diff --git a/tests/unittest/test_pip_install.py b/tests/unittest/test_pip_install.py
index 346b5051ac..e0e2599eb0 100644
--- a/tests/unittest/test_pip_install.py
+++ b/tests/unittest/test_pip_install.py
@@ -77,12 +77,17 @@ def get_cpython_version():
     return "cp{}{}".format(python_version[0], python_version[1])
 
 
-def download_wheel(args):
-    if not args.wheel_path.startswith(("http://", "https://")):
-        args.wheel_path = "https://" + args.wheel_path
-    res = requests.get(args.wheel_path)
+def get_wheel_url(wheel_path):
+    """Get direct wheel URL from wheel_path (directory listing or direct URL)."""
+    if not wheel_path.startswith(("http://", "https://")):
+        wheel_path = "https://" + wheel_path
+
+    if wheel_path.endswith(".whl"):
+        return wheel_path
+
+    res = requests.get(wheel_path)
     if res.status_code != 200:
-        print(f"Fail to get the result of {args.wheel_path}")
+        print(f"Fail to get the result of {wheel_path}")
         exit(1)
     wheel_name = None
     for line in res.text.split("\n"):
@@ -96,11 +101,15 @@ def download_wheel(args):
         wheel_name = name
         break
     if not wheel_name:
-        print(f"Fail to get the wheel name of {args.wheel_path}")
+        print(f"Fail to get the wheel name of {wheel_path}")
         exit(1)
-    if args.wheel_path[-1] == "/":
-        args.wheel_path = args.wheel_path[:-1]
-    wheel_url = f"{args.wheel_path}/{wheel_name}"
+    if wheel_path[-1] == "/":
+        wheel_path = wheel_path[:-1]
+    return f"{wheel_path}/{wheel_name}"
+
+
+def download_wheel(args):
+    wheel_url = get_wheel_url(args.wheel_path)
     subprocess.check_call("rm *.whl || true", shell=True)
     subprocess.check_call(f"apt-get install -y wget && wget -q {wheel_url}",
                           shell=True)
@@ -168,28 +177,8 @@ def create_link_for_models():
             os.symlink(src, dst, target_is_directory=True)
 
 
-def test_pip_install():
-    parser = argparse.ArgumentParser(description="Check Pip Install")
-    parser.add_argument("--wheel_path",
-                        type=str,
-                        required=False,
-                        default="Default",
-                        help="The wheel path")
-    args = parser.parse_args()
-
-    print("##########  Install required system libs  ##########")
-    if not os.path.exists("/usr/local/mpi/bin/mpicc"):
-        subprocess.check_call("apt-get -y install libopenmpi-dev", shell=True)
-
-    subprocess.check_call("apt-get -y install libzmq3-dev", shell=True)
-    subprocess.check_call("apt-get -y install python3-pip", shell=True)
-    subprocess.check_call("pip3 install --upgrade pip || true", shell=True)
-    subprocess.check_call("pip3 install --upgrade setuptools || true",
-                          shell=True)
-
-    download_wheel(args)
-    install_tensorrt_llm()
-
+def run_sanity_check(examples_path="../../examples"):
+    """Run sanity checks after installation."""
     print("##########  Test import tensorrt_llm  ##########")
     subprocess.check_call(
         'python3 -c "import tensorrt_llm; print(tensorrt_llm.__version__)"',
@@ -202,8 +191,81 @@ def test_pip_install():
 
     print("##########  Test quickstart example  ##########")
     subprocess.check_call(
-        "python3 ../../examples/llm-api/quickstart_example.py", shell=True)
+        f"python3 {examples_path}/llm-api/quickstart_example.py", shell=True)
+
+
+def install_system_libs():
+    """Install required system libraries for tensorrt_llm."""
+    print("##########  Install required system libs  ##########")
+    if not os.path.exists("/usr/local/mpi/bin/mpicc"):
+        subprocess.check_call("apt-get -y install libopenmpi-dev", shell=True)
+
+    subprocess.check_call("apt-get -y install libzmq3-dev", shell=True)
+    subprocess.check_call("apt-get -y install python3-pip", shell=True)
+    subprocess.check_call("pip3 install --upgrade pip || true", shell=True)
+    subprocess.check_call("pip3 install --upgrade setuptools || true",
+                          shell=True)
+
+
+def test_pip_install(args):
+    install_system_libs()
+
+    download_wheel(args)
+    install_tensorrt_llm()
+
+    run_sanity_check()
+
+
+def test_python_builds(args):
+    """Test Python builds using precompiled wheel (sanity check only).
+
+    This test verifies the TRTLLM_PRECOMPILED_LOCATION workflow:
+    1. Install required system libs
+    2. Use precompiled wheel URL to extract C++ bindings
+    3. Build Python-only wheel (editable install with --no-deps)
+    4. Verify installation works correctly
+    5. Run quickstart example
+    6. Clean up editable install to leave env in clean state
+    """
+    print("##########  Python Builds Test  ##########")
+
+    install_system_libs()
+
+    wheel_url = get_wheel_url(args.wheel_path)
+    print(f"Using precompiled wheel: {wheel_url}")
+
+    repo_root = os.path.abspath(
+        os.path.join(os.path.dirname(__file__), "..", ".."))
+    print(f"Repository root: {repo_root}")
+
+    # Uninstall existing tensorrt_llm to test fresh editable install
+    subprocess.run("pip3 uninstall -y tensorrt_llm || true",
+                   shell=True,
+                   check=False)
+
+    print("##########  Install with TRTLLM_PRECOMPILED_LOCATION  ##########")
+    env = os.environ.copy()
+    env["TRTLLM_PRECOMPILED_LOCATION"] = wheel_url
+
+    # Use --no-deps to avoid changing torch/torchvision versions.
+    subprocess.check_call(["pip3", "install", "-e", ".", "--no-deps", "-v"],
+                          cwd=repo_root,
+                          env=env)
+    run_sanity_check(examples_path=f"{repo_root}/examples")
+
+    # Clean up: uninstall editable install to leave env in clean state
+    print("##########  Clean up editable install  ##########")
+    subprocess.run("pip3 uninstall -y tensorrt_llm || true",
+                   shell=True,
+                   check=False)
 
 
 if __name__ == "__main__":
-    test_pip_install()
+    parser = argparse.ArgumentParser(description="Check Pip Install")
+    parser.add_argument("--wheel_path",
+                        type=str,
+                        required=True,
+                        help="The wheel path")
+    args = parser.parse_args()
+    test_python_builds(args)
+    test_pip_install(args)