diff --git a/MANIFEST.in b/MANIFEST.in
index 81ab62ed..36ebec26 100644
--- a/MANIFEST.in
+++ b/MANIFEST.in
@@ -1,2 +1,2 @@
-include pydartdiags/obs_sequence/composite_types.yaml
+include src/pydartdiags/obs_sequence/composite_types.yaml
 
diff --git a/docs/api/example_data.rst b/docs/api/example_data.rst
new file mode 100644
index 00000000..047159a6
--- /dev/null
+++ b/docs/api/example_data.rst
@@ -0,0 +1,9 @@
+.. example_data:
+
+=====================
+module: data
+=====================
+
+.. automodule:: data
+   :members:
+   :member-order: bysource
\ No newline at end of file
diff --git a/docs/api/index.rst b/docs/api/index.rst
index 6ae26367..64670ce3 100644
--- a/docs/api/index.rst
+++ b/docs/api/index.rst
@@ -12,3 +12,4 @@ API Guide
     stats
     matplots
     plots
+    example_data
diff --git a/examples/01_manipulating/plot_duplicates.py b/examples/01_manipulating/plot_duplicates.py
index 041f3bbb..6d71189b 100644
--- a/examples/01_manipulating/plot_duplicates.py
+++ b/examples/01_manipulating/plot_duplicates.py
@@ -9,15 +9,14 @@
 
 ###########################################
 # Import the obs_sequence module
-import os
 import pydartdiags.obs_sequence.obs_sequence as obsq
+from pydartdiags.data import get_example_data
 
 ###########################################
 # Read in the observation sequence file. In this example we'll use a real obs_seq file,
-# the NCEP+ACARS.201303_6H.obs_seq2013030306 file that comes with the pyDARTdiags package.
+# the NCEP+ACARS.201303_6H.obs_seq2013030306 file.
 # This is 6 hours of observations from March 3, 2013.
-data_dir = os.path.join(os.getcwd(), "../..", "data")
-data_file = os.path.join(data_dir, "NCEP+ACARS.201303_6H.obs_seq2013030306")
+data_file = get_example_data("NCEP+ACARS.201303_6H.obs_seq2013030306")
 
 obs_seq = obsq.ObsSequence(data_file)
 
diff --git a/examples/01_manipulating/plot_external_fo.py b/examples/01_manipulating/plot_external_fo.py
index 72902fc2..46740596 100644
--- a/examples/01_manipulating/plot_external_fo.py
+++ b/examples/01_manipulating/plot_external_fo.py
@@ -16,16 +16,15 @@
 
 ###########################################
 # Import the obs_sequence module, and numpy
-import os
 import pydartdiags.obs_sequence.obs_sequence as obsq
+from pydartdiags.data import get_example_data
 import numpy as np
 
 ###########################################
 # Read in the observation sequence file. In this example we'll use the
-# obs_seq.out.tracer file that comes with the pyDARTdiags package.
-# This file only has two observations. 
-data_dir = os.path.join(os.getcwd(), "../..", "data")
-data_file = os.path.join(data_dir, "obs_seq.out.tracer")
+# obs_seq.out.tracer file.
+# This file only has two observations.
+data_file = get_example_data("obs_seq.out.tracer")
 obs_seq = obsq.ObsSequence(data_file)
 
 ###########################################
diff --git a/examples/01_manipulating/plot_join_obs_seq.py b/examples/01_manipulating/plot_join_obs_seq.py
index 1cb5c703..0269a4d6 100644
--- a/examples/01_manipulating/plot_join_obs_seq.py
+++ b/examples/01_manipulating/plot_join_obs_seq.py
@@ -10,15 +10,12 @@
 ###########################################
 # Import the obs_sequence module.
 import pydartdiags.obs_sequence.obs_sequence as obsq
+from pydartdiags.data import get_example_data
 
 ###########################################
 # Chose the first obs_seq file to read.
-# In this example, we are using a small obs_seq file "obs_seq.final.1000"
-# that comes with the pyDARTdiags package 
-# in the data directory, so we ``import os`` to get the path to the file.
-import os
-data_dir = os.path.join(os.getcwd(), "../..", "data")
-data_file1 = os.path.join(data_dir, "obs_seq.final.1000")
+# In this example, we are using a small obs_seq file "obs_seq.final.1000".
+data_file1 = get_example_data("obs_seq.final.1000")
 
 ###########################################
 # Read the obs_seq file into an obs_seq object.
@@ -30,7 +27,7 @@
 ###########################################
 # Chose the second obs_seq file to read.
 
-data_file2 = os.path.join(data_dir, "obs_seq.final.ascii.small")
+data_file2 = get_example_data("obs_seq.final.ascii.small")
 obs_seq2 = obsq.ObsSequence(data_file2)
 
 print('obs_seq2 has assimilation info:', obs_seq2.has_assimilation_info())
diff --git a/examples/01_manipulating/plot_remove_obs.py b/examples/01_manipulating/plot_remove_obs.py
index 5e9ee832..f6d7c909 100644
--- a/examples/01_manipulating/plot_remove_obs.py
+++ b/examples/01_manipulating/plot_remove_obs.py
@@ -10,15 +10,12 @@
 ###########################################
 # Import the obs_sequence module
 import pydartdiags.obs_sequence.obs_sequence as obsq
+from pydartdiags.data import get_example_data
 
 ###########################################
 # Chose an obs_seq file to read.
-# In this example, we are using a small obs_seq file "obs_seq.final.medium"
-# that comes with the pyDARTdiags package 
-# in the data directory, so we ``import os`` to get the path to the file.
-import os
-data_dir = os.path.join(os.getcwd(), "../..", "data")
-data_file = os.path.join(data_dir, "obs_seq.final.ascii.medium")
+# In this example, we are using a small obs_seq file "obs_seq.final.medium".
+data_file = get_example_data("obs_seq.final.ascii.medium")
 
 ###########################################
 # Read the obs_seq file into an obs_seq object.
diff --git a/examples/02_visualizing/plot_qc_hover.py b/examples/02_visualizing/plot_qc_hover.py
index 5dc8c799..019bd040 100644
--- a/examples/02_visualizing/plot_qc_hover.py
+++ b/examples/02_visualizing/plot_qc_hover.py
@@ -13,20 +13,17 @@
 
 ###########################################
 # Import the modules
-import os
 import plotly.express as px
 import pydartdiags.obs_sequence.obs_sequence as obsq
+from pydartdiags.data import get_example_data
 
 # sphinx_gallery_thumbnail_path = '_static/geo_thumb.png'
 
 
 ###########################################
 # Read the obs_seq file into an obs_seq object.
-# In this example, we use a small obs_seq file "obs_seq.final.ascii.medium"
-# that comes with the pyDARTdiags package 
-# in the data directory, so we use ``os`` to get the path to the file
-data_dir = os.path.join(os.getcwd(), "../..", "data")
-data_file = os.path.join(data_dir, "obs_seq.final.ascii.medium")
+# In this example, we use a small obs_seq file "obs_seq.final.ascii.medium".
+data_file = get_example_data("obs_seq.final.ascii.medium")
 
 obs_seq = obsq.ObsSequence(data_file)
 
diff --git a/examples/03_diagnostics/plot_evolution.py b/examples/03_diagnostics/plot_evolution.py
index ccdad41b..df631122 100644
--- a/examples/03_diagnostics/plot_evolution.py
+++ b/examples/03_diagnostics/plot_evolution.py
@@ -11,16 +11,13 @@
 # and the matplots module for plotting.
 import pydartdiags.obs_sequence.obs_sequence as obsq
 from pydartdiags.matplots import matplots as mp
+from pydartdiags.data import get_example_data
 
 ###########################################
 # Chose an obs_seq file to read.
 # In this example, we are using "obs_seq.final.lorenz_96" which is from
 # a Lorenz 96 model run with the DART assimilation system.
-# The obs_seq.final.lorenz_96 file comes with the pyDARTdiags package
-# in the data directory, so we ``import os`` to get the path to the file.
-import os
-data_dir = os.path.join(os.getcwd(), "../..", "data")
-data_file = os.path.join(data_dir, "obs_seq.final.lorenz_96")
+data_file = get_example_data("obs_seq.final.lorenz_96")
 
 ###########################################
 # Read the obs_seq file into an obs_seq object.
diff --git a/examples/03_diagnostics/plot_grand_stats.py b/examples/03_diagnostics/plot_grand_stats.py
index ee501e62..e9ca32c1 100644
--- a/examples/03_diagnostics/plot_grand_stats.py
+++ b/examples/03_diagnostics/plot_grand_stats.py
@@ -13,14 +13,12 @@
 # and the statistics module.
 import pydartdiags.obs_sequence.obs_sequence as obsq
 from pydartdiags.stats import stats
+from pydartdiags.data import get_example_data
+
 ###########################################
 # Chose an obs_seq file to read.
-# This is a small obs_seq file "obs_seq.final.ascii.medium"
-# that comes with the pyDARTdiags package 
-# in the data directory, so we ``import os`` to get the path to the file
-import os
-data_dir = os.path.join(os.getcwd(), "../..", "data")
-data_file = os.path.join(data_dir, "obs_seq.final.ascii.medium")
+# This is a small obs_seq file "obs_seq.final.ascii.medium".
+data_file = get_example_data("obs_seq.final.ascii.medium")
 
 
 ###########################################
diff --git a/examples/03_diagnostics/plot_profiles.py b/examples/03_diagnostics/plot_profiles.py
index f0365280..eb4b2c0d 100644
--- a/examples/03_diagnostics/plot_profiles.py
+++ b/examples/03_diagnostics/plot_profiles.py
@@ -12,15 +12,12 @@
 # and the matplots module for plotting.
 import pydartdiags.obs_sequence.obs_sequence as obsq
 from pydartdiags.matplots import matplots as mp
+from pydartdiags.data import get_example_data
 
 ###########################################
 # Chose an obs_seq file to read.
-# In this example, we are using a small obs_seq file "obs_seq.final.1000"
-# that comes with the pyDARTdiags package 
-# in the data directory, so we ``import os`` to get the path to the file.
-import os
-data_dir = os.path.join(os.getcwd(), "../..", "data")
-data_file = os.path.join(data_dir, "obs_seq.final.1000")
+# In this example, we are using a small obs_seq file "obs_seq.final.1000".
+data_file = get_example_data("obs_seq.final.1000")
 
 ###########################################
 # Read the obs_seq file into an obs_seq object.
diff --git a/examples/03_diagnostics/plot_qc_poss_vs_used.py b/examples/03_diagnostics/plot_qc_poss_vs_used.py
index 804647d2..b66c6d0e 100644
--- a/examples/03_diagnostics/plot_qc_poss_vs_used.py
+++ b/examples/03_diagnostics/plot_qc_poss_vs_used.py
@@ -12,15 +12,12 @@
 ###########################################
 # Import the obs_sequence module
 import pydartdiags.obs_sequence.obs_sequence as obsq
+from pydartdiags.data import get_example_data
 
 ###########################################
 # Chose an obs_seq file to read.
-# This is a small obs_seq file "obs_seq.final.ascii.small"
-# that comes with the pyDARTdiags package 
-# in the data directory, so we ``import os`` to get the path to the file
-import os
-data_dir = os.path.join(os.getcwd(), "../..", "data")
-data_file = os.path.join(data_dir, "obs_seq.final.ascii.small")
+# This is a small obs_seq file "obs_seq.final.ascii.small".
+data_file = get_example_data("obs_seq.final.ascii.small")
 
 ###########################################
 # read the obs_seq file into an obs_seq object
diff --git a/examples/03_diagnostics/plot_rank_histogram.py b/examples/03_diagnostics/plot_rank_histogram.py
index 892e702e..c93a7b9e 100644
--- a/examples/03_diagnostics/plot_rank_histogram.py
+++ b/examples/03_diagnostics/plot_rank_histogram.py
@@ -12,15 +12,12 @@
 # and the matplots module for plotting.
 import pydartdiags.obs_sequence.obs_sequence as obsq
 from pydartdiags.matplots import matplots as mp
+from pydartdiags.data import get_example_data
 
 ###########################################
 # Chose an obs_seq file to read.
-# In this example, we are using a small obs_seq file "obs_seq.final.1000"
-# that comes with the pyDARTdiags package 
-# in the data directory, so we ``import os`` to get the path to the file.
-import os
-data_dir = os.path.join(os.getcwd(), "../..", "data")
-data_file = os.path.join(data_dir, "obs_seq.final.1000")
+# In this example, we are using a small obs_seq file "obs_seq.final.1000".
+data_file = get_example_data("obs_seq.final.1000")
 
 ###########################################
 # Read the obs_seq file into an obs_seq object.
diff --git a/pyproject.toml b/pyproject.toml
index 014f79d3..8ae12454 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -1,5 +1,5 @@
 [build-system]
-requires = ["setuptools", "wheel"]
+requires = ["setuptools>=64", "wheel"]
 build-backend = "setuptools.build_meta"
 
 [project]
@@ -29,3 +29,6 @@ Homepage = "https://github.com/NCAR/pyDARTdiags.git"
 Issues = "https://github.com/NCAR/pyDARTdiags/issues"
 Documentation = "https://ncar.github.io/pyDARTdiags"
 
+[tool.setuptools.packages.find]
+where = ["src"]
+include = ["pydartdiags*"]
diff --git a/setup.py b/setup.py
deleted file mode 100644
index 1a9aeff6..00000000
--- a/setup.py
+++ /dev/null
@@ -1,31 +0,0 @@
-from setuptools import setup, find_packages
-
-setup(
-    name="pydartdiags",
-    version="0.6.2",
-    packages=find_packages(where="src"),
-    package_dir={"": "src"},
-    include_package_data=True,
-    package_data={
-        "pydartdiags": ["obs_sequence/composite_types.yaml"],
-    },
-    author="Helen Kershaw",
-    author_email="hkershaw@ucar.edu",
-    description="Observation Sequence Diagnostics for DART",
-    long_description=open("README.md").read(),
-    long_description_content_type="text/markdown",
-    url="https://github.com/NCAR/pyDARTdiags.git",
-    classifiers=[
-        "Programming Language :: Python :: 3",
-        "License :: OSI Approved :: Apache Software License",
-        "Operating System :: OS Independent",
-    ],
-    python_requires=">=3.8",
-    install_requires=[
-        "pandas>=2.2.0",
-        "numpy>=1.26",
-        "plotly>=5.22.0",
-        "pyyaml>=6.0.2",
-        "matplotlib>=3.9.4"
-    ],
-)
diff --git a/src/pydartdiags/data.py b/src/pydartdiags/data.py
new file mode 100644
index 00000000..436a7c9c
--- /dev/null
+++ b/src/pydartdiags/data.py
@@ -0,0 +1,246 @@
+"""
+Data file utilities for pyDARTdiags examples.
+
+This module provides functions to locate, download,
+and cache example files used in pyDARTdiags examples.
+The data files are cached in the users home directory
+under ~/.pydartdiags/data.
+
+"""
+
+import os
+from pathlib import Path
+import urllib.request
+import zipfile
+import shutil
+
+# Zenodo DOI/URL for the data archive
+ZENODO_RECORD_ID = "18135062"
+ZENODO_RECORD_URL = f"https://zenodo.org/api/records/{ZENODO_RECORD_ID}/files-archive"
+ZENODO_DOI = f"https://doi.org/10.5281/zenodo.{ZENODO_RECORD_ID}"
+
+
+def get_data_cache_dir():
+    """Get the cache directory for downloaded data files."""
+    cache_dir = Path.home() / ".pydartdiags" / "data"
+    return cache_dir
+
+
+def get_example_data(filename, auto_download=True):
+    """
+    Get path to a data file, checking multiple locations.
+
+    Searches for data files in the following order:
+        1. Development location (../../data from package GitHub repo)
+        2. Environment variable PYDARTDIAGS_DATA
+        3. User cache directory (~/.pydartdiags/data)
+        4. Downloads from Zenodo if auto_download=True
+
+    Parameters
+    ----------
+    filename : str
+        Name of the data file to locate
+    auto_download : bool, optional
+        If True, automatically download from Zenodo if not found locally.
+        Default is True.
+
+    Returns
+    -------
+    str
+        Absolute path to the data file
+
+    Raises
+    ------
+    FileNotFoundError
+        If the file is not found and auto_download=False
+
+    Examples
+    --------
+
+    .. code-block:: python
+
+        data_file = get_example_data("obs_seq.final.lorenz_96")
+
+    """
+    # 1. Check development location (for contributors/developers)
+    try:
+        package_dir = Path(__file__).parent.parent.parent
+        dev_data = package_dir / "data" / filename
+        print(f"package_dir: {package_dir}")
+        if dev_data.exists():
+            print(f"Using development data file: {dev_data}")
+            return str(dev_data)
+    except:
+        pass
+
+    # 2. Check environment variable
+    if "PYDARTDIAGS_DATA" in os.environ:
+        env_data = Path(os.environ["PYDARTDIAGS_DATA"]) / filename
+        if env_data.exists():
+            print(f"Using data file from PYDARTDIAGS_DATA: {env_data}")
+            return str(env_data)
+
+    # 3. Check cache directory
+    cache_dir = get_data_cache_dir()
+    cache_file = cache_dir / filename
+    if cache_file.exists():
+        print(f"Using cached data file: {cache_file}")
+        return str(cache_file)
+
+    # 4. File not found
+    if not auto_download:
+        raise FileNotFoundError(
+            f"Data file '{filename}' not found.\n\n"
+            f"To download example data:\n"
+            f"  Option 1: Automatic download\n"
+            f"    >>> from pydartdiags.data import download_all_data\n"
+            f"    >>> download_all_data()\n\n"
+            f"  Option 2: Manual download\n"
+            f"    Download from: {ZENODO_DOI}\n"
+            f"    Extract to: {cache_dir}\n\n"
+            f"  Option 3: Set environment variable\n"
+            f"    export PYDARTDIAGS_DATA=/path/to/your/data\n"
+        )
+
+    # Auto-download
+    print(f"Data file '{filename}' not found locally.")
+    print("Downloading all example data from Zenodo...")
+    download_all_data()
+
+    # Check again after download
+    if cache_file.exists():
+        return str(cache_file)
+    else:
+        raise FileNotFoundError(
+            f"Downloaded data but '{filename}' still not found. "
+            f"Please check {ZENODO_RECORD_URL}"
+        )
+
+
+def download_all_data(force=False):
+    """
+    Download all example data files from Zenodo.
+
+    Downloads and extracts the complete data archive to the user's
+    cache directory (~/.pydartdiags/data).
+
+    Parameters
+    ----------
+    force : bool, optional
+        If True, re-download even if data already exists. Default is False.
+
+    Examples
+    --------
+
+    .. code-block:: python
+
+        from pydartdiags.data import download_all_data
+        download_all_data()
+
+    """
+    cache_dir = get_data_cache_dir()
+
+    if cache_dir.exists() and not force:
+        print(f"Data directory already exists: {cache_dir}")
+        print("Use force=True to re-download.")
+        return
+
+    cache_dir.mkdir(parents=True, exist_ok=True)
+
+    # Download archive
+    archive_file = cache_dir.parent / f"{ZENODO_RECORD_ID}.zip"
+
+    print(f"Downloading data from Zenodo ({ZENODO_DOI})...")
+    print(f"This may take a few minutes (approx. 85 MB)...")
+
+    try:
+        urllib.request.urlretrieve(ZENODO_RECORD_URL, archive_file)
+        print(f"Download complete: {archive_file}")
+
+        # Extract archive
+        print(f"Extracting to {cache_dir}...")
+        with zipfile.ZipFile(archive_file, "r") as zip_ref:
+            zip_ref.extractall(path=cache_dir)
+
+        # Clean up archive
+        archive_file.unlink()
+
+        print(f"Data successfully installed to {cache_dir}")
+        print(f"Found {len(list(cache_dir.glob('*')))} data files")
+
+    except Exception as e:
+        print(f"Error downloading data: {e}")
+        print(f"\nManual download instructions:")
+        print(f"1. Download from: {ZENODO_DOI}")
+        print(f"2. Extract to: {cache_dir}")
+        raise
+
+
+def list_available_data():
+    """
+    List all available data files.
+
+    Returns
+    -------
+    list of str
+        List of available data file names
+
+    Examples
+    --------
+
+    .. code-block:: python
+
+        from pydartdiags.data import list_available_data
+        files = list_available_data()
+        print(files)
+
+    """
+    locations = []
+
+    # Check development location
+    try:
+        package_dir = Path(__file__).parent.parent.parent
+        dev_data = package_dir / "data"
+        if dev_data.exists():
+            locations.append(dev_data)
+    except:
+        pass
+
+    # Check environment variable
+    if "PYDARTDIAGS_DATA" in os.environ:
+        env_data = Path(os.environ["PYDARTDIAGS_DATA"])
+        if env_data.exists():
+            locations.append(env_data)
+
+    # Check cache
+    cache_dir = get_data_cache_dir()
+    if cache_dir.exists():
+        locations.append(cache_dir)
+
+    # Collect all files
+    files = set()
+    for loc in locations:
+        files.update([f.name for f in loc.glob("*") if f.is_file()])
+
+    return sorted(list(files))
+
+
+def clear_cache():
+    """
+    Remove all downloaded data from the cache directory.
+
+    Examples
+    --------
+
+    .. code-block:: python
+
+        from pydartdiags.data import clear_cache
+        clear_cache()
+
+    """
+    cache_dir = get_data_cache_dir()
+    if cache_dir.exists():
+        shutil.rmtree(cache_dir)
+        print(f"Cleared cache: {cache_dir}")
+    else:
+        print("Cache directory does not exist.")