diff --git a/.gitignore b/.gitignore
index 89bd1003f71..f5ca501db26 100644
--- a/.gitignore
+++ b/.gitignore
@@ -33,3 +33,6 @@ coverage
 
 # Makefile's cache
 cache.mk
+
+# Temporary test reports
+report.xml
diff --git a/src/python/grpcio/MANIFEST.in b/src/python/grpcio/MANIFEST.in
index 498b55f20ab..9583dc7768d 100644
--- a/src/python/grpcio/MANIFEST.in
+++ b/src/python/grpcio/MANIFEST.in
@@ -1,2 +1,3 @@
 graft grpc
 include commands.py
+include requirements.txt
diff --git a/src/python/requirements.txt b/src/python/grpcio/requirements.txt
similarity index 100%
rename from src/python/requirements.txt
rename to src/python/grpcio/requirements.txt
diff --git a/src/python/grpcio_test/MANIFEST.in b/src/python/grpcio_test/MANIFEST.in
index 66bb3c6f170..c9327307dc5 100644
--- a/src/python/grpcio_test/MANIFEST.in
+++ b/src/python/grpcio_test/MANIFEST.in
@@ -1,3 +1,4 @@
 graft grpc_interop
 graft grpc_test
 include commands.py
+include requirements.txt
diff --git a/src/python/grpcio_test/commands.py b/src/python/grpcio_test/commands.py
index 24d6241c433..c796d94c76a 100644
--- a/src/python/grpcio_test/commands.py
+++ b/src/python/grpcio_test/commands.py
@@ -52,4 +52,6 @@ class RunTests(setuptools.Command):
     # We import here to ensure that setup.py has had a chance to install the
     # relevant package eggs first.
     import pytest
-    pytest.main(self.pytest_args)
+    result = pytest.main(self.pytest_args)
+    if result != 0:
+      raise SystemExit(result)
diff --git a/src/python/grpcio_test/requirements.txt b/src/python/grpcio_test/requirements.txt
new file mode 100644
index 00000000000..856198def57
--- /dev/null
+++ b/src/python/grpcio_test/requirements.txt
@@ -0,0 +1,5 @@
+pytest>=2.6
+pytest-cov>=2.0
+pytest-xdist>=1.11
+oauth2client>=1.4.7
+grpcio>=0.10.0a0
diff --git a/src/python/grpcio_test/setup.py b/src/python/grpcio_test/setup.py
index 798710393d7..925c32720fe 100644
--- a/src/python/grpcio_test/setup.py
+++ b/src/python/grpcio_test/setup.py
@@ -52,21 +52,28 @@ _PACKAGE_DATA = {
         'credentials/server1.pem',]
 }
 
-_INSTALL_REQUIRES = ['oauth2client>=1.4.7', 'grpcio>=0.10.0a0']
+_SETUP_REQUIRES = (
+    'pytest>=2.6',
+    'pytest-cov>=2.0',
+    'pytest-xdist>=1.11',
+)
+
+_INSTALL_REQUIRES = (
+    'oauth2client>=1.4.7',
+    'grpcio>=0.10.0a0',
+)
+
+_COMMAND_CLASS = {
+    'test': commands.RunTests
+}
 
 setuptools.setup(
     name='grpcio_test',
-    version='0.0.1',
+    version='0.10.0a0',
     packages=_PACKAGES,
     package_dir=_PACKAGE_DIRECTORIES,
     package_data=_PACKAGE_DATA,
-    install_requires=_INSTALL_REQUIRES,
-    setup_requires=(
-        'pytest>=2.6',
-        'pytest-cov>=2.0',
-        'pytest-xdist>=1.11',
-    ),
-    cmdclass={
-        'test': commands.RunTests
-    }
+    install_requires=_INSTALL_REQUIRES + _SETUP_REQUIRES,
+    setup_requires=_SETUP_REQUIRES,
+    cmdclass=_COMMAND_CLASS
 )
diff --git a/tools/run_tests/build_python.sh b/tools/run_tests/build_python.sh
index 265a542e3a6..203c8b77209 100755
--- a/tools/run_tests/build_python.sh
+++ b/tools/run_tests/build_python.sh
@@ -33,7 +33,9 @@ set -ex
 # change to grpc repo root
 cd $(dirname $0)/../..
 
-root=`pwd`
+ROOT=`pwd`
+GRPCIO=$ROOT/src/python/grpcio
+GRPCIO_TEST=$ROOT/src/python/grpcio_test
 
 make_virtualenv() {
   virtualenv_name="python"$1"_virtual_environment"
@@ -42,9 +44,16 @@ make_virtualenv() {
     # Build the entire virtual environment
     virtualenv -p `which "python"$1` $virtualenv_name
     source $virtualenv_name/bin/activate
-    pip install -r src/python/requirements.txt
-    CFLAGS="-I$root/include -std=c89" LDFLAGS=-L$root/libs/$CONFIG GRPC_PYTHON_BUILD_WITH_CYTHON=1 pip install src/python/grpcio
-    pip install src/python/grpcio_test
+
+    # Install grpcio
+    cd $GRPCIO
+    pip install -r requirements.txt
+    CFLAGS="-I$ROOT/include -std=c89" LDFLAGS=-L$ROOT/libs/$CONFIG GRPC_PYTHON_BUILD_WITH_CYTHON=1 pip install $GRPCIO
+
+    # Install grpcio_test
+    cd $GRPCIO_TEST
+    pip install -r requirements.txt
+    pip install $GRPCIO_TEST
   else
     source $virtualenv_name/bin/activate
     # Uninstall and re-install the packages we care about. Don't use
@@ -53,12 +62,12 @@ make_virtualenv() {
     # dependency upgrades.
     (yes | pip uninstall grpcio) || true
     (yes | pip uninstall grpcio_test) || true
-    (CFLAGS="-I$root/include -std=c89" LDFLAGS=-L$root/libs/$CONFIG GRPC_PYTHON_BUILD_WITH_CYTHON=1 pip install src/python/grpcio) || (
+    (CFLAGS="-I$ROOT/include -std=c89" LDFLAGS=-L$ROOT/libs/$CONFIG GRPC_PYTHON_BUILD_WITH_CYTHON=1 pip install $GRPCIO) || (
       # Fall back to rebuilding the entire environment
       rm -rf $virtualenv_name
       make_virtualenv $1
     )
-    pip install src/python/grpcio_test
+    pip install $GRPCIO_TEST
   fi
 }
 
diff --git a/tools/run_tests/python_tests.json b/tools/run_tests/python_tests.json
deleted file mode 100755
index 426b93fe3a6..00000000000
--- a/tools/run_tests/python_tests.json
+++ /dev/null
@@ -1,122 +0,0 @@
-[
-  {
-    "module": "grpc_test._adapter._c_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test._adapter._low_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test._adapter._intermediary_low_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test._adapter._links_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test._adapter._lonely_rear_link_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test._adapter._blocking_invocation_inline_service_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test._adapter._event_invocation_synchronous_event_service_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test._adapter._future_invocation_asynchronous_event_service_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test._links._lonely_invocation_link_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test._links._transmission_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test.early_adopter.implementations_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test.framework.base.implementations_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test.framework.face.blocking_invocation_inline_service_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test.framework.face.event_invocation_synchronous_event_service_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test.framework.face.future_invocation_asynchronous_event_service_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test.framework.foundation._later_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_test.framework.foundation._logging_pool_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_interop._insecure_interop_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "module": "grpc_interop._secure_interop_test",
-    "pythonVersions": [
-      "2.7"
-    ]
-  },
-  {
-    "file": "test/compiler/python_plugin_test.py",
-    "pythonVersions": [
-      "2.7"
-    ]
-  }
-]
diff --git a/tools/run_tests/run_python.sh b/tools/run_tests/run_python.sh
index 4959c0241c6..5ffd4460b94 100755
--- a/tools/run_tests/run_python.sh
+++ b/tools/run_tests/run_python.sh
@@ -33,8 +33,9 @@ set -ex
 # change to grpc repo root
 cd $(dirname $0)/../..
 
-root=`pwd`
-export LD_LIBRARY_PATH=$root/libs/$CONFIG
-export DYLD_LIBRARY_PATH=$root/libs/$CONFIG
+ROOT=`pwd`
+GRPCIO_TEST=$ROOT/src/python/grpcio_test
+export LD_LIBRARY_PATH=$ROOT/libs/$CONFIG
+export DYLD_LIBRARY_PATH=$ROOT/libs/$CONFIG
 source "python"$PYVER"_virtual_environment"/bin/activate
-"python"$PYVER -B $*
+"python"$PYVER $GRPCIO_TEST/setup.py test -a "-n8 --cov=grpc --junitxml=./report.xml"
diff --git a/tools/run_tests/run_tests.py b/tools/run_tests/run_tests.py
index 50d88e66de0..fa749498d2f 100755
--- a/tools/run_tests/run_tests.py
+++ b/tools/run_tests/run_tests.py
@@ -187,40 +187,18 @@ class PhpLanguage(object):
 class PythonLanguage(object):
 
   def __init__(self):
-    with open('tools/run_tests/python_tests.json') as f:
-      self._tests = json.load(f)
-    self._build_python_versions = set([
-        python_version
-        for test in self._tests
-        for python_version in test['pythonVersions']])
+    self._build_python_versions = ['2.7']
     self._has_python_versions = []
 
   def test_specs(self, config, travis):
-    job_specifications = []
-    for test in self._tests:
-      command = None
-      short_name = None
-      if 'module' in test:
-        command = ['tools/run_tests/run_python.sh', '-m', test['module']]
-        short_name = test['module']
-      elif 'file' in test:
-        command = ['tools/run_tests/run_python.sh', test['file']]
-        short_name = test['file']
-      else:
-        raise ValueError('expected input to be a module or file to run '
-                         'unittests from')
-      for python_version in test['pythonVersions']:
-        if python_version in self._has_python_versions:
-          environment = dict(_FORCE_ENVIRON_FOR_WRAPPERS)
-          environment['PYVER'] = python_version
-          job_specifications.append(config.job_spec(
-              command, None, environ=environment, shortname=short_name))
-        else:
-          jobset.message(
-              'WARNING',
-              'Could not find Python {}; skipping test'.format(python_version),
-              '{}\n'.format(command), do_newline=True)
-    return job_specifications
+    environment = dict(_FORCE_ENVIRON_FOR_WRAPPERS)
+    environment['PYVER'] = '2.7'
+    return [config.job_spec(
+        ['tools/run_tests/run_python.sh'],
+        None,
+        environ=environment,
+        shortname='py.test',
+    )]
 
   def make_targets(self):
     return ['static_c', 'grpc_python_plugin', 'shared_c']