diff --git a/direct/src/dist/commands.py b/direct/src/dist/commands.py
index e55ed8a2cd..02e2285606 100644
--- a/direct/src/dist/commands.py
+++ b/direct/src/dist/commands.py
@@ -1685,3 +1685,14 @@ class bdist_apps(setuptools.Command):
 
                 else:
                     self.announce('\tUnknown installer: {}'.format(installer), distutils.log.ERROR)
+
+
+def finalize_distribution_options(dist):
+    """Entry point for compatibility with setuptools>=61, see #1394."""
+
+    options = dist.get_option_dict('build_apps')
+    if options.get('gui_apps') or options.get('console_apps'):
+        # Make sure this is set to avoid auto-discovery taking place.
+        if getattr(dist.metadata, 'py_modules', None) is None and \
+           getattr(dist.metadata, 'packages', None) is None:
+            dist.py_modules = []
diff --git a/makepanda/makepanda.py b/makepanda/makepanda.py
index e348702d7e..49d0d74283 100755
--- a/makepanda/makepanda.py
+++ b/makepanda/makepanda.py
@@ -3259,6 +3259,9 @@ Author-email: etc-panda3d@lists.andrew.cmu.edu
 ENTRY_POINTS = """[distutils.commands]
 build_apps = direct.dist.commands:build_apps
 bdist_apps = direct.dist.commands:bdist_apps
+
+[setuptools.finalize_distribution_options]
+build_apps = direct.dist.commands:finalize_distribution_options
 """
 
 if not PkgSkip("DIRECT"):
diff --git a/makepanda/makewheel.py b/makepanda/makewheel.py
index fbcace6b56..f7ab00a0f9 100644
--- a/makepanda/makewheel.py
+++ b/makepanda/makewheel.py
@@ -765,6 +765,8 @@ __version__ = '{0}'
     entry_points += '[distutils.commands]\n'
     entry_points += 'build_apps = direct.dist.commands:build_apps\n'
     entry_points += 'bdist_apps = direct.dist.commands:bdist_apps\n'
+    entry_points += '[setuptools.finalize_distribution_options]\n'
+    entry_points += 'build_apps = direct.dist.commands:finalize_distribution_options\n'
 
     whl.write_file_data('panda3d_tools/__init__.py', PANDA3D_TOOLS_INIT.format(tools_init))