diff --git a/.github/workflows/binder-badge.yml b/.github/workflows/binder-badge.yml
new file mode 100644
index 00000000..87e9cd29
--- /dev/null
+++ b/.github/workflows/binder-badge.yml
@@ -0,0 +1,14 @@
+name: Binder Badge
+on:
+  pull_request_target:
+    types: [opened]
+
+jobs:
+  binder:
+    runs-on: ubuntu-latest
+    permissions:
+      pull-requests: write
+    steps:
+      - uses: jupyterlab/maintainer-tools/.github/actions/binder-link@v1
+        with:
+          github_token: ${{ secrets.github_token }}
diff --git a/.github/workflows/tests.yml b/.github/workflows/tests.yml
index 05bc3bfd..a2b960a8 100644
--- a/.github/workflows/tests.yml
+++ b/.github/workflows/tests.yml
@@ -22,7 +22,7 @@ jobs:
         key: ${{ runner.os }}-pip-${{ hashFiles('**/setup.py') }}-${{hashFiles('**/requirements.txt')}}
         restore-keys: |
           ${{ runner.os }}-pip-
-    - name: Install dependencies
+    - name: Install dependencies (docs)
       run: |
         sudo apt-get install -y pandoc
         python -m pip install --upgrade pip
@@ -49,7 +49,7 @@ jobs:
         key: ${{ runner.os }}-pip-${{ hashFiles('**/setup.py') }}-${{hashFiles('**/requirements.txt')}}
         restore-keys: |
           ${{ runner.os }}-pip-
-    - name: Install dependencies
+    - name: Install dependencies (js)
       run: |
         python -m pip install --upgrade pip
 
@@ -116,12 +116,13 @@ jobs:
         key: ${{ runner.os }}-pip-${{ hashFiles('**/setup.py') }}-${{hashFiles('**/requirements.txt')}}
         restore-keys: |
           ${{ runner.os }}-pip-
-    - name: Install dependencies
+    - name: Install dependencies (pytest)
       run: |
-        python -m pip install --upgrade pip
+        python -m pip install --upgrade pip 'setuptools<82'
         python -m pip install jupyterlab~=3.0
         python -m pip install --upgrade --upgrade-strategy=eager ".[test]"
         python -m pip install jupyter_server${{ matrix.jupyter_server-version }}
+        python -m pip install 'setuptools<82'
     - name: Test with pytest (Linux)
       if: startsWith(matrix.os, 'ubuntu')
       run: |
@@ -213,11 +214,11 @@ jobs:
         path: |
           ${{ github.workspace }}/pw-browsers
         key: ${{ runner.os }}-${{ hashFiles('ui-tests/package-lock.json') }}
-    
+
     - name: Install browser
       working-directory: ui-tests
       run: npx playwright install chromium
-      
+
     - name: Run playwright tests
       working-directory: ui-tests
       run: |
diff --git a/binder/environment.yml b/binder/environment.yml
new file mode 100644
index 00000000..f38e4f92
--- /dev/null
+++ b/binder/environment.yml
@@ -0,0 +1,15 @@
+name: example-environment
+channels:
+  - conda-forge
+  - nodefaults
+dependencies:
+  - jupyterlab >=4.0.0
+  - nodejs >=25,<26
+  - python >=3.14
+  - yarn >=3,<4
+  # build
+  - hatchling >=1.5.0
+  - hatch-jupyter-builder >=0.3.2
+  - hatch-nodejs-version
+  # dependencies
+  - jupyter_server >=2.0.0
diff --git a/binder/jupyter_config.py b/binder/jupyter_config.py
new file mode 100644
index 00000000..9720647c
--- /dev/null
+++ b/binder/jupyter_config.py
@@ -0,0 +1,7 @@
+# Copyright (c) Jupyter Development Team.
+# Distributed under the terms of the Modified BSD License.
+import logging
+
+c.ServerApp.log_level = logging.DEBUG
+
+c.ContentsManager.allow_hidden = True
diff --git a/binder/postBuild b/binder/postBuild
new file mode 100755
index 00000000..5a713a98
--- /dev/null
+++ b/binder/postBuild
@@ -0,0 +1,41 @@
+#!/usr/bin/env bash
+# perform a development install of nbdime
+#
+#   On Binder, this will run _after_ the environment has been fully created from
+#   the environment.yml in this directory.
+#
+#   This script should also run locally on Linux/MacOS:
+#
+#       bash binder/postBuild
+
+set -euox pipefail
+
+# verify the environment is self-consistent before even starting
+pip check
+
+# install the labextension
+pip install -e .
+jupyter labextension develop --overwrite .
+jupyter server extension enable nbdime
+
+#
+mkdir -p ~/.jupyter/
+
+cp binder/jupyter_config.py ~/.jupyter/
+
+# verify the extension didn't break anything
+pip check
+
+# list the extensions
+jupyter troubleshoot
+jupyter notebook --show-config
+jupyter lab --show-config
+jupyter server extension list
+jupyter labextension list
+
+
+echo ""
+echo "JupyterLab with nbdime is ready to run with:"
+echo ""
+echo "    jupyter lab"
+echo ""
diff --git a/nbdime/tests/conftest.py b/nbdime/tests/conftest.py
index aae7374e..93d7df3e 100644
--- a/nbdime/tests/conftest.py
+++ b/nbdime/tests/conftest.py
@@ -10,6 +10,7 @@
 import glob
 import io
 import re
+import threading
 from collections.abc import Sequence
 from subprocess import Popen, TimeoutExpired
 import sys
@@ -220,18 +221,32 @@ def nbdime_base_url():
 
 
 @fixture
-def app(nbdime_base_url, filespath):
-    """This is a fixture used by the pytest-tornado plugin.
-
-    It is indirectly called by all tests that use the `gen_test`
-    test mark.
-    """
+def web_server(nbdime_base_url, filespath):
+    """Start a Tornado web server in a background thread and yield the base URL."""
+    from tornado import ioloop
     from nbdime.webapp.nbdimeserver import init_app
-    return init_app(
+
+    port_holder = {}
+
+    def on_port(port):
+        port_holder['port'] = port
+
+    app, server = init_app(
+        on_port=on_port,
         base_url=nbdime_base_url,
         port=0,
         cwd=filespath,
-    )[0]
+    )
+    loop = ioloop.IOLoop.current()
+    thread = threading.Thread(target=loop.start, daemon=True)
+    thread.start()
+
+    base_url = 'http://localhost:%d' % port_holder['port']
+    yield base_url
+
+    server.stop()
+    loop.add_callback(loop.stop)
+    thread.join(timeout=5)
 
 
 @fixture
diff --git a/nbdime/tests/test_web.py b/nbdime/tests/test_web.py
index 9ebd5fbb..a32cdf1c 100644
--- a/nbdime/tests/test_web.py
+++ b/nbdime/tests/test_web.py
@@ -7,9 +7,9 @@
 import json
 
 import pytest
+import requests
 from tornado import ioloop
 from tornado.httputil import url_concat
-from tornado.escape import json_encode, json_decode
 import nbformat
 
 import nbdime.webapp.nbdiffweb
@@ -73,26 +73,23 @@ def test_merge_web(filespath, unique_port, reset_log, ioloop_patch):
 
 
 @pytest.mark.timeout(timeout=WEB_TEST_TIMEOUT)
-@pytest.mark.gen_test
-def test_fetch_diff(http_client, base_url, nbdime_base_url):
+def test_fetch_diff(web_server, nbdime_base_url):
     url = url_concat(
-        base_url + nbdime_base_url + '/diff',
+        web_server + nbdime_base_url + '/diff',
         dict(base=diff_a, remote=diff_b))
-    response = yield http_client.fetch(url)
-    assert response.code == 200
+    response = requests.get(url)
+    assert response.status_code == 200
 
 
 @pytest.mark.timeout(timeout=WEB_TEST_TIMEOUT)
-@pytest.mark.gen_test
-def test_api_diff(http_client, base_url, nbdime_base_url, diff_validator, filespath, auth_header):
+def test_api_diff(web_server, nbdime_base_url, diff_validator, filespath, auth_header):
     post_data = dict(base=diff_a, remote=diff_b)
-    body = json_encode(post_data)
 
-    url = base_url + nbdime_base_url + '/api/diff'
-    response = yield http_client.fetch(url, method='POST', headers=auth_header, body=body)
-    assert response.code == 200
+    url = web_server + nbdime_base_url + '/api/diff'
+    response = requests.post(url, json=post_data, headers=auth_header)
+    assert response.status_code == 200
     # Check that response is sane:
-    data = json_decode(response.body)
+    data = response.json()
     # Check that base is as expected:
     expected_base = nbformat.read(os.path.join(filespath, diff_a), as_version=4)
     assert json.dumps(data['base'], sort_keys=True) == json.dumps(expected_base, sort_keys=True)
@@ -101,26 +98,23 @@ def test_api_diff(http_client, base_url, nbdime_base_url, diff_validator, filesp
 
 
 @pytest.mark.timeout(timeout=WEB_TEST_TIMEOUT)
-@pytest.mark.gen_test
-def test_fetch_merge(http_client, base_url, nbdime_base_url):
+def test_fetch_merge(web_server, nbdime_base_url):
     url = url_concat(
-        base_url + nbdime_base_url + '/merge',
+        web_server + nbdime_base_url + '/merge',
         dict(base=merge_a, local=merge_b, remote=merge_c))
-    response = yield http_client.fetch(url)
-    assert response.code == 200
+    response = requests.get(url)
+    assert response.status_code == 200
 
 
 @pytest.mark.timeout(timeout=WEB_TEST_TIMEOUT)
-@pytest.mark.gen_test
-def test_api_merge(http_client, base_url, nbdime_base_url, merge_validator, filespath, auth_header):
+def test_api_merge(web_server, nbdime_base_url, merge_validator, filespath, auth_header):
     post_data = dict(base=merge_a, local=merge_b, remote=merge_c)
-    body = json_encode(post_data)
 
-    url = base_url + nbdime_base_url + '/api/merge'
-    response = yield http_client.fetch(url, method='POST', headers=auth_header, body=body)
-    assert response.code == 200
+    url = web_server + nbdime_base_url + '/api/merge'
+    response = requests.post(url, json=post_data, headers=auth_header)
+    assert response.status_code == 200
     # Check that response is sane:
-    data = json_decode(response.body)
+    data = response.json()
     # Check that base is as expected:
     expected_base = nbformat.read(os.path.join(filespath, merge_a), as_version=4)
     assert json.dumps(data['base'], sort_keys=True) == json.dumps(expected_base, sort_keys=True)
diff --git a/pyproject.toml b/pyproject.toml
index 73ab6069..f8ed0cdf 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -71,7 +71,6 @@ test = [
     "pytest>=6.0",
     "pytest-cov",
     "pytest-timeout",
-    "pytest-tornado",
     "jupyter_server[test]",
     "jsonschema",
     "mock",