./scripts/testing/run-test.sh"
+info ""
+info "Log file: $LOGFILE"