diff --git a/Cargo.lock b/Cargo.lock
index 1ef938990a88..350851e2b060 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -4999,6 +4999,7 @@ dependencies = [
  "uv-normalize",
  "uv-resolver",
  "uv-toolchain",
+ "uv-warnings",
 ]
 
 [[package]]
diff --git a/crates/uv-settings/Cargo.toml b/crates/uv-settings/Cargo.toml
index a6e05c7a00bf..8dbff5fc79e0 100644
--- a/crates/uv-settings/Cargo.toml
+++ b/crates/uv-settings/Cargo.toml
@@ -19,10 +19,11 @@ pep508_rs = { workspace = true }
 pypi-types = { workspace = true }
 uv-configuration = { workspace = true, features = ["schemars"] }
 uv-fs = { workspace = true }
+uv-macros = { workspace = true }
 uv-normalize = { workspace = true, features = ["schemars"] }
 uv-resolver = { workspace = true, features = ["schemars"] }
 uv-toolchain = { workspace = true, features = ["schemars"] }
-uv-macros = { workspace = true }
+uv-warnings = { workspace = true }
 
 dirs-sys = { workspace = true }
 fs-err = { workspace = true }
diff --git a/crates/uv-settings/src/lib.rs b/crates/uv-settings/src/lib.rs
index a5bfb2f5b732..a89176d3c0d0 100644
--- a/crates/uv-settings/src/lib.rs
+++ b/crates/uv-settings/src/lib.rs
@@ -4,6 +4,7 @@ use std::path::{Path, PathBuf};
 use tracing::debug;
 
 use uv_fs::Simplified;
+use uv_warnings::warn_user;
 
 pub use crate::combine::*;
 pub use crate::settings::*;
@@ -57,22 +58,25 @@ impl FilesystemOptions {
 
     /// Find the [`FilesystemOptions`] for the given path.
     ///
-    /// The search starts at the given path and goes up the directory tree until a `uv.toml` file is
-    /// found.
+    /// The search starts at the given path and goes up the directory tree until a `uv.toml` file or
+    /// `pyproject.toml` file is found.
     pub fn find(path: impl AsRef<Path>) -> Result<Option<Self>, Error> {
         for ancestor in path.as_ref().ancestors() {
-            // Read a `uv.toml` file in the current directory.
-            let path = ancestor.join("uv.toml");
-            match fs_err::read_to_string(&path) {
-                Ok(content) => {
-                    let options: Options = toml::from_str(&content)
-                        .map_err(|err| Error::UvToml(path.user_display().to_string(), err))?;
-
-                    debug!("Found workspace configuration at `{}`", path.display());
-                    return Ok(Some(Self(options)));
+            match Self::from_directory(ancestor) {
+                Ok(Some(options)) => {
+                    return Ok(Some(options));
+                }
+                Ok(None) => {
+                    // Continue traversing the directory tree.
+                }
+                Err(Error::PyprojectToml(file, _err)) => {
+                    // If we see an invalid `pyproject.toml`, warn but continue.
+                    warn_user!("Failed to parse `{file}` during settings discovery; skipping...");
+                }
+                Err(err) => {
+                    // Otherwise, warn and stop.
+                    return Err(err);
                 }
-                Err(err) if err.kind() == std::io::ErrorKind::NotFound => {}
-                Err(err) => return Err(err.into()),
             }
         }
         Ok(None)
@@ -103,9 +107,17 @@ impl FilesystemOptions {
                 let pyproject: PyProjectToml = toml::from_str(&content)
                     .map_err(|err| Error::PyprojectToml(path.user_display().to_string(), err))?;
                 let Some(tool) = pyproject.tool else {
+                    debug!(
+                        "Skipping `pyproject.toml` in `{}` (no `[tool]` section)",
+                        dir.as_ref().display()
+                    );
                     return Ok(None);
                 };
                 let Some(options) = tool.uv else {
+                    debug!(
+                        "Skipping `pyproject.toml` in `{}` (no `[tool.uv]` section)",
+                        dir.as_ref().display()
+                    );
                     return Ok(None);
                 };
 
diff --git a/crates/uv/tests/pip_compile.rs b/crates/uv/tests/pip_compile.rs
index b35d921eacbb..d272f11c0ee7 100644
--- a/crates/uv/tests/pip_compile.rs
+++ b/crates/uv/tests/pip_compile.rs
@@ -3204,6 +3204,7 @@ fn override_dependency_from_workspace_invalid_syntax() -> Result<()> {
     ----- stdout -----
 
     ----- stderr -----
+    warning: Failed to parse `pyproject.toml` during settings discovery; skipping...
     error: Failed to parse: `pyproject.toml`
       Caused by: TOML parse error at line 9, column 29
       |
diff --git a/crates/uv/tests/pip_install.rs b/crates/uv/tests/pip_install.rs
index 076af4ab9a09..5d69ec048880 100644
--- a/crates/uv/tests/pip_install.rs
+++ b/crates/uv/tests/pip_install.rs
@@ -143,6 +143,7 @@ fn invalid_pyproject_toml_syntax() -> Result<()> {
     ----- stdout -----
 
     ----- stderr -----
+    warning: Failed to parse `pyproject.toml` during settings discovery; skipping...
     error: Failed to parse: `pyproject.toml`
       Caused by: TOML parse error at line 1, column 5
       |