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I'm not sure why py.test does not add the current directory in the PYTHONPATH itself, but here's a workaround (to be executed from the root of your repository):

python -m pytest tests/

It works because Python adds the current directory in the PYTHONPATH for you.

I had the same problem. I fixed it by adding an empty __init__.py file to my tests directory.

conftest solution

The least invasive solution is adding an empty file named conftest.py in the repo/ directory:

$ touch repo/conftest.py

That's it. No need to write custom code for mangling the sys.path or remember to drag PYTHONPATH along, or placing __init__.py into dirs where it doesn't belong.

The project directory afterwards:

repo

├── conftest.py

├── app.py

├── settings.py

├── models.py

└── tests

     └── test_app.py

Explanation

pytest looks for the conftest modules on test collection to gather custom hooks and fixtures, and in order to import the custom objects from them, pytest adds the parent directory of the conftest.py to the sys.path.

Other project structures

If you have other project structure, place the conftest.py in the package root dir (the one that contains packages but is not a package itself, so does not contain an __init__.py), for example:

repo

├── conftest.py

├── spam

│   ├── __init__.py

│   ├── bacon.py

│   └── egg.py

├── eggs

│   ├── __init__.py

│   └── sausage.py

└── tests

     ├── test_bacon.py

     └── test_egg.py

Same approach with the src layout: place conftest.py in the src dir:

repo

├── src

│   ├── conftest.py

│   ├── spam

│   │   ├── __init__.py

│   │   ├── bacon.py

│   │   └── egg.py

│   └── eggs 

│       ├── __init__.py

│       └── sausage.py

└── tests

     ├── test_bacon.py

     └── test_egg.py

Where to go from here

Of course, conftest modules are not just some files to help the source code discovery; it's where all the project-specific enhancements of the pytest framework and the customization of your test suite happen. pytest has a lot of information on conftest modules scattered throughout their docs; start with conftest.py: local per-directory plugins

Also, SO has an excellent question on conftest modules: In py.test, what is the use of conftest.py files?

You can run with PYTHONPATH in project root

PYTHONPATH=. py.test

Or use pip install as editable import

pip install -e .   # install package using setup.py in editable mode

Run pytest itself as a module with:
python -m pytest tests

I created this as an answer to your question and my own confusion. I hope it helps. Pay attention to PYTHONPATH in both the py.test command line and in the tox.ini.

https://github.com/jeffmacdonald/pytest_test

Specifically: You have to tell py.test and tox where to find the modules you are including.

With py.test you can do this:

PYTHONPATH=. py.test

And with tox, add this to your tox.ini:

[testenv]

deps= -r{toxinidir}/requirements.txt

commands=py.test

setenv =

    PYTHONPATH = {toxinidir}

I started getting weird ConftestImportFailure: ImportError('No module named ... errors when I had accidentally added __init__.py file to my src directory (which was not supposed to be a Python package, just a container of all source).

I was getting this error due to something even simpler (you could even say trivial). I hadn't installed the pytest module. So a simple apt install python-pytest fixed it for me.

'pytest' would have been listed in setup.py as a test dependency. Make sure you install the test requirements as well.

For me the problem was tests.py generated by Django along with tests directory. Removing tests.py solved the problem.

I got this error as I used relative imports incorrectly. In the OP example, test_app.py should import functions using e.g.

from repo.app import *

However liberally __init__.py files are scattered around the file structure, this does not work and creates the kind of ImportError seen unless the files and test files are in the same directory.

from app import *

Here's an example of what I had to do with one of my projects:

Here’s my project structure:

microbit/

microbit/activity_indicator/activity_indicator.py

microbit/tests/test_activity_indicator.py

To be able to access activity_indicator.py from test_activity_indicator.py I needed to:

• start test_activity_indicatory.py with the correct relative import:

    from microbit.activity_indicator.activity_indicator import *

• put __init__.py files throughout the project structure:

    microbit/

    microbit/__init__.py

    microbit/activity_indicator/__init__.py

    microbit/activity_indicator/activity_indicator.py

    microbit/tests/__init__.py

    microbit/tests/test_activity_indicator.py