diff --git a/CHANGELOG.md b/CHANGELOG.md
index 8cb5ca3f9f..da59ecf8b5 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -58,6 +58,8 @@ END_UNRELEASED_TEMPLATE
   to the package path. This is enabled via the
   `# gazelle:experimental_allow_relative_imports` true directive ({gh-issue}`2203`).
 * (gazelle) Types for exposed members of `python.ParserOutput` are now all public.
+* (gazelle) Removed the requirement for `__init__.py`, `__main__.py`, or `__test__.py` files to be
+  present in a directory to generate a `BUILD.bazel` file.
 
 {#v0-0-0-fixed}
 ### Fixed
diff --git a/gazelle/python/generate.go b/gazelle/python/generate.go
index 5eedbd9601..c1edec4731 100644
--- a/gazelle/python/generate.go
+++ b/gazelle/python/generate.go
@@ -85,8 +85,6 @@ func (py *Python) GenerateRules(args language.GenerateArgs) language.GenerateRes
 			if parent != nil && parent.CoarseGrainedGeneration() {
 				return language.GenerateResult{}
 			}
-		} else if !hasEntrypointFile(args.Dir) {
-			return language.GenerateResult{}
 		}
 	}
 
@@ -172,9 +170,6 @@ func (py *Python) GenerateRules(args language.GenerateArgs) language.GenerateRes
 					//   2. The directory has a BUILD or BUILD.bazel files. Then
 					//       it doesn't matter at all what it has since it's a
 					//       separate Bazel package.
-					//   3. (only for package generation) The directory has an
-					//       __init__.py, __main__.py or __test__.py, meaning a
-					//       BUILD file will be generated.
 					if cfg.PerFileGeneration() {
 						return fs.SkipDir
 					}
@@ -184,7 +179,7 @@ func (py *Python) GenerateRules(args language.GenerateArgs) language.GenerateRes
 						return nil
 					}
 
-					if !cfg.CoarseGrainedGeneration() && hasEntrypointFile(path) {
+					if !cfg.CoarseGrainedGeneration() {
 						return fs.SkipDir
 					}
 
diff --git a/gazelle/python/testdata/subdir_sources/BUILD.in b/gazelle/python/testdata/subdir_sources/BUILD.in
index e69de29bb2..adfdefdc8a 100644
--- a/gazelle/python/testdata/subdir_sources/BUILD.in
+++ b/gazelle/python/testdata/subdir_sources/BUILD.in
@@ -0,0 +1 @@
+# gazelle:python_generation_mode project
diff --git a/gazelle/python/testdata/subdir_sources/BUILD.out b/gazelle/python/testdata/subdir_sources/BUILD.out
index d03a8f05ac..5d77890d4f 100644
--- a/gazelle/python/testdata/subdir_sources/BUILD.out
+++ b/gazelle/python/testdata/subdir_sources/BUILD.out
@@ -1,5 +1,8 @@
+
 load("@rules_python//python:defs.bzl", "py_binary")
 
+# gazelle:python_generation_mode project
+
 py_binary(
     name = "subdir_sources_bin",
     srcs = ["__main__.py"],