diff --git a/build.sc b/build.sc
index 12ebd87a15..3a6d663941 100644
--- a/build.sc
+++ b/build.sc
@@ -398,6 +398,7 @@ trait Core extends ScalaCliSbtModule with ScalaCliPublishModule with HasTests
          |
          |  def toolkitOrganization = "${Deps.toolkit.dep.module.organization.value}"
          |  def toolkitName = "${Deps.toolkit.dep.module.name.value}"
+         |  def typelevelOrganization = "org.typelevel"
          |
          |  def defaultScalaVersion = "${Scala.defaultUser}"
          |  def defaultScala212Version = "${Scala.scala212}"
diff --git a/modules/build/src/test/scala/scala/build/tests/DirectiveTests.scala b/modules/build/src/test/scala/scala/build/tests/DirectiveTests.scala
index f9acf82e0f..5edb54e29e 100644
--- a/modules/build/src/test/scala/scala/build/tests/DirectiveTests.scala
+++ b/modules/build/src/test/scala/scala/build/tests/DirectiveTests.scala
@@ -107,4 +107,23 @@ class DirectiveTests extends munit.FunSuite {
     }
   }
 
+  test("resolve typelevel toolkit dependency") {
+    val testInputs = TestInputs(
+      os.rel / "simple.sc" ->
+        """//> using toolkit "typelevel:latest"
+          |""".stripMargin
+    )
+    testInputs.withBuild(baseOptions, buildThreads, bloopConfigOpt) {
+      (_, _, maybeBuild) =>
+        val build = maybeBuild.orThrow
+        val dep   = build.options.classPathOptions.extraDependencies.toSeq.headOption
+        assert(dep.nonEmpty)
+
+        val toolkitDep = dep.get.value
+        expect(toolkitDep.organization == "org.typelevel")
+        expect(toolkitDep.name == "toolkit")
+        expect(toolkitDep.version == "latest.release")
+    }
+  }
+
 }
diff --git a/modules/cli/src/test/scala/cli/commands/tests/RunOptionsTests.scala b/modules/cli/src/test/scala/cli/commands/tests/RunOptionsTests.scala
index ae7aad126a..3aa077bbcd 100644
--- a/modules/cli/src/test/scala/cli/commands/tests/RunOptionsTests.scala
+++ b/modules/cli/src/test/scala/cli/commands/tests/RunOptionsTests.scala
@@ -36,4 +36,20 @@ class RunOptionsTests extends munit.FunSuite {
     expect(toolkitDep.version == "latest.release")
   }
 
+  test("resolve typelevel toolkit dependency") {
+    val runOptions = RunOptions(
+      shared = SharedOptions(
+        withToolkit = Some("typelevel:latest")
+      )
+    )
+    val buildOptions = Run.buildOptions(runOptions).value
+    val dep          = buildOptions.classPathOptions.extraDependencies.toSeq.headOption
+    assert(dep.nonEmpty)
+
+    val toolkitDep = dep.get.value
+    expect(toolkitDep.organization == "org.typelevel")
+    expect(toolkitDep.name == "toolkit")
+    expect(toolkitDep.version == "latest.release")
+  }
+
 }
diff --git a/modules/directives/src/main/scala/scala/build/preprocessing/directives/Toolkit.scala b/modules/directives/src/main/scala/scala/build/preprocessing/directives/Toolkit.scala
index 67122dd7e4..87298818ab 100644
--- a/modules/directives/src/main/scala/scala/build/preprocessing/directives/Toolkit.scala
+++ b/modules/directives/src/main/scala/scala/build/preprocessing/directives/Toolkit.scala
@@ -39,9 +39,17 @@ final case class Toolkit(
 }
 
 object Toolkit {
-  def resolveDependency(toolkitVersion: Positioned[String]) = toolkitVersion.map(version =>
-    val v = if version == "latest" then "latest.release" else version
-    dep"${Constants.toolkitOrganization}::${Constants.toolkitName}::$v,toolkit"
+  def resolveDependency(toolkitCoord: Positioned[String]) = toolkitCoord.map(coord =>
+    val tokens  = coord.split(':')
+    val version = tokens.last
+    val v       = if version == "latest" then "latest.release" else version
+    val flavor  = tokens.dropRight(1).headOption
+    val org = flavor match {
+      case Some("typelevel") => Constants.typelevelOrganization
+      case Some(org)         => org
+      case None              => Constants.toolkitOrganization
+    }
+    dep"$org::${Constants.toolkitName}::$v,toolkit"
   )
   val handler: DirectiveHandler[Toolkit] = DirectiveHandler.derive
 }
diff --git a/modules/integration/src/test/scala/scala/cli/integration/DependencyUpdateTests.scala b/modules/integration/src/test/scala/scala/cli/integration/DependencyUpdateTests.scala
index 74ba455b35..9841473672 100644
--- a/modules/integration/src/test/scala/scala/cli/integration/DependencyUpdateTests.scala
+++ b/modules/integration/src/test/scala/scala/cli/integration/DependencyUpdateTests.scala
@@ -60,4 +60,33 @@ class DependencyUpdateTests extends ScalaCliSuite {
       expect(Version(updatedToolkitVersion) > Version(toolkitVersion))
     }
   }
+
+  test("update typelevel toolkit dependence") {
+    val toolkitVersion = "0.0.1"
+    val testInputs = TestInputs(
+      os.rel / "Foo.scala" ->
+        s"""//> using toolkit "typelevel:$toolkitVersion"
+           |
+           |import cats.effect.*
+           |
+           |object Hello extends IOApp.Simple {
+           |  def run = IO.println("Hello")
+           |}
+           |""".stripMargin
+    )
+    testInputs.fromRoot { root =>
+      // update toolkit
+      os.proc(TestUtil.cli, "--power", "dependency-update", "--all", ".")
+        .call(cwd = root)
+
+      val toolkitDirective = "//> using toolkit \"(.*)\"".r
+      val updatedToolkitVersionOpt = {
+        val regexMatch = toolkitDirective.findFirstMatchIn(os.read(root / "Foo.scala"))
+        regexMatch.map(_.group(1))
+      }
+      expect(updatedToolkitVersionOpt.nonEmpty)
+      val updatedToolkitVersion = updatedToolkitVersionOpt.get
+      expect(Version(updatedToolkitVersion) > Version(toolkitVersion))
+    }
+  }
 }
diff --git a/modules/integration/src/test/scala/scala/cli/integration/RunTestDefinitions.scala b/modules/integration/src/test/scala/scala/cli/integration/RunTestDefinitions.scala
index c8ee14194b..bdf5423e64 100644
--- a/modules/integration/src/test/scala/scala/cli/integration/RunTestDefinitions.scala
+++ b/modules/integration/src/test/scala/scala/cli/integration/RunTestDefinitions.scala
@@ -1129,6 +1129,26 @@ abstract class RunTestDefinitions(val scalaVersionOpt: Option[String])
     }
   }
 
+  test("should add typelevel toolkit to classpath") {
+    val inputs = TestInputs(
+      os.rel / "Hello.scala" ->
+        s"""|import cats.effect.*
+            |import fs2.io.file.Files
+            |object Hello extends IOApp.Simple {
+            |  // IO should be added to classpath by typelevel toolkit
+            |  def run = Files[IO].currentWorkingDirectory.flatMap { cwd =>
+            |    IO.println(cwd.toString)
+            |  }
+            |}""".stripMargin
+    )
+    inputs.fromRoot { root =>
+      val output = os.proc(TestUtil.cli, ".", "--toolkit", "typelevel:0.0.1")
+        .call(cwd = root).out.trim()
+
+      expect(output == root.toString())
+    }
+  }
+
   test(s"print error if workspace path contains a ${File.pathSeparator}") {
     val msg     = "Hello"
     val relPath = os.rel / s"weird${File.pathSeparator}directory" / "Hello.scala"