diff --git a/.gitignore b/.gitignore
index 39ac6c3da..2d0b3cec3 100644
--- a/.gitignore
+++ b/.gitignore
@@ -4,3 +4,6 @@
 
 # editor related
 .idea/
+
+# macOS related
+.DS_Store
diff --git a/waspc/.gitignore b/waspc/.gitignore
index eab48d824..f0b0addec 100644
--- a/waspc/.gitignore
+++ b/waspc/.gitignore
@@ -13,3 +13,6 @@ module-graph.png
 .dir-locals.el
 .projectile
 .vscode
+
+# macOS related
+.DS_Store
diff --git a/waspc/README.md b/waspc/README.md
index c4e43f131..06c5142cf 100644
--- a/waspc/README.md
+++ b/waspc/README.md
@@ -103,7 +103,7 @@ NOTE: Reload page if blank.
 1. Create a new feature branch from `main`.
 2. If you don't have a good/reliable working HLS (Haskell Language Server) in your IDE, you will want to instead run `./run ghcid` from the root of the project instead: this will run a process that watches the Haskell project and reports any Haskell compiler errors. Leave it running.  
    NOTE: You will need to install `ghcid` globally first. You can do it with `cabal install ghcid`.
-3. Do a change in the codebase (most often in `lib/` or `cli/` or `data/`) (together with tests if that makes sense: see "Tests").
+3. Do a change in the codebase (most often in `src/` or `cli/src/` or `data/`) (together with tests if that makes sense: see "Tests").
    Fix any errors shown by HLS/`ghcid`.
    Rinse and repeat.
 4. Once close to done, run `cabal test` to confirm that the project's tests are passing (both new and old).
@@ -138,7 +138,7 @@ Others will comment on your design doc, and once it has gone through needed iter
 ## Codebase overview
 Wasp is implemented in Haskell.
 
-Codebase is split into library (`src/`) and CLI (`cli/`).
+Codebase is split into library (`src/`) and CLI (which itself has a library `cli/src/` and thin executable wrapper `cli/exe/`).
 CLI is actually `wasp` executable, and it uses the library, where most of the logic is.
 
 Wasp compiler takes .wasp files + everything in the `ext/` dir (JS, HTML, ...) and generates a web app that consists of client, server and database.
@@ -172,8 +172,9 @@ On any changes you do to the source code of Wasp, Wasp project gets recompiled,
 
 ## Important directories (in waspc/)
 - src/ -> main source code, library
-- cli/ -> rest of the source code, cli, uses library
-- test/ -> tests
+- cli/src/ -> rest of the source code, cli, uses library
+- cli/exe/ -> thin executable wrapper around cli library code
+- test/, e2e-test/, cli/test/ -> tests
 - data/Generator/templates/ -> mustache templates for the generated client/server.
 - examples/ -> example apps
 
@@ -244,6 +245,8 @@ Tests are run with `cabal test`. They include both unit tests, and end-to-end te
 To run unit tests only, you can do `cabal test waspc-test` (or `./run test:unit`).
 To run individual unit test, you can do `cabal test waspc-test --test-options "-p \"Some test description to match\""` (or just `./run test:unit "Some test description to match"`).
 
+To run cli tests only, you can do `cabal test cli-test` (or `./run test:cli`).
+
 To run end-to-end tests only, you can do `cabal test e2e-test` (or `/run test:e2e`).
 
 ## Code analysis
diff --git a/waspc/cli/Main.hs b/waspc/cli/exe/Main.hs
similarity index 99%
rename from waspc/cli/Main.hs
rename to waspc/cli/exe/Main.hs
index 57e7eed84..690f17b8a 100644
--- a/waspc/cli/Main.hs
+++ b/waspc/cli/exe/Main.hs
@@ -7,7 +7,7 @@ import Control.Monad (void)
 import Data.Char (isSpace)
 import Data.Version (showVersion)
 import Paths_waspc (version)
-import System.Environment
+import System.Environment (getArgs)
 import Wasp.Cli.Command (runCommand)
 import Wasp.Cli.Command.BashCompletion (bashCompletion, generateBashCompletionScript, printBashCompletionInstruction)
 import Wasp.Cli.Command.Build (build)
diff --git a/waspc/cli/Wasp/Cli/Command.hs b/waspc/cli/src/Wasp/Cli/Command.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command.hs
rename to waspc/cli/src/Wasp/Cli/Command.hs
diff --git a/waspc/cli/Wasp/Cli/Command/BashCompletion.hs b/waspc/cli/src/Wasp/Cli/Command/BashCompletion.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/BashCompletion.hs
rename to waspc/cli/src/Wasp/Cli/Command/BashCompletion.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Build.hs b/waspc/cli/src/Wasp/Cli/Command/Build.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Build.hs
rename to waspc/cli/src/Wasp/Cli/Command/Build.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Call.hs b/waspc/cli/src/Wasp/Cli/Command/Call.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Call.hs
rename to waspc/cli/src/Wasp/Cli/Command/Call.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Clean.hs b/waspc/cli/src/Wasp/Cli/Command/Clean.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Clean.hs
rename to waspc/cli/src/Wasp/Cli/Command/Clean.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Common.hs b/waspc/cli/src/Wasp/Cli/Command/Common.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Common.hs
rename to waspc/cli/src/Wasp/Cli/Command/Common.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Compile.hs b/waspc/cli/src/Wasp/Cli/Command/Compile.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Compile.hs
rename to waspc/cli/src/Wasp/Cli/Command/Compile.hs
diff --git a/waspc/cli/Wasp/Cli/Command/CreateNewProject.hs b/waspc/cli/src/Wasp/Cli/Command/CreateNewProject.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/CreateNewProject.hs
rename to waspc/cli/src/Wasp/Cli/Command/CreateNewProject.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Db.hs b/waspc/cli/src/Wasp/Cli/Command/Db.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Db.hs
rename to waspc/cli/src/Wasp/Cli/Command/Db.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Db/Migrate.hs b/waspc/cli/src/Wasp/Cli/Command/Db/Migrate.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Db/Migrate.hs
rename to waspc/cli/src/Wasp/Cli/Command/Db/Migrate.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Deps.hs b/waspc/cli/src/Wasp/Cli/Command/Deps.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Deps.hs
rename to waspc/cli/src/Wasp/Cli/Command/Deps.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Info.hs b/waspc/cli/src/Wasp/Cli/Command/Info.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Info.hs
rename to waspc/cli/src/Wasp/Cli/Command/Info.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Message.hs b/waspc/cli/src/Wasp/Cli/Command/Message.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Message.hs
rename to waspc/cli/src/Wasp/Cli/Command/Message.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Start.hs b/waspc/cli/src/Wasp/Cli/Command/Start.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Start.hs
rename to waspc/cli/src/Wasp/Cli/Command/Start.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Telemetry.hs b/waspc/cli/src/Wasp/Cli/Command/Telemetry.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Telemetry.hs
rename to waspc/cli/src/Wasp/Cli/Command/Telemetry.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Telemetry/Common.hs b/waspc/cli/src/Wasp/Cli/Command/Telemetry/Common.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Telemetry/Common.hs
rename to waspc/cli/src/Wasp/Cli/Command/Telemetry/Common.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Telemetry/Project.hs b/waspc/cli/src/Wasp/Cli/Command/Telemetry/Project.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Telemetry/Project.hs
rename to waspc/cli/src/Wasp/Cli/Command/Telemetry/Project.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Telemetry/User.hs b/waspc/cli/src/Wasp/Cli/Command/Telemetry/User.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Telemetry/User.hs
rename to waspc/cli/src/Wasp/Cli/Command/Telemetry/User.hs
diff --git a/waspc/cli/Wasp/Cli/Command/Watch.hs b/waspc/cli/src/Wasp/Cli/Command/Watch.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Command/Watch.hs
rename to waspc/cli/src/Wasp/Cli/Command/Watch.hs
diff --git a/waspc/cli/Wasp/Cli/Common.hs b/waspc/cli/src/Wasp/Cli/Common.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Common.hs
rename to waspc/cli/src/Wasp/Cli/Common.hs
diff --git a/waspc/cli/Wasp/Cli/Message.hs b/waspc/cli/src/Wasp/Cli/Message.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Message.hs
rename to waspc/cli/src/Wasp/Cli/Message.hs
diff --git a/waspc/cli/Wasp/Cli/Terminal.hs b/waspc/cli/src/Wasp/Cli/Terminal.hs
similarity index 100%
rename from waspc/cli/Wasp/Cli/Terminal.hs
rename to waspc/cli/src/Wasp/Cli/Terminal.hs
diff --git a/waspc/cli/test/TastyDiscoverDriver.hs b/waspc/cli/test/TastyDiscoverDriver.hs
new file mode 100644
index 000000000..fdf62984b
--- /dev/null
+++ b/waspc/cli/test/TastyDiscoverDriver.hs
@@ -0,0 +1,5 @@
+{-# OPTIONS_GHC -F -pgmF tasty-discover -optF --modules=*Test.hs #-}
+
+-- -optF --modules=*Test.hs tells tasty-discover to pick up only files that match *Test.hs.
+--   I did not do this for any strong reason so we can remove it in the future if we figure out
+--   it is too restrictive.
diff --git a/waspc/cli/test/TerminalTest.hs b/waspc/cli/test/TerminalTest.hs
new file mode 100644
index 000000000..6f430ed89
--- /dev/null
+++ b/waspc/cli/test/TerminalTest.hs
@@ -0,0 +1,12 @@
+module TerminalTest where
+
+import Test.Tasty.Hspec
+import Wasp.Cli.Terminal
+  ( asWaspMessage,
+  )
+
+-- TODO: Showing it can be done. Remove me when writing first real CLI test.
+spec_terminalMessages :: Spec
+spec_terminalMessages = do
+  it "can format messages of various kinds" $ do
+    asWaspMessage "Hello, world!" `shouldBe` "\n --- Hello, world! ---------------------------------------------------------------\n"
diff --git a/waspc/run b/waspc/run
index 81baaf39b..dda167661 100755
--- a/waspc/run
+++ b/waspc/run
@@ -22,6 +22,7 @@ BUILD_CMD="cabal build all"
 BUILD_ALL_CMD="cabal build all --enable-tests --enable-benchmarks"
 TEST_CMD="cabal test"
 TEST_UNIT_CMD="cabal test waspc-test"
+TEST_CLI_CMD="cabal test cli-test"
 TEST_E2E_CMD="cabal test e2e-test"
 RUN_CMD="cabal run wasp-cli ${ARGS[@]}"
 GHCID_CMD="ghcid --command=cabal repl"
@@ -61,6 +62,8 @@ print_usage () {
                     "Executes all tests (unit + e2e). Builds the project first if needed."
     print_usage_cmd "test:unit [pattern]" \
                     "Executes only unit tests. Builds the project first if needed. If pattern is provided, it will run only tests whose description/name matches the pattern. Check https://github.com/UnkindPartition/tasty#patterns to learn more about valid patterns."
+    print_usage_cmd "test:cli" \
+                    "Executes only cli unit tests. Builds the project first if needed."
     print_usage_cmd "test:e2e" \
                     "Executes only e2e tests. Builds the project first if needed."
     print_usage_cmd "wasp-cli <args>" \
@@ -114,6 +117,9 @@ case $COMMAND in
             echo_and_eval "$TEST_UNIT_CMD --test-options \"-p \\\"$TEST_PATTERN\\\"\""
         fi
 
+        ;;
+    test:cli)
+        echo_and_eval "$TEST_CLI_CMD"
         ;;
     test:e2e)
         echo_and_eval "$TEST_E2E_CMD"
diff --git a/waspc/waspc.cabal b/waspc/waspc.cabal
index d0a968d5b..b510c722d 100644
--- a/waspc/waspc.cabal
+++ b/waspc/waspc.cabal
@@ -238,11 +238,9 @@ library
       Wasp.Generator.NpmInstall
       Wasp.Message
 
-
-executable wasp-cli
-  import: common-all, common-exe
-  hs-source-dirs: cli
-  main-is: Main.hs
+library cli-lib
+  import: common-all
+  hs-source-dirs: cli/src
   build-depends:
       directory
     , base
@@ -261,7 +259,8 @@ executable wasp-cli
     , utf8-string
     , uuid
     , waspc
-  other-modules:
+  other-modules: Paths_waspc
+  exposed-modules:
       Wasp.Cli.Command
       Wasp.Cli.Command.BashCompletion
       Wasp.Cli.Command.Build
@@ -284,6 +283,17 @@ executable wasp-cli
       Wasp.Cli.Terminal
       Wasp.Cli.Command.Message
       Wasp.Cli.Message
+
+executable wasp-cli
+  import: common-all, common-exe
+  hs-source-dirs: cli/exe
+  main-is: Main.hs
+  build-depends:
+      base
+    , async
+    , waspc
+    , cli-lib
+  other-modules:
       Paths_waspc
 
 test-suite waspc-test
@@ -374,6 +384,26 @@ test-suite e2e-test
     Tests.WaspMigrateTest
     Tests.WaspNewTest
 
+test-suite cli-test
+  import: common-all, common-exe
+  type: exitcode-stdio-1.0
+  hs-source-dirs: cli/test
+  main-is: TastyDiscoverDriver.hs
+  build-tool-depends:
+    tasty-discover:tasty-discover
+  build-depends:
+    , base
+    , waspc
+    , cli-lib
+    , QuickCheck            ^>= 2.14
+    , tasty                 ^>= 1.4.2
+    -- tasty-hspec 1.1.7 introduces breaking changes, which is why we have < 1.1.7 .
+    , tasty-hspec           >= 1.1 && < 1.1.7
+    , tasty-quickcheck      ^>= 0.10
+  other-modules:
+      TerminalTest
+      Paths_waspc
+
 benchmark waspc-benchmarks
   import: common-all, common-exe
   type: exitcode-stdio-1.0