diff --git a/.gitignore b/.gitignore
index dc42fe296a..0c3eb0c370 100644
--- a/.gitignore
+++ b/.gitignore
@@ -6,6 +6,8 @@ build
 .coverage
 .tox
 cover
+.testrepository
+subunit.log
 AUTHORS
 ChangeLog
 *.deb
diff --git a/.testr.conf b/.testr.conf
new file mode 100644
index 0000000000..081907d599
--- /dev/null
+++ b/.testr.conf
@@ -0,0 +1,4 @@
+[DEFAULT]
+test_command=${PYTHON:-python} -m subunit.run discover -t ./ ./tests $LISTOPT $IDOPTION
+test_id_option=--load-list $IDFILE
+test_list_option=--list
diff --git a/ceilometer/api/v1/app.py b/ceilometer/api/v1/app.py
index cb4db0014f..05bc505e5e 100644
--- a/ceilometer/api/v1/app.py
+++ b/ceilometer/api/v1/app.py
@@ -29,12 +29,13 @@ from ceilometer import storage
 storage.register_opts(cfg.CONF)
 
 
-def make_app(conf, enable_acl=True, attach_storage=True):
+def make_app(conf, enable_acl=True, attach_storage=True,
+             sources_file='sources.json'):
     app = flask.Flask('ceilometer.api')
     app.register_blueprint(v1_blueprint.blueprint, url_prefix='/v1')
 
     try:
-        with open("sources.json", "r") as f:
+        with open(sources_file, "r") as f:
             sources = jsonutils.load(f)
     except IOError:
         sources = {}
diff --git a/ceilometer/tests/api.py b/ceilometer/tests/api.py
index 0d831c4844..0f667ec6e7 100644
--- a/ceilometer/tests/api.py
+++ b/ceilometer/tests/api.py
@@ -41,9 +41,13 @@ class TestBase(db_test_base.TestBase):
     def setUp(self):
         super(TestBase, self).setUp()
         cfg.CONF.set_override("auth_version", "v2.0", group=acl.OPT_GROUP_NAME)
+        cfg.CONF.set_override("policy_file",
+                              self.path_get('tests/policy.json'))
+        sources_file = self.path_get('tests/sources.json')
         self.app = v1_app.make_app(cfg.CONF,
                                    enable_acl=False,
-                                   attach_storage=False)
+                                   attach_storage=False,
+                                   sources_file=sources_file)
         self.app.register_blueprint(v1_blueprint.blueprint)
         self.test_app = self.app.test_client()
 
@@ -86,11 +90,7 @@ class FunctionalTest(db_test_base.TestBase):
 
     def _make_app(self, enable_acl=False):
         # Determine where we are so we can set up paths in the config
-        root_dir = os.path.abspath(os.path.join(os.path.dirname(__file__),
-                                                '..',
-                                                '..',
-                                                )
-                                   )
+        root_dir = self.path_get()
 
         self.config = {
 
diff --git a/ceilometer/tests/base.py b/ceilometer/tests/base.py
index befe9b437d..3b15178be8 100644
--- a/ceilometer/tests/base.py
+++ b/ceilometer/tests/base.py
@@ -42,9 +42,20 @@ class TestCase(testtools.TestCase):
         # the system.
         cfg.CONF.set_override(
             'pipeline_cfg_file',
-            '../etc/ceilometer/pipeline.yaml',
+            self.path_get('etc/ceilometer/pipeline.yaml'),
         )
 
+    def path_get(self, project_file=None):
+        root = os.path.abspath(os.path.join(os.path.dirname(__file__),
+                                            '..',
+                                            '..',
+                                            )
+                               )
+        if project_file:
+            return os.path.join(root, project_file)
+        else:
+            return root
+
     def temp_config_file_path(self, name='ceilometer.conf'):
         return os.path.join(self.tempdir.path, name)
 
diff --git a/nova_tests/.testr.conf b/nova_tests/.testr.conf
new file mode 100644
index 0000000000..d328439521
--- /dev/null
+++ b/nova_tests/.testr.conf
@@ -0,0 +1,4 @@
+[DEFAULT]
+test_command=${PYTHON:-python} -m subunit.run discover -t ./nova_tests ./nova_tests $LISTOPT $IDOPTION
+test_id_option=--load-list $IDFILE
+test_list_option=--list
diff --git a/setup.cfg b/setup.cfg
index 6eb458ba1d..603f62d0c8 100644
--- a/setup.cfg
+++ b/setup.cfg
@@ -85,15 +85,6 @@ ceilometer.publisher =
     meter_publisher = ceilometer.publisher.meter:MeterPublisher
     meter = ceilometer.publisher.meter:MeterPublisher
 
-[nosetests]
-cover-package = ceilometer
-cover-html = true
-cover-erase = true
-cover-inclusive = true
-verbosity=2
-detailed-errors=1
-where=tests
-
 [build_sphinx]
 all_files = 1
 build-dir = doc/build
diff --git a/tests/api/v2/test_app.py b/tests/api/v2/test_app.py
index ede22be933..f98dd6ef01 100644
--- a/tests/api/v2/test_app.py
+++ b/tests/api/v2/test_app.py
@@ -40,7 +40,7 @@ class TestApp(base.TestCase):
                               group=acl.OPT_GROUP_NAME)
         cfg.CONF.set_override("auth_version", "v2.0", group=acl.OPT_GROUP_NAME)
         cfg.CONF.set_override("pipeline_cfg_file",
-                              "../etc/ceilometer/pipeline.yaml")
+                              self.path_get("etc/ceilometer/pipeline.yaml"))
         api_app = app.setup_app()
         self.assertEqual(api_app.auth_protocol, 'foottp')
 
@@ -48,7 +48,8 @@ class TestApp(base.TestCase):
         tmpfile = self.temp_config_file_path()
         with open(tmpfile, "w") as f:
             f.write("[DEFAULT]\n")
-            f.write("pipeline_cfg_file = ../etc/ceilometer/pipeline.yaml\n")
+            f.write("pipeline_cfg_file = %s\n" %
+                    self.path_get("etc/ceilometer/pipeline.yaml"))
             f.write("[%s]\n" % acl.OPT_GROUP_NAME)
             f.write("auth_protocol = barttp\n")
             f.write("auth_version = v2.0\n")
diff --git a/tests/test_bin.py b/tests/test_bin.py
index 396b397361..0352a2e7df 100644
--- a/tests/test_bin.py
+++ b/tests/test_bin.py
@@ -36,7 +36,7 @@ class BinDbsyncTestCase(base.TestCase):
             tmp.write("database_connection=log://localhost\n")
 
     def test_dbsync_run(self):
-        subp = subprocess.Popen(["../bin/ceilometer-dbsync",
+        subp = subprocess.Popen([self.path_get('bin/ceilometer-dbsync'),
                                  "--config-file=%s" % self.tempfile])
         self.assertEqual(subp.wait(), 0)
 
@@ -45,15 +45,16 @@ class BinSendCounterTestCase(base.TestCase):
     def setUp(self):
         super(BinSendCounterTestCase, self).setUp()
         self.tempfile = self.temp_config_file_path()
+        pipeline_cfg_file = self.path_get('etc/ceilometer/pipeline.yaml')
         with open(self.tempfile, 'w') as tmp:
             tmp.write("[DEFAULT]\n")
             tmp.write(
                 "rpc_backend=ceilometer.openstack.common.rpc.impl_fake\n")
             tmp.write(
-                "pipeline_cfg_file=../etc/ceilometer/pipeline.yaml\n")
+                "pipeline_cfg_file=%s\n" % pipeline_cfg_file)
 
     def test_send_counter_run(self):
-        subp = subprocess.Popen(["../bin/ceilometer-send-counter",
+        subp = subprocess.Popen([self.path_get('bin/ceilometer-send-counter'),
                                  "--config-file=%s" % self.tempfile,
                                  "--counter-resource=someuuid",
                                  "--counter-name=mycounter"])
@@ -67,6 +68,8 @@ class BinApiTestCase(base.TestCase):
         self.api_port = random.randint(10000, 11000)
         self.http = httplib2.Http()
         self.tempfile = self.temp_config_file_path()
+        pipeline_cfg_file = self.path_get('etc/ceilometer/pipeline.yaml')
+        policy_file = self.path_get('tests/policy.json')
         with open(self.tempfile, 'w') as tmp:
             tmp.write("[DEFAULT]\n")
             tmp.write(
@@ -79,8 +82,10 @@ class BinApiTestCase(base.TestCase):
             tmp.write(
                 "debug=true\n")
             tmp.write(
-                "pipeline_cfg_file=../etc/ceilometer/pipeline.yaml\n")
-        self.subp = subprocess.Popen(["../bin/ceilometer-api",
+                "pipeline_cfg_file=%s\n" % pipeline_cfg_file)
+            tmp.write(
+                "policy_file=%s\n" % policy_file)
+        self.subp = subprocess.Popen([self.path_get('bin/ceilometer-api'),
                                       "--config-file=%s" % self.tempfile])
 
     def tearDown(self):
diff --git a/tools/init_testr_if_needed.sh b/tools/init_testr_if_needed.sh
new file mode 100755
index 0000000000..9d1e22f996
--- /dev/null
+++ b/tools/init_testr_if_needed.sh
@@ -0,0 +1,8 @@
+#!/bin/sh
+# this is rather stupid script is needed as testr init
+# complains if there is already a repo.
+if [ -d nova_tests/.testrepository ]
+then
+    exit 0
+fi
+testr init -d nova_tests
diff --git a/tools/test-requires b/tools/test-requires
index 47dfc659d0..4709eb778e 100644
--- a/tools/test-requires
+++ b/tools/test-requires
@@ -1,5 +1,6 @@
-nose
+distribute>=0.6.24
 coverage
+discover
 mock
 mox
 fixtures>=0.3.12
@@ -17,4 +18,6 @@ netifaces
 sphinx
 docutils==0.9.1 # for bug 1091333, remove after sphinx >1.1.3 is released.
 python-spidermonkey
+python-subunit
+testrepository>=0.0.13
 testtools>=0.9.29
diff --git a/tox.ini b/tox.ini
index d9556a7039..3c5bf14627 100644
--- a/tox.ini
+++ b/tox.ini
@@ -5,18 +5,16 @@ envlist = py26,py27,pep8
 deps = -r{toxinidir}/tools/test-requires
        -r{toxinidir}/tools/pip-requires
 setenv = VIRTUAL_ENV={envdir}
-         NOSE_WITH_OPENSTACK=1
-         NOSE_OPENSTACK_COLOR=1
-         NOSE_OPENSTACK_RED=0.05
-         NOSE_OPENSTACK_YELLOW=0.025
-         NOSE_OPENSTACK_SHOW_ELAPSED=1
+         EVENTLET_NO_GREENDNS=yes
 commands =
-    nosetests --no-path-adjustment --where=../nova_tests
-    nosetests --no-path-adjustment {posargs}
+   python setup.py testr --slowest --testr-args='--concurrency=1 {posargs}'
+   bash tools/init_testr_if_needed.sh
+   python setup.py testr --slowest --testr-args='--concurrency=1 --here=nova_tests {posargs}'
 sitepackages = False
 
 [testenv:cover]
-commands = nosetests --no-path-adjustment --with-coverage --cover-erase --cover-package=ceilometer --cover-inclusive []
+setenv = VIRTUAL_ENV={envdir}
+commands = python setup.py testr --coverage
 
 [testenv:pep8]
 # Install bounded pep8/pyflakes first, then let flake8 install