diff --git a/internal/templates/0-setup.yaml.tmpl b/internal/templates/0-setup.yaml.tmpl
new file mode 100644
index 0000000..9c9e752
--- /dev/null
+++ b/internal/templates/0-setup.yaml.tmpl
@@ -0,0 +1,16 @@
+# This file belongs to the resource setup step.
+apiVersion: chainsaw.kyverno.io/v1alpha1
+kind: Test
+metadata:
+  name: setup
+spec:
+  timeouts:
+    exec: {{ .TestCase.Timeout }}
+  steps:
+  {{- if .TestCase.SetupScriptPath }}
+  - name: Run Setup Script
+    description: Setup the test environment by running the setup script.
+    try:
+    - command:
+        entrypoint: {{ .TestCase.SetupScriptPath }}
+  {{- end }}
diff --git a/internal/templates/0-setup.yaml.tmpl.license b/internal/templates/0-setup.yaml.tmpl.license
new file mode 100644
index 0000000..2072b73
--- /dev/null
+++ b/internal/templates/0-setup.yaml.tmpl.license
@@ -0,0 +1,3 @@
+SPDX-FileCopyrightText: 2024 The Crossplane Authors <https://crossplane.io>
+
+SPDX-License-Identifier: CC0-1.0
\ No newline at end of file
diff --git a/internal/templates/00-apply.yaml.tmpl b/internal/templates/00-apply.yaml.tmpl
index e9a7d50..1897853 100644
--- a/internal/templates/00-apply.yaml.tmpl
+++ b/internal/templates/00-apply.yaml.tmpl
@@ -9,13 +9,6 @@ spec:
     assert: {{ .TestCase.Timeout }}
     exec: {{ .TestCase.Timeout }}
   steps:
-  {{- if .TestCase.SetupScriptPath }}
-  - name: Run Setup Script
-    description: Setup the test environment by running the setup script.
-    try:
-    - command:
-        entrypoint: {{ .TestCase.SetupScriptPath }}
-  {{- end }}
   - name: Apply Resources
     description: Apply resources to the cluster.
     try:
diff --git a/internal/templates/embed.go b/internal/templates/embed.go
index cadeb6c..70ee1f2 100644
--- a/internal/templates/embed.go
+++ b/internal/templates/embed.go
@@ -6,6 +6,11 @@ package templates
 
 import _ "embed"
 
+// setupFileTemplate is the template for the setup file.
+//
+//go:embed 0-setup.yaml.tmpl
+var setupFileTemplate string
+
 // inputFileTemplate is the template for the input file.
 //
 //go:embed 00-apply.yaml.tmpl
diff --git a/internal/templates/renderer.go b/internal/templates/renderer.go
index a3fb3fd..21bbab7 100644
--- a/internal/templates/renderer.go
+++ b/internal/templates/renderer.go
@@ -16,6 +16,7 @@ import (
 )
 
 var fileTemplates = map[string]string{
+	"0-setup.yaml":   setupFileTemplate,
 	"00-apply.yaml":  inputFileTemplate,
 	"01-update.yaml": updateFileTemplate,
 	"02-import.yaml": importFileTemplate,
@@ -24,6 +25,8 @@ var fileTemplates = map[string]string{
 
 // Render renders the specified list of resources as a test case
 // with the specified configuration.
+//
+// nolint:gocyclo
 func Render(tc *config.TestCase, resources []config.Resource, skipDelete bool) (map[string]string, error) {
 	data := struct {
 		Resources []config.Resource
@@ -35,6 +38,11 @@ func Render(tc *config.TestCase, resources []config.Resource, skipDelete bool) (
 
 	res := make(map[string]string, len(fileTemplates))
 	for name, tmpl := range fileTemplates {
+		// Skip templates with names starting with "0-" if no setup script is set
+		if tc.SetupScriptPath == "" && strings.HasPrefix(name, "0-") {
+			continue
+		}
+
 		// Skip templates with names starting with "01-" if skipUpdate is true
 		if tc.SkipUpdate && strings.HasPrefix(name, "01-") {
 			continue
diff --git a/internal/templates/renderer_test.go b/internal/templates/renderer_test.go
index 59e4300..05755be 100644
--- a/internal/templates/renderer_test.go
+++ b/internal/templates/renderer_test.go
@@ -79,15 +79,13 @@ func TestRender(t *testing.T) {
 			},
 			want: want{
 				out: map[string]string{
-					"00-apply.yaml": `# This file belongs to the resource apply step.
+					"0-setup.yaml": `# This file belongs to the resource setup step.
 apiVersion: chainsaw.kyverno.io/v1alpha1
 kind: Test
 metadata:
-  name: apply
+  name: setup
 spec:
   timeouts:
-    apply: 10m0s
-    assert: 10m0s
     exec: 10m0s
   steps:
   - name: Run Setup Script
@@ -95,6 +93,18 @@ spec:
     try:
     - command:
         entrypoint: /tmp/setup.sh
+`,
+					"00-apply.yaml": `# This file belongs to the resource apply step.
+apiVersion: chainsaw.kyverno.io/v1alpha1
+kind: Test
+metadata:
+  name: apply
+spec:
+  timeouts:
+    apply: 10m0s
+    assert: 10m0s
+    exec: 10m0s
+  steps:
   - name: Apply Resources
     description: Apply resources to the cluster.
     try:
@@ -648,15 +658,13 @@ spec:
 			},
 			want: want{
 				out: map[string]string{
-					"00-apply.yaml": `# This file belongs to the resource apply step.
+					"0-setup.yaml": `# This file belongs to the resource setup step.
 apiVersion: chainsaw.kyverno.io/v1alpha1
 kind: Test
 metadata:
-  name: apply
+  name: setup
 spec:
   timeouts:
-    apply: 10m0s
-    assert: 10m0s
     exec: 10m0s
   steps:
   - name: Run Setup Script
@@ -664,6 +672,18 @@ spec:
     try:
     - command:
         entrypoint: /tmp/setup.sh
+`,
+					"00-apply.yaml": `# This file belongs to the resource apply step.
+apiVersion: chainsaw.kyverno.io/v1alpha1
+kind: Test
+metadata:
+  name: apply
+spec:
+  timeouts:
+    apply: 10m0s
+    assert: 10m0s
+    exec: 10m0s
+  steps:
   - name: Apply Resources
     description: Apply resources to the cluster.
     try:
@@ -979,15 +999,13 @@ func TestRenderWithSkipDelete(t *testing.T) {
 			},
 			want: want{
 				out: map[string]string{
-					"00-apply.yaml": `# This file belongs to the resource apply step.
+					"0-setup.yaml": `# This file belongs to the resource setup step.
 apiVersion: chainsaw.kyverno.io/v1alpha1
 kind: Test
 metadata:
-  name: apply
+  name: setup
 spec:
   timeouts:
-    apply: 10m0s
-    assert: 10m0s
     exec: 10m0s
   steps:
   - name: Run Setup Script
@@ -995,6 +1013,18 @@ spec:
     try:
     - command:
         entrypoint: /tmp/setup.sh
+`,
+					"00-apply.yaml": `# This file belongs to the resource apply step.
+apiVersion: chainsaw.kyverno.io/v1alpha1
+kind: Test
+metadata:
+  name: apply
+spec:
+  timeouts:
+    apply: 10m0s
+    assert: 10m0s
+    exec: 10m0s
+  steps:
   - name: Apply Resources
     description: Apply resources to the cluster.
     try:
@@ -1231,15 +1261,13 @@ spec:
 			},
 			want: want{
 				out: map[string]string{
-					"00-apply.yaml": `# This file belongs to the resource apply step.
+					"0-setup.yaml": `# This file belongs to the resource setup step.
 apiVersion: chainsaw.kyverno.io/v1alpha1
 kind: Test
 metadata:
-  name: apply
+  name: setup
 spec:
   timeouts:
-    apply: 10m0s
-    assert: 10m0s
     exec: 10m0s
   steps:
   - name: Run Setup Script
@@ -1247,6 +1275,18 @@ spec:
     try:
     - command:
         entrypoint: /tmp/setup.sh
+`,
+					"00-apply.yaml": `# This file belongs to the resource apply step.
+apiVersion: chainsaw.kyverno.io/v1alpha1
+kind: Test
+metadata:
+  name: apply
+spec:
+  timeouts:
+    apply: 10m0s
+    assert: 10m0s
+    exec: 10m0s
+  steps:
   - name: Apply Resources
     description: Apply resources to the cluster.
     try:
@@ -1385,15 +1425,13 @@ spec:
 			},
 			want: want{
 				out: map[string]string{
-					"00-apply.yaml": `# This file belongs to the resource apply step.
+					"0-setup.yaml": `# This file belongs to the resource setup step.
 apiVersion: chainsaw.kyverno.io/v1alpha1
 kind: Test
 metadata:
-  name: apply
+  name: setup
 spec:
   timeouts:
-    apply: 10m0s
-    assert: 10m0s
     exec: 10m0s
   steps:
   - name: Run Setup Script
@@ -1401,6 +1439,18 @@ spec:
     try:
     - command:
         entrypoint: /tmp/setup.sh
+`,
+					"00-apply.yaml": `# This file belongs to the resource apply step.
+apiVersion: chainsaw.kyverno.io/v1alpha1
+kind: Test
+metadata:
+  name: apply
+spec:
+  timeouts:
+    apply: 10m0s
+    assert: 10m0s
+    exec: 10m0s
+  steps:
   - name: Apply Resources
     description: Apply resources to the cluster.
     try:
@@ -1639,15 +1689,13 @@ spec:
 			},
 			want: want{
 				out: map[string]string{
-					"00-apply.yaml": `# This file belongs to the resource apply step.
+					"0-setup.yaml": `# This file belongs to the resource setup step.
 apiVersion: chainsaw.kyverno.io/v1alpha1
 kind: Test
 metadata:
-  name: apply
+  name: setup
 spec:
   timeouts:
-    apply: 10m0s
-    assert: 10m0s
     exec: 10m0s
   steps:
   - name: Run Setup Script
@@ -1655,6 +1703,18 @@ spec:
     try:
     - command:
         entrypoint: /tmp/setup.sh
+`,
+					"00-apply.yaml": `# This file belongs to the resource apply step.
+apiVersion: chainsaw.kyverno.io/v1alpha1
+kind: Test
+metadata:
+  name: apply
+spec:
+  timeouts:
+    apply: 10m0s
+    assert: 10m0s
+    exec: 10m0s
+  steps:
   - name: Apply Resources
     description: Apply resources to the cluster.
     try:
@@ -1755,15 +1815,13 @@ spec:
 			},
 			want: want{
 				out: map[string]string{
-					"00-apply.yaml": `# This file belongs to the resource apply step.
+					"0-setup.yaml": `# This file belongs to the resource setup step.
 apiVersion: chainsaw.kyverno.io/v1alpha1
 kind: Test
 metadata:
-  name: apply
+  name: setup
 spec:
   timeouts:
-    apply: 10m0s
-    assert: 10m0s
     exec: 10m0s
   steps:
   - name: Run Setup Script
@@ -1771,6 +1829,18 @@ spec:
     try:
     - command:
         entrypoint: /tmp/setup.sh
+`,
+					"00-apply.yaml": `# This file belongs to the resource apply step.
+apiVersion: chainsaw.kyverno.io/v1alpha1
+kind: Test
+metadata:
+  name: apply
+spec:
+  timeouts:
+    apply: 10m0s
+    assert: 10m0s
+    exec: 10m0s
+  steps:
   - name: Apply Resources
     description: Apply resources to the cluster.
     try:
diff --git a/internal/tester.go b/internal/tester.go
index 1967056..7391aca 100644
--- a/internal/tester.go
+++ b/internal/tester.go
@@ -42,6 +42,7 @@ import (
 )
 
 var testFiles = []string{
+	"0-setup.yaml",
 	"00-apply.yaml",
 	"01-update.yaml",
 	"02-import.yaml",