diff --git a/backends/pep517.py b/backends/pep517.py
index f165f26e95a1..4e4818007e84 100644
--- a/backends/pep517.py
+++ b/backends/pep517.py
@@ -136,11 +136,20 @@ def _inject_extra_sdist_files(tar_root):
         for filename in glob.glob(pattern, recursive=True):
             filename = os.path.relpath(filename, ROOT_DIR)
             path_to_add = os.path.join(ROOT_DIR, filename)
+            if not _should_copy(path_to_add):
+                continue
             target_path = os.path.join(tar_root, filename)
             _create_dir_if_not_exists(os.path.dirname(target_path))
             shutil.copy2(path_to_add, target_path)
 
 
+def _should_copy(path):
+    if "__pycache__" in path or path.endswith(".pyc"):
+        return False
+    if os.path.isdir(path):
+        return False
+    return True
+
 def read_sdist_extras():
     with open(ROOT_DIR / "pyproject.toml", "r") as f:
         data = f.read()
diff --git a/pyproject.toml b/pyproject.toml
index 02fc78519050..f7c7cd97c44c 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -49,6 +49,7 @@ include = [
     "backends/**/*.py",
     "bin/*",
     "CHANGELOG.rst",
+    "tests/**/*",
 ]
 # end of cli sdist tool section
 
diff --git a/tests/backends/test_pep517.py b/tests/backends/test_pep517.py
index 98b16f255464..e9a6ed285d3e 100644
--- a/tests/backends/test_pep517.py
+++ b/tests/backends/test_pep517.py
@@ -110,6 +110,13 @@ def test_build_sdist(tmpdir, config_settings):
     # Make sure the bin directory is included.
     assert unpacked_sdist.join("bin", "aws").check()
 
+    # Make sure the tests directory is included.
+    assert unpacked_sdist.join("tests", "__init__.py").check()
+    assert unpacked_sdist.join("tests", "unit", "__init__.py").check()
+    assert unpacked_sdist.join(
+        "tests", "backends", "build_system", "unit", "__init__.py").check()
+    assert unpacked_sdist.join("tests", "__init__.py").check()
+
     # We do not build the ac.index in building the sdist. So we want to make
     # sure it is not being included.
     assert not unpacked_sdist.join("awscli", "data", "ac.index").check()
@@ -245,6 +252,7 @@ def test_read_sdist_extras():
         "backends/**/*.py",
         "bin/*",
         "CHANGELOG.rst",
+        "tests/**/*",
     }
     extras = set(backends.pep517.read_sdist_extras())