diff --git a/.github/workflows/build.yml b/.github/workflows/build.yml
index 475b8618..18e6d4d3 100644
--- a/.github/workflows/build.yml
+++ b/.github/workflows/build.yml
@@ -15,10 +15,10 @@ jobs:
     strategy:
       matrix:
         os: [ubuntu-latest, macos-latest, windows-latest]
-        python: ['3.9', '3.10', '3.11']
+        python: ['3.10', '3.11']
 
     steps:
-      - uses: compas-dev/compas-actions.build@v3
+      - uses: compas-dev/compas-actions.build@v4
         with:
           python: ${{ matrix.python }}
           invoke_lint: true
@@ -33,16 +33,20 @@ jobs:
     steps:
       - uses: actions/checkout@v2
       - name: Install dependencies
+        shell: cmd
         run: |
           curl -o compas.tar.gz -LJO https://pypi.debian.net/compas/latest
           curl -o ironpython-pytest.tar.gz -LJO https://pypi.debian.net/ironpython-pytest/latest
           choco install ironpython --version=2.7.8.1
           ipy -X:Frames -m ensurepip
-          ipy -X:Frames -m pip install --no-deps compas.tar.gz
           ipy -X:Frames -m pip install --no-deps ironpython-pytest.tar.gz
+
+          rem untar and rename, these cannot be installed using ironpip because they not longer have a setup.py
+          tar -xf compas.tar.gz && for /d %%i in (compas-*) do ren "%%i" compas
+
       - name: Run tests
         env:
-          IRONPYTHONPATH: ./src
+          IRONPYTHONPATH: ./src;./compas/src
         run: |
           ipy -m pytest tests/unit
 
@@ -54,7 +58,7 @@ jobs:
         run: |
           docker run -d --name nanomq -p 1883:1883 -p 8083:8083 -p 8883:8883 emqx/nanomq:latest
           docker ps -a
-      - uses: compas-dev/compas-actions.build@v3
+      - uses: compas-dev/compas-actions.build@v4
         with:
           python: '3.11'
           invoke_lint: false
diff --git a/.github/workflows/release.yml b/.github/workflows/release.yml
index 2cb6a5cd..3e15e9b0 100644
--- a/.github/workflows/release.yml
+++ b/.github/workflows/release.yml
@@ -11,10 +11,10 @@ jobs:
     strategy:
       matrix:
         os: [ubuntu-latest, macos-latest, windows-latest]
-        python: ['3.9', '3.10', '3.11']
+        python: ['3.10', '3.11']
 
     steps:
-      - uses: compas-dev/compas-actions.build@v3
+      - uses: compas-dev/compas-actions.build@v4
         with:
           python: ${{ matrix.python }}
           invoke_lint: true
@@ -31,7 +31,7 @@ jobs:
         run: |
           docker run -d --name nanomq -p 1883:1883 -p 8083:8083 -p 8883:8883 emqx/nanomq:latest
           docker ps -a
-      - uses: compas-dev/compas-actions.build@v3
+      - uses: compas-dev/compas-actions.build@v4
         with:
           python: '3.11'
           invoke_lint: false
@@ -100,7 +100,6 @@ jobs:
         run: |
           python -m pip install --upgrade pip
           python -m pip install wheel
-          python -m pip install --no-cache-dir -r requirements-dev.txt
 
       - uses: NuGet/setup-nuget@v1.0.5
       - name: Install dependencies
diff --git a/CHANGELOG.md b/CHANGELOG.md
index ebd84398..98a18f01 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -9,8 +9,12 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ### Added
 
+* Added support for MQTT-PAHO 2.0 versioned callbacks.
+
 ### Changed
 
+* Updated dependency on `paho-mqtt` to support `>=1, <3` to include version `2.x` with backward compatibility.
+
 ### Removed
 
 
diff --git a/CONTRIBUTING.md b/CONTRIBUTING.md
index 9b074b31..bdb06dba 100644
--- a/CONTRIBUTING.md
+++ b/CONTRIBUTING.md
@@ -12,7 +12,7 @@ In short, this is how that works.
 3. Install development dependencies:
 
    ```bash
-   pip install -r requirements-dev.txt
+   pip install -e .[dev]
    ```
 
 4. Make sure all tests pass:
diff --git a/MANIFEST.in b/MANIFEST.in
index aa3c2a5a..650f9db9 100644
--- a/MANIFEST.in
+++ b/MANIFEST.in
@@ -13,6 +13,8 @@ include AUTHORS.md
 include CHANGELOG.md
 include requirements.txt
 
+recursive-include examples *.py
+
 exclude compas_eve.jpg
 exclude requirements-dev.txt
 exclude pytest.ini .bumpversion.cfg .editorconfig
diff --git a/examples/mqtt_compatibility_demo.py b/examples/mqtt_compatibility_demo.py
new file mode 100644
index 00000000..46f227fc
--- /dev/null
+++ b/examples/mqtt_compatibility_demo.py
@@ -0,0 +1,64 @@
+#!/usr/bin/env python3
+"""
+Demonstration script to show MQTT-PAHO 2.0 compatibility.
+
+This script demonstrates that the MqttTransport can work with both
+paho-mqtt 1.x and 2.x versions automatically.
+"""
+
+import sys
+import os
+
+# Add the src directory to the path to import compas_eve
+sys.path.insert(0, os.path.join(os.path.dirname(__file__), '..', 'src'))
+
+def main():
+    print("COMPAS Eve MQTT-PAHO 2.0 Compatibility Demonstration")
+    print("=" * 55)
+    
+    try:
+        # Import and check version compatibility
+        from compas_eve.mqtt.mqtt_paho import PAHO_MQTT_V2_AVAILABLE
+        import paho.mqtt
+        
+        print(f"paho-mqtt version: {paho.mqtt.__version__}")
+        print(f"MQTT-PAHO 2.0 support available: {PAHO_MQTT_V2_AVAILABLE}")
+        print()
+        
+        # Try to create transport (will fail due to network but shows client creation works)
+        try:
+            from compas_eve.mqtt.mqtt_paho import MqttTransport
+            print("Attempting to create MqttTransport (will fail due to no broker)...")
+            transport = MqttTransport('nonexistent-broker.local')
+            print("✓ Transport created successfully")
+        except Exception as e:
+            if "No address associated with hostname" in str(e) or "gaierror" in str(e):
+                print("✓ Client creation successful (expected network error)")
+            else:
+                print(f"❌ Unexpected error: {e}")
+                raise
+        
+        print()
+        print("Compatibility verification:")
+        if PAHO_MQTT_V2_AVAILABLE:
+            from paho.mqtt.enums import CallbackAPIVersion
+            print(f"✓ Using MQTT-PAHO 2.0 with CallbackAPIVersion.VERSION1")
+            print(f"✓ CallbackAPIVersion available: {hasattr(CallbackAPIVersion, 'VERSION1')}")
+        else:
+            print("✓ Using MQTT-PAHO 1.x legacy mode")
+            print("✓ No CallbackAPIVersion required")
+            
+        print()
+        print("🎉 All compatibility checks passed!")
+        
+    except ImportError as e:
+        print(f"❌ Import error: {e}")
+        return 1
+    except Exception as e:
+        print(f"❌ Unexpected error: {e}")
+        return 1
+        
+    return 0
+
+if __name__ == "__main__":
+    sys.exit(main())
\ No newline at end of file
diff --git a/requirements.txt b/requirements.txt
index c9d1c1e1..2e3d9172 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -1,2 +1,2 @@
 compas>=1.17.6
-paho-mqtt >=1, <2
+paho-mqtt >=1, <3
diff --git a/setup.py b/setup.py
index 4d7cfeec..a1dad09e 100644
--- a/setup.py
+++ b/setup.py
@@ -21,7 +21,17 @@ def read(*names, **kwargs):
 
 long_description = read("README.md")
 requirements = read("requirements.txt").split("\n")
-optional_requirements = {}
+
+# Read dev requirements for optional dependencies
+dev_requirements = [
+    line.strip() 
+    for line in read("requirements-dev.txt").split("\n") 
+    if line.strip() and not line.strip().startswith("#") and line.strip() != "-e ."
+]
+
+optional_requirements = {
+    "dev": dev_requirements,
+}
 
 setup(
     name="compas_eve",
diff --git a/src/compas_eve/mqtt/mqtt_paho.py b/src/compas_eve/mqtt/mqtt_paho.py
index 6ded69ed..d9826a8c 100644
--- a/src/compas_eve/mqtt/mqtt_paho.py
+++ b/src/compas_eve/mqtt/mqtt_paho.py
@@ -2,6 +2,14 @@
 from ..event_emitter import EventEmitterMixin
 
 import paho.mqtt.client as mqtt
+import uuid
+
+try:
+    from paho.mqtt.enums import CallbackAPIVersion
+
+    PAHO_MQTT_V2_AVAILABLE = True
+except ImportError:
+    PAHO_MQTT_V2_AVAILABLE = False
 
 
 class MqttTransport(Transport, EventEmitterMixin):
@@ -14,15 +22,23 @@ class MqttTransport(Transport, EventEmitterMixin):
         you are running a local broker on your machine.
     port : int
         MQTT broker port, defaults to ``1883``.
+    client_id : str, optional
+        Client ID for the MQTT connection. If not provided, a unique ID will be generated.
     """
 
-    def __init__(self, host, port=1883, *args, **kwargs):
+    def __init__(self, host, port=1883, client_id=None, *args, **kwargs):
         super(MqttTransport, self).__init__(*args, **kwargs)
         self.host = host
         self.port = port
         self._is_connected = False
         self._local_callbacks = {}
-        self.client = mqtt.Client()  # todo: generate client_id
+        # Generate client ID if not provided
+        if client_id is None:
+            client_id = "compas_eve_{}".format(uuid.uuid4().hex[:8])
+        if PAHO_MQTT_V2_AVAILABLE:
+            self.client = mqtt.Client(client_id=client_id, callback_api_version=CallbackAPIVersion.VERSION1)
+        else:
+            self.client = mqtt.Client(client_id=client_id)
         self.client.on_connect = self._on_connect
         self.client.connect(self.host, self.port)
         self.client.loop_start()
diff --git a/tests/integration/test_mqtt.py b/tests/integration/test_mqtt.py
index 69acc17b..05c9fa9e 100644
--- a/tests/integration/test_mqtt.py
+++ b/tests/integration/test_mqtt.py
@@ -9,7 +9,16 @@
 from compas_eve import set_default_transport
 from compas_eve.mqtt import MqttTransport
 
-HOST = "broker.hivemq.com"
+HOST = "localhost"
+
+
+def test_client_id():
+    custom_client_id = "my_custom_client_id"
+    transport = MqttTransport(HOST, client_id=custom_client_id)
+    assert transport.client._client_id == custom_client_id.encode("utf-8")
+
+    transport = MqttTransport(HOST, client_id=None)
+    assert transport.client._client_id.startswith("compas_eve_".encode("utf-8"))
 
 
 def test_default_transport_publishing():
diff --git a/tests/unit/test_mqtt_paho_compatibility.py b/tests/unit/test_mqtt_paho_compatibility.py
new file mode 100644
index 00000000..c9b18399
--- /dev/null
+++ b/tests/unit/test_mqtt_paho_compatibility.py
@@ -0,0 +1,47 @@
+import sys
+
+if sys.platform != "cli":
+    import pytest
+    from unittest.mock import Mock, patch
+    from compas_eve.mqtt.mqtt_paho import MqttTransport, PAHO_MQTT_V2_AVAILABLE
+
+    def test_paho_mqtt_v1_compatibility():
+        with patch("compas_eve.mqtt.mqtt_paho.PAHO_MQTT_V2_AVAILABLE", False), patch(
+            "paho.mqtt.client.Client"
+        ) as mock_client_class:
+
+            mock_client = Mock()
+            mock_client_class.return_value = mock_client
+
+            # This should work as if paho-mqtt 1.x is installed
+            transport = MqttTransport("localhost")
+
+            # Should have called mqtt.Client() with client_id parameter only (no callback_api_version)
+            mock_client_class.assert_called_once()
+            call_args = mock_client_class.call_args
+            assert "client_id" in call_args.kwargs
+            assert call_args.kwargs["client_id"].startswith("compas_eve_")
+            assert "callback_api_version" not in call_args.kwargs
+            assert transport.client == mock_client
+
+    def test_paho_mqtt_v2_compatibility():
+        if not PAHO_MQTT_V2_AVAILABLE:
+            pytest.skip("paho-mqtt 2.x not available in this environment")
+
+        with patch("paho.mqtt.client.Client") as mock_client_class:
+            from paho.mqtt.enums import CallbackAPIVersion
+
+            mock_client = Mock()
+            mock_client_class.return_value = mock_client
+
+            # This should work as if paho-mqtt 2.x is installed
+            transport = MqttTransport("localhost")
+
+            # Should have called mqtt.Client() with both client_id and callback_api_version parameters
+            mock_client_class.assert_called_once()
+            call_args = mock_client_class.call_args
+            assert "client_id" in call_args.kwargs
+            assert call_args.kwargs["client_id"].startswith("compas_eve_")
+            assert "callback_api_version" in call_args.kwargs
+            assert call_args.kwargs["callback_api_version"] == CallbackAPIVersion.VERSION1
+            assert transport.client == mock_client