diff --git a/news/changelog-1.7.md b/news/changelog-1.7.md
index c7c34606525..96449a11ff5 100644
--- a/news/changelog-1.7.md
+++ b/news/changelog-1.7.md
@@ -3,6 +3,7 @@
 ## In this release
 
 - ([#13051](https://github.com/quarto-dev/quarto-cli/issues/13051)): Fixed support for captioned Markdown table inside Div syntax for crossref. This is special handling, but this could be output by function like `knitr::kable()` with old option support.
+- ([#12753](https://github.com/quarto-dev/quarto-cli/issues/12753)): Support change in IPython 9+ and import `set_matplotlib_formats` from `matplotlib_inline.backend_inline` in the internal `setup.py` script used to initialize rendering with Jupyter engine.
 
 ## In previous releases
 
diff --git a/src/resources/jupyter/lang/python/setup.py b/src/resources/jupyter/lang/python/setup.py
index 2206217f8f7..279cd5b2c00 100644
--- a/src/resources/jupyter/lang/python/setup.py
+++ b/src/resources/jupyter/lang/python/setup.py
@@ -22,7 +22,14 @@
   plt.rcParams['figure.figsize'] = (fig_width, fig_height)
   plt.rcParams['figure.dpi'] = fig_dpi
   plt.rcParams['savefig.dpi'] = "figure"
-  from IPython.display import set_matplotlib_formats
+
+  # IPython 7.14 deprecated set_matplotlib_formats from IPython
+  try:
+    from matplotlib_inline.backend_inline import set_matplotlib_formats
+  except ImportError:
+    # Fall back to deprecated location for older IPython versions
+    from IPython.display import set_matplotlib_formats
+    
   set_matplotlib_formats(fig_format)
 except Exception:
   pass
diff --git a/tests/docs/smoke-all/jupyter/fig-format/matplotlib-svg.qmd b/tests/docs/smoke-all/jupyter/fig-format/matplotlib-svg.qmd
new file mode 100644
index 00000000000..e79395b6cb7
--- /dev/null
+++ b/tests/docs/smoke-all/jupyter/fig-format/matplotlib-svg.qmd
@@ -0,0 +1,28 @@
+---
+title: Get SVG from matplotlib
+format:
+  html:
+    fig-format: svg
+_quarto:
+  tests:
+    html:
+      ensureHtmlElements:
+        - ['figure.figure img[src$=".svg"]']
+        - ['figure.figure img[src$=".png"]']
+---
+
+```{python}
+import matplotlib.pyplot as plt
+import numpy as np
+
+fig, ax = plt.subplots()
+
+x = np.linspace(0, 4 * np.pi, 100)
+y1 = np.sin(x)
+y2 = np.cos(x)
+
+ax.set_title("Sine and Cosine")
+ax.plot(x, y1)
+ax.plot(x, y2)
+ax.legend(["Sine", "Cosine"])
+```