diff --git a/tox.ini b/tox.ini
index 0daa127b3..ba53aac71 100644
--- a/tox.ini
+++ b/tox.ini
@@ -2,6 +2,10 @@
 minversion = 3.1
 envlist = py37,pep8
 ignore_basepython_conflict = true
+# Pin setuptools via virtualenv as latest virtualenv pulls in 65.3.0
+# version of setuptools for py37, which causes installation problems
+# (virtualenv 20.16.3 uses setuptools 63.4.1).
+requires = virtualenv<20.16.4
 
 [testenv]
 basepython = python3