diff --git a/tools/install_venv.py b/tools/install_venv.py
new file mode 100644
index 000000000..5c3ef374b
--- /dev/null
+++ b/tools/install_venv.py
@@ -0,0 +1,137 @@
+# vim: tabstop=4 shiftwidth=4 softtabstop=4
+
+# Copyright 2010 United States Government as represented by the
+# Administrator of the National Aeronautics and Space Administration.
+# All Rights Reserved.
+#
+# Copyright 2010 OpenStack LLC.
+#
+#    Licensed under the Apache License, Version 2.0 (the "License"); you may
+#    not use this file except in compliance with the License. You may obtain
+#    a copy of the License at
+#
+#         http://www.apache.org/licenses/LICENSE-2.0
+#
+#    Unless required by applicable law or agreed to in writing, software
+#    distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
+#    WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
+#    License for the specific language governing permissions and limitations
+#    under the License.
+
+"""
+Installation script for Quantum's development virtualenv
+"""
+
+import os
+import subprocess
+import sys
+
+
+ROOT = os.path.dirname(os.path.dirname(os.path.realpath(__file__)))
+VENV = os.path.join(ROOT, '.quantum-venv')
+PIP_REQUIRES = os.path.join(ROOT, 'tools', 'pip-requires')
+
+
+def die(message, *args):
+    print >> sys.stderr, message % args
+    sys.exit(1)
+
+
+def run_command(cmd, redirect_output=True, check_exit_code=True):
+    """
+    Runs a command in an out-of-process shell, returning the
+    output of that command.  Working directory is ROOT.
+    """
+    if redirect_output:
+        stdout = subprocess.PIPE
+    else:
+        stdout = None
+
+    proc = subprocess.Popen(cmd, cwd=ROOT, stdout=stdout)
+    output = proc.communicate()[0]
+    if check_exit_code and proc.returncode != 0:
+        die('Command "%s" failed.\n%s', ' '.join(cmd), output)
+    return output
+
+
+HAS_EASY_INSTALL = bool(run_command(['which', 'easy_install'],
+                                    check_exit_code=False).strip())
+HAS_VIRTUALENV = bool(run_command(['which', 'virtualenv'],
+                                    check_exit_code=False).strip())
+
+
+def check_dependencies():
+    """Make sure virtualenv is in the path."""
+
+    if not HAS_VIRTUALENV:
+        print 'not found.'
+        # Try installing it via easy_install...
+        if HAS_EASY_INSTALL:
+            print 'Installing virtualenv via easy_install...',
+            if not run_command(['which', 'easy_install']):
+                die('ERROR: virtualenv not found.\n\n'
+                    'Quantum requires virtualenv, please install'
+                    ' it using your favorite package management tool')
+            print 'done.'
+    print 'done.'
+
+
+def create_virtualenv(venv=VENV):
+    """Creates the virtual environment and installs PIP only into the
+    virtual environment
+    """
+    print 'Creating venv...',
+    run_command(['virtualenv', '-q', '--no-site-packages', VENV])
+    print 'done.'
+    print 'Installing pip in virtualenv...',
+    if not run_command(['tools/with_venv.sh', 'easy_install', 'pip']).strip():
+        die("Failed to install pip.")
+    print 'done.'
+
+
+def install_dependencies(venv=VENV):
+    print 'Installing dependencies with pip (this can take a while)...'
+
+    # Install greenlet by hand - just listing it in the requires file does not
+    # get it in stalled in the right order
+    venv_tool = 'tools/with_venv.sh'
+    run_command([venv_tool, 'pip', 'install', '-E', venv, '-r', PIP_REQUIRES],
+                redirect_output=False)
+
+    # Tell the virtual env how to "import quantum"
+    pthfile = os.path.join(venv, "lib", "python2.6", "site-packages",
+                                 "quantum.pth")
+    f = open(pthfile, 'w')
+    f.write("%s\n" % ROOT)
+
+
+def print_help():
+    help = """
+ Quantum development environment setup is complete.
+
+ Quantum development uses virtualenv to track and manage Python dependencies
+ while in development and testing.
+
+ To activate the Quantum virtualenv for the extent of your current shell
+ session you can run:
+
+ $ source .quantum-venv/bin/activate
+
+ Or, if you prefer, you can run commands in the virtualenv on a case by case
+ basis by running:
+
+ $ tools/with_venv.sh <your command>
+
+ Also, make test will automatically use the virtualenv.
+    """
+    print help
+
+
+def main(argv):
+    check_dependencies()
+    create_virtualenv()
+    install_dependencies()
+    print_help()
+
+if __name__ == '__main__':
+    main(sys.argv)
diff --git a/tools/pip-requires b/tools/pip-requires
new file mode 100644
index 000000000..8dbfd85d3
--- /dev/null
+++ b/tools/pip-requires
@@ -0,0 +1,10 @@
+eventlet>=0.9.12
+nose
+Paste
+PasteDeploy
+pep8==0.5.0
+python-gflags
+routes
+simplejson
+webob
+webtest
diff --git a/tools/with_venv.sh b/tools/with_venv.sh
new file mode 100755
index 000000000..83149462c
--- /dev/null
+++ b/tools/with_venv.sh
@@ -0,0 +1,21 @@
+#!/bin/bash
+# vim: tabstop=4 shiftwidth=4 softtabstop=4
+
+# Copyright 2011 OpenStack LLC.
+# All Rights Reserved.
+#
+#    Licensed under the Apache License, Version 2.0 (the "License"); you may
+#    not use this file except in compliance with the License. You may obtain
+#    a copy of the License at
+#
+#         http://www.apache.org/licenses/LICENSE-2.0
+#
+#    Unless required by applicable law or agreed to in writing, software
+#    distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
+#    WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
+#    License for the specific language governing permissions and limitations
+#    under the License.
+
+TOOLS=`dirname $0`
+VENV=$TOOLS/../.quantum-venv
+source $VENV/bin/activate && $@