diff --git a/src/fondant/core/exceptions.py b/src/fondant/core/exceptions.py
index 8ce549ed..4143f389 100644
--- a/src/fondant/core/exceptions.py
+++ b/src/fondant/core/exceptions.py
@@ -21,3 +21,7 @@ class InvalidPipelineDefinition(ValidationError, FondantException):
 
 class InvalidTypeSchema(ValidationError, FondantException):
     """Thrown when a Type schema definition is invalid."""
+
+
+class UnsupportedTypeAnnotation(FondantException):
+    """Thrown when an unsupported type annotation is encountered during type inference."""
diff --git a/src/fondant/pipeline/argument_inference.py b/src/fondant/pipeline/argument_inference.py
new file mode 100644
index 00000000..ee2c24bb
--- /dev/null
+++ b/src/fondant/pipeline/argument_inference.py
@@ -0,0 +1,103 @@
+import inspect
+import typing as t
+
+from fondant.component import Component
+from fondant.core.component_spec import Argument
+from fondant.core.exceptions import UnsupportedTypeAnnotation
+
+BUILTIN_TYPES = [str, int, float, bool, dict, list]
+
+
+def annotation_to_type(annotation: t.Any) -> t.Type:
+    """Extract the simple built-in type from an Annotation.
+
+    Examples:
+        dict[str, int] -> dict
+        t.Optional[str] -> str
+
+    Args:
+        annotation: Annotation of an argument as returned by inspect.signature
+
+    Raises:
+        UnsupportedTypeAnnotation: If the annotation is not simple or not based on a built-in type
+
+    """
+    # If no type annotation is present, default to str
+    if annotation == inspect.Parameter.empty:
+        return str
+
+    # Unpack the annotation until we get a simple type.
+    # This removes complex structures such as Optional
+    while t.get_origin(annotation) not in [*BUILTIN_TYPES, None]:
+        # Filter out NoneType values (Optional[x] is represented as Union[x, NoneType]
+        annotation_args = [
+            arg for arg in t.get_args(annotation) if arg is not type(None)
+        ]
+
+        # Multiple arguments remaining (eg. Union[str, int])
+        # Raise error since we cannot infer type unambiguously
+        if len(annotation_args) > 1:
+            msg = (
+                f"Fondant only supports simple types for component arguments."
+                f"Expected one of {BUILTIN_TYPES}, received {annotation} instead."
+            )
+            raise UnsupportedTypeAnnotation(msg)
+
+        annotation = annotation_args[0]
+
+    # Remove any subscription (eg. dict[str, int] -> dict)
+    annotation = t.get_origin(annotation) or annotation
+
+    # Check for classes not supported as argument
+    if annotation not in BUILTIN_TYPES:
+        msg = (
+            f"Fondant only supports builtin types for component arguments."
+            f"Expected one of {BUILTIN_TYPES}, received {annotation} instead."
+        )
+        raise UnsupportedTypeAnnotation(msg)
+
+    return annotation
+
+
+def is_optional(parameter: inspect.Parameter) -> bool:
+    """Check if an inspect.Parameter is optional. We check this based on the presence of a
+    default value instead of based on the type, since this is more trustworthy.
+    """
+    return parameter.default != inspect.Parameter.empty
+
+
+def get_default(parameter: inspect.Parameter) -> t.Any:
+    """Get the default value from an inspect.Parameter."""
+    if parameter.default == inspect.Parameter.empty:
+        return None
+    return parameter.default
+
+
+def parameter_to_argument(parameter: inspect.Parameter) -> Argument:
+    """Translate an inspect.Parameter into a Fondant Argument."""
+    return Argument(
+        name=parameter.name,
+        type=annotation_to_type(parameter.annotation),
+        optional=is_optional(parameter),
+        default=get_default(parameter),
+    )
+
+
+def infer_arguments(component: t.Type[Component]) -> t.Dict[str, Argument]:
+    """Infer the user arguments from a Python Component class.
+    Default arguments are skipped.
+
+    Args:
+        component: Component class to inspect.
+    """
+    signature = inspect.signature(component)
+
+    arguments = {}
+    for name, parameter in signature.parameters.items():
+        # Skip non-user arguments
+        if name in ["self", "consumes", "produces", "kwargs"]:
+            continue
+
+        arguments[name] = parameter_to_argument(parameter)
+
+    return arguments
diff --git a/tests/pipeline/test_argument_inference.py b/tests/pipeline/test_argument_inference.py
new file mode 100644
index 00000000..2f306bf8
--- /dev/null
+++ b/tests/pipeline/test_argument_inference.py
@@ -0,0 +1,247 @@
+import sys
+import typing as t
+
+import pytest
+from fondant.component import PandasTransformComponent
+from fondant.core.component_spec import Argument
+from fondant.core.exceptions import UnsupportedTypeAnnotation
+from fondant.pipeline.argument_inference import infer_arguments
+
+
+def test_no_init():
+    class TestComponent(PandasTransformComponent):
+        pass
+
+    assert infer_arguments(TestComponent) == {}
+
+
+def test_no_arguments():
+    class TestComponent(PandasTransformComponent):
+        def __init__(self, **kwargs):
+            pass
+
+    assert infer_arguments(TestComponent) == {}
+
+
+def test_missing_types():
+    class TestComponent(PandasTransformComponent):
+        def __init__(self, *, argument, **kwargs):
+            pass
+
+    assert infer_arguments(TestComponent) == {
+        "argument": Argument(
+            name="argument",
+            type=str,
+            optional=False,
+        ),
+    }
+
+
+def test_types():
+    class TestComponent(PandasTransformComponent):
+        def __init__(
+            self,
+            *,
+            str_argument: str,
+            int_argument: int,
+            float_argument: float,
+            bool_argument: bool,
+            dict_argument: dict,
+            list_argument: list,
+            **kwargs,
+        ):
+            pass
+
+    assert infer_arguments(TestComponent) == {
+        "str_argument": Argument(
+            name="str_argument",
+            type=str,
+            optional=False,
+        ),
+        "int_argument": Argument(
+            name="int_argument",
+            type=int,
+            optional=False,
+        ),
+        "float_argument": Argument(
+            name="float_argument",
+            type=float,
+            optional=False,
+        ),
+        "bool_argument": Argument(
+            name="bool_argument",
+            type=bool,
+            optional=False,
+        ),
+        "dict_argument": Argument(
+            name="dict_argument",
+            type=dict,
+            optional=False,
+        ),
+        "list_argument": Argument(
+            name="list_argument",
+            type=list,
+            optional=False,
+        ),
+    }
+
+
+def test_optional_types():
+    class TestComponent(PandasTransformComponent):
+        def __init__(
+            self,
+            *,
+            str_argument: t.Optional[str] = "",
+            int_argument: t.Optional[int] = 1,
+            float_argument: t.Optional[float] = 1.0,
+            bool_argument: t.Optional[bool] = False,
+            dict_argument: t.Optional[dict] = None,
+            list_argument: t.Optional[list] = None,
+            **kwargs,
+        ):
+            pass
+
+    assert infer_arguments(TestComponent) == {
+        "str_argument": Argument(
+            name="str_argument",
+            type=str,
+            optional=True,
+            default="",
+        ),
+        "int_argument": Argument(
+            name="int_argument",
+            type=int,
+            optional=True,
+            default=1,
+        ),
+        "float_argument": Argument(
+            name="float_argument",
+            type=float,
+            optional=True,
+            default=1.0,
+        ),
+        "bool_argument": Argument(
+            name="bool_argument",
+            type=bool,
+            optional=True,
+            default=False,
+        ),
+        "dict_argument": Argument(
+            name="dict_argument",
+            type=dict,
+            optional=True,
+            default=None,
+        ),
+        "list_argument": Argument(
+            name="list_argument",
+            type=list,
+            optional=True,
+            default=None,
+        ),
+    }
+
+
+def test_parametrized_types_old():
+    class TestComponent(PandasTransformComponent):
+        def __init__(
+            self,
+            *,
+            dict_argument: t.Dict[str, t.Any],
+            list_argument: t.Optional[t.List[int]] = None,
+            **kwargs,
+        ):
+            pass
+
+    assert infer_arguments(TestComponent) == {
+        "dict_argument": Argument(
+            name="dict_argument",
+            type=dict,
+            optional=False,
+            default=None,
+        ),
+        "list_argument": Argument(
+            name="list_argument",
+            type=list,
+            optional=True,
+            default=None,
+        ),
+    }
+
+
+@pytest.mark.skipif(sys.version_info < (3, 10), reason="requires python3.10 or higher")
+def test_parametrized_types_new():
+    class TestComponent(PandasTransformComponent):
+        def __init__(
+            self,
+            *,
+            dict_argument: dict[str, t.Any],
+            list_argument: list[int] | None = None,
+            **kwargs,
+        ):
+            pass
+
+    assert infer_arguments(TestComponent) == {
+        "dict_argument": Argument(
+            name="dict_argument",
+            type=dict,
+            optional=False,
+            default=None,
+        ),
+        "list_argument": Argument(
+            name="list_argument",
+            type=list,
+            optional=True,
+            default=None,
+        ),
+    }
+
+
+def test_unsupported_complex_type():
+    class TestComponent(PandasTransformComponent):
+        def __init__(
+            self,
+            *,
+            union_argument: t.Union[str, int],
+            **kwargs,
+        ):
+            pass
+
+    with pytest.raises(
+        UnsupportedTypeAnnotation,
+        match="Fondant only supports simple types",
+    ):
+        infer_arguments(TestComponent)
+
+
+def test_unsupported_custom_type():
+    class CustomClass:
+        pass
+
+    class TestComponent(PandasTransformComponent):
+        def __init__(
+            self,
+            *,
+            class_argument: CustomClass,
+            **kwargs,
+        ):
+            pass
+
+    with pytest.raises(
+        UnsupportedTypeAnnotation,
+        match="Fondant only supports builtin types",
+    ):
+        infer_arguments(TestComponent)
+
+
+def test_consumes_produces():
+    class TestComponent(PandasTransformComponent):
+        def __init__(self, *, argument, consumes, **kwargs):
+            pass
+
+    assert infer_arguments(TestComponent) == {
+        "argument": Argument(
+            name="argument",
+            type=str,
+            optional=False,
+        ),
+    }