diff --git a/INSTALL b/INSTALL
index 6583d9de4420..7520cb88aff3 100644
--- a/INSTALL
+++ b/INSTALL
@@ -93,6 +93,10 @@ or you can install all packages needed to run tests for core, providers, and all
 
 You can see the list of all available extras below.
 
+Additionally when you want to develop providers you need to install providers code in editable mode:
+
+    pip install -e "./providers"
+
 # Using Hatch to manage your Python, virtualenvs, and build packages
 
 Airflow uses [hatch](https://hatch.pypa.io/) as a build and development tool. It is one of the popular
diff --git a/contributing-docs/07_local_virtualenv.rst b/contributing-docs/07_local_virtualenv.rst
index a5238bfe829b..3e7c154508c4 100644
--- a/contributing-docs/07_local_virtualenv.rst
+++ b/contributing-docs/07_local_virtualenv.rst
@@ -125,6 +125,25 @@ The full list of extras is available in `pyproject.toml <../pyproject.toml>`_ an
    If you wish to install airflow using those tools you should use the constraint files and convert
    them to appropriate format and workflow that your tool requires.
 
+Developing community providers in local virtualenv
+..................................................
+
+While the above installation is good enough to work on Airflow code, in order to develop
+providers, you also need to install them in the virtualenv you work on (after installing
+the extras in airflow, that correspond to the provider you want to develop).
+
+If you want to develop google providers, for example you can run the following commands:
+
+.. code:: bash
+
+    pip install -e ".[devel,devel-tests,google]"
+    pip install -e "./providers"
+
+The first command installs airflow, it's development dependencies, test dependencies and
+both runtime and development dependencies of the google provider.
+
+The second one installs providers source code in development mode, so that modifications
+to the cod are automatically reflected in your installed virtualenv.
 
 Using Hatch
 -----------