diff --git a/.changes/unreleased/Under the Hood-20241010-164927.yaml b/.changes/unreleased/Under the Hood-20241010-164927.yaml
new file mode 100644
index 00000000..17b2a295
--- /dev/null
+++ b/.changes/unreleased/Under the Hood-20241010-164927.yaml	
@@ -0,0 +1,6 @@
+kind: Under the Hood
+body: Downgrade Pydantic in dev-env
+time: 2024-10-10T16:49:27.844308-05:00
+custom:
+    Author: DevonFulcher
+    Issue: None
diff --git a/dsi_pydantic_shim.py b/dsi_pydantic_shim.py
index 3ea00720..9c333cbf 100644
--- a/dsi_pydantic_shim.py
+++ b/dsi_pydantic_shim.py
@@ -1,3 +1,13 @@
+"""Shim to allow support for both Pydantic 1 and Pydantic 2.
+
+DSI must support both major versions of Pydantic because dbt-core depends on DSI. dbt-core users might be using an
+environment with either version, and we can't restrict them to one or the other. Here, we essentially import all
+Pydantic objects from version 1. Throughout the repo, we import those objects from this file instead of from Pydantic
+directly, meaning that we essentially only use Pydantic 1 in this repo, but without forcing that restriction on dbt
+users. The development environment for this repo should be pinned to Pydantic 1 to ensure devs get appropriate type
+hints.
+"""
+
 from importlib.metadata import version
 
 pydantic_version = version("pydantic")
diff --git a/pyproject.toml b/pyproject.toml
index 2fc2a9af..7710213b 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -6,9 +6,7 @@ readme = "README.md"
 requires-python = ">=3.8"
 license = "Apache-2.0"
 keywords = []
-authors = [
-  { name = "dbt Labs", email = "info@dbtlabs.com" },
-]
+authors = [{ name = "dbt Labs", email = "info@dbtlabs.com" }]
 classifiers = [
   "Development Status :: 4 - Beta",
   "License :: OSI Approved :: Apache Software License",
@@ -66,7 +64,8 @@ dependencies = [
   "isort>=5.12,<6",
   "black>=23.3,<24",
   "ruff==0.0.260",
-  "mypy>=1.3,<2",
+  "mypy==1.6.1",
+  "pydantic>=1.10,<2",             # The types in this codebase with mypy checker are only compatible with pydantic 1
   "pytest>=7.3,<8",
   "types-Jinja2>=2.11,<3",
   "types-jsonschema>=4.17,<5",
@@ -86,7 +85,7 @@ ignore = [
   # Missing docstring in public module -- often docs handled within classes
   "D100",
   # Missing docstring in public package -- often docs handled within files not __init__.py
-  "D104"
+  "D104",
 ]
 # Let ruff autofix these errors.
 # F401 - Unused imports.