diff --git a/tool/internal/setup/setup.go b/tool/internal/setup/setup.go
index 79aa88db..ae20bef9 100644
--- a/tool/internal/setup/setup.go
+++ b/tool/internal/setup/setup.go
@@ -43,10 +43,12 @@ func (sp *SetupPhase) keepForDebug(srcPath string) {
 	}
 }
 
-// This function can be used to check if the setup has been completed.
+// isSetup reports whether setup has already been completed for the current
+// build by checking for the presence of the matched-rules file written by
+// store() at the end of a successful Setup run.
 func isSetup() bool {
-	// TODO: Implement Task
-	return false
+	_, err := os.Stat(util.GetMatchedRuleFile())
+	return err == nil
 }
 
 // flagsWithPathValues contains flags that accept a value from "go build" command.
diff --git a/tool/internal/setup/setup_test.go b/tool/internal/setup/setup_test.go
index ab7aac34..74ef9d08 100644
--- a/tool/internal/setup/setup_test.go
+++ b/tool/internal/setup/setup_test.go
@@ -226,6 +226,33 @@ func TestSetupGoCache(t *testing.T) {
 	})
 }
 
+func TestIsSetup(t *testing.T) {
+	t.Run("returns false when matched.json does not exist", func(t *testing.T) {
+		tempDir := t.TempDir()
+		t.Setenv(util.EnvOtelcWorkDir, tempDir)
+		if err := os.MkdirAll(util.GetBuildTempDir(), 0o755); err != nil {
+			t.Fatal(err)
+		}
+		if isSetup() {
+			t.Error("isSetup() = true, expected false when matched.json is absent")
+		}
+	})
+
+	t.Run("returns true when matched.json exists", func(t *testing.T) {
+		tempDir := t.TempDir()
+		t.Setenv(util.EnvOtelcWorkDir, tempDir)
+		if err := os.MkdirAll(util.GetBuildTempDir(), 0o755); err != nil {
+			t.Fatal(err)
+		}
+		if err := os.WriteFile(util.GetMatchedRuleFile(), []byte("[]"), 0o644); err != nil {
+			t.Fatal(err)
+		}
+		if !isSetup() {
+			t.Error("isSetup() = false, expected true when matched.json exists")
+		}
+	})
+}
+
 func TestExtractBuildFlags(t *testing.T) {
 	tests := []struct {
 		name     string