diff --git a/.gitignore b/.gitignore
index 4cde4c896c..0ed16fc576 100644
--- a/.gitignore
+++ b/.gitignore
@@ -8,3 +8,5 @@ tags
 *.log
 heat-test.db
 .venv
+AUTHORS
+ChangeLog
diff --git a/MANIFEST.in b/MANIFEST.in
index 81de932222..2a506f0b9d 100644
--- a/MANIFEST.in
+++ b/MANIFEST.in
@@ -1,3 +1,5 @@
+include AUTHORS
+include ChangeLog
 include HACKING.rst
 include LICENSE
 include README.rst
diff --git a/heat/api/v1/__init__.py b/heat/api/v1/__init__.py
index 3737229ff5..3cf5a81443 100644
--- a/heat/api/v1/__init__.py
+++ b/heat/api/v1/__init__.py
@@ -15,6 +15,9 @@
 
 import logging
 import routes
+import gettext
+
+gettext.install('heat', unicode=1)
 
 from heat.api.v1 import stacks
 from heat.common import wsgi
@@ -61,7 +64,7 @@ class API(wsgi.Router):
 
         for action in self._actions:
             mapper.connect("/", controller=stacks_resource, action=action,
-                           conditions=conditions(action))
+                conditions=conditions(action))
 
         mapper.connect("/", controller=stacks_resource, action="index")
 
diff --git a/heat/openstack/common/setup.py b/heat/openstack/common/setup.py
new file mode 100644
index 0000000000..40178903c8
--- /dev/null
+++ b/heat/openstack/common/setup.py
@@ -0,0 +1,183 @@
+# 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.
+
+"""
+Utilities with minimum-depends for use in setup.py
+"""
+
+import os
+import re
+import subprocess
+
+from setuptools.command import sdist
+
+
+def parse_mailmap(mailmap='.mailmap'):
+    mapping = {}
+    if os.path.exists(mailmap):
+        fp = open(mailmap, 'r')
+        for l in fp:
+            l = l.strip()
+            if not l.startswith('#') and ' ' in l:
+                canonical_email, alias = [x for x in l.split(' ') \
+                                         if x.startswith('<')]
+                mapping[alias] = canonical_email
+    return mapping
+
+
+def canonicalize_emails(changelog, mapping):
+    """Takes in a string and an email alias mapping and replaces all
+       instances of the aliases in the string with their real email.
+    """
+    for alias, email in mapping.iteritems():
+        changelog = changelog.replace(alias, email)
+    return changelog
+
+
+# Get requirements from the first file that exists
+def get_reqs_from_files(requirements_files):
+    reqs_in = []
+    for requirements_file in requirements_files:
+        if os.path.exists(requirements_file):
+            return open(requirements_file, 'r').read().split('\n')
+    return []
+
+
+def parse_requirements(requirements_files=['requirements.txt',
+                                           'tools/pip-requires']):
+    requirements = []
+    for line in get_reqs_from_files(requirements_files):
+        if re.match(r'\s*-e\s+', line):
+            requirements.append(re.sub(r'\s*-e\s+.*#egg=(.*)$', r'\1',
+                                line))
+        elif re.match(r'\s*-f\s+', line):
+            pass
+        else:
+            requirements.append(line)
+
+    return requirements
+
+
+def parse_dependency_links(requirements_files=['requirements.txt',
+                                               'tools/pip-requires']):
+    dependency_links = []
+    for line in get_reqs_from_files(requirements_files):
+        if re.match(r'(\s*#)|(\s*$)', line):
+            continue
+        if re.match(r'\s*-[ef]\s+', line):
+            dependency_links.append(re.sub(r'\s*-[ef]\s+', '', line))
+    return dependency_links
+
+
+def write_requirements():
+    venv = os.environ.get('VIRTUAL_ENV', None)
+    if venv is not None:
+        with open("requirements.txt", "w") as req_file:
+            output = subprocess.Popen(["pip", "-E", venv, "freeze", "-l"],
+                                      stdout=subprocess.PIPE)
+            requirements = output.communicate()[0].strip()
+            req_file.write(requirements)
+
+
+def _run_shell_command(cmd):
+    output = subprocess.Popen(["/bin/sh", "-c", cmd],
+                              stdout=subprocess.PIPE)
+    return output.communicate()[0].strip()
+
+
+def write_vcsversion(location):
+    """Produce a vcsversion dict that mimics the old one produced by bzr.
+    """
+    if os.path.isdir('.git'):
+        branch_nick_cmd = 'git branch | grep -Ei "\* (.*)" | cut -f2 -d" "'
+        branch_nick = _run_shell_command(branch_nick_cmd)
+        revid_cmd = "git rev-parse HEAD"
+        revid = _run_shell_command(revid_cmd).split()[0]
+        revno_cmd = "git log --oneline | wc -l"
+        revno = _run_shell_command(revno_cmd)
+        with open(location, 'w') as version_file:
+            version_file.write("""
+# This file is automatically generated by setup.py, So don't edit it. :)
+version_info = {
+    'branch_nick': '%s',
+    'revision_id': '%s',
+    'revno': %s
+}
+""" % (branch_nick, revid, revno))
+
+
+def write_git_changelog():
+    """Write a changelog based on the git changelog."""
+    if os.path.isdir('.git'):
+        git_log_cmd = 'git log --stat'
+        changelog = _run_shell_command(git_log_cmd)
+        mailmap = parse_mailmap()
+        with open("ChangeLog", "w") as changelog_file:
+            changelog_file.write(canonicalize_emails(changelog, mailmap))
+
+
+def generate_authors():
+    """Create AUTHORS file using git commits."""
+    jenkins_email = 'jenkins@review.openstack.org'
+    old_authors = 'AUTHORS.in'
+    new_authors = 'AUTHORS'
+    if os.path.isdir('.git'):
+        # don't include jenkins email address in AUTHORS file
+        git_log_cmd = "git log --format='%aN <%aE>' | sort -u | " \
+                      "grep -v " + jenkins_email
+        changelog = _run_shell_command(git_log_cmd)
+        mailmap = parse_mailmap()
+        with open(new_authors, 'w') as new_authors_fh:
+            new_authors_fh.write(canonicalize_emails(changelog, mailmap))
+            if os.path.exists(old_authors):
+                with open(old_authors, "r") as old_authors_fh:
+                    new_authors_fh.write('\n' + old_authors_fh.read())
+
+
+def get_cmdclass():
+    """Return dict of commands to run from setup.py."""
+
+    cmdclass = dict()
+
+    class LocalSDist(sdist.sdist):
+        """Builds the ChangeLog and Authors files from VC first."""
+
+        def run(self):
+            write_git_changelog()
+            generate_authors()
+            # sdist.sdist is an old style class, can't use super()
+            sdist.sdist.run(self)
+
+    cmdclass['sdist'] = LocalSDist
+
+    # If Sphinx is installed on the box running setup.py,
+    # enable setup.py to build the documentation, otherwise,
+    # just ignore it
+    try:
+        from sphinx.setup_command import BuildDoc
+
+        class LocalBuildDoc(BuildDoc):
+            def run(self):
+                for builder in ['html', 'man']:
+                    self.builder = builder
+                    self.finalize_options()
+                    BuildDoc.run(self)
+        cmdclass['build_sphinx'] = LocalBuildDoc
+    except ImportError:
+        pass
+
+    return cmdclass
diff --git a/heat/testing/fake/__init__.py b/heat/testing/fake/__init__.py
index 5cdad4717e..e69de29bb2 100644
--- a/heat/testing/fake/__init__.py
+++ b/heat/testing/fake/__init__.py
@@ -1 +0,0 @@
-import rabbit
diff --git a/heat/tests/test_resources.py b/heat/tests/test_resources.py
index dc5f7f10bd..4e285774e1 100644
--- a/heat/tests/test_resources.py
+++ b/heat/tests/test_resources.py
@@ -28,7 +28,7 @@ class instancesTest(unittest.TestCase):
         print "instancesTest teardown complete"
 
     def test_instance_create(self):
-        f = open('../../templates/WordPress_Single_Instance_gold.template')
+        f = open('templates/WordPress_Single_Instance_gold.template')
         t = json.loads(f.read())
         f.close()
 
@@ -78,7 +78,7 @@ class instancesTest(unittest.TestCase):
         assert(instance.id > 0)
 
     def test_instance_create_delete(self):
-        f = open('../../templates/WordPress_Single_Instance_gold.template')
+        f = open('templates/WordPress_Single_Instance_gold.template')
         t = json.loads(f.read())
         f.close()
 
diff --git a/heat/tests/test_stacks.py b/heat/tests/test_stacks.py
index 8ebdd541ac..e78a0c0e2e 100644
--- a/heat/tests/test_stacks.py
+++ b/heat/tests/test_stacks.py
@@ -29,7 +29,7 @@ class stacksTest(unittest.TestCase):
 
     # We use this in a number of tests so it's factored out here.
     def start_wordpress_stack(self, stack_name):
-        f = open('../../templates/WordPress_Single_Instance_gold.template')
+        f = open('templates/WordPress_Single_Instance_gold.template')
         t = json.loads(f.read())
         f.close()
         params = {}
@@ -146,7 +146,7 @@ class stacksTest(unittest.TestCase):
         self.m.ReplayAll()
         stack.create_blocking()
 
-        f = open('../../templates/WordPress_Single_Instance_gold.template')
+        f = open('templates/WordPress_Single_Instance_gold.template')
         t = json.loads(f.read())
         params = {}
         parameters = {}
diff --git a/openstack-common.conf b/openstack-common.conf
index 7a0da8891c..7a059c8865 100644
--- a/openstack-common.conf
+++ b/openstack-common.conf
@@ -1,7 +1,7 @@
 [DEFAULT]
 
 # The list of modules to copy from openstack-common
-modules=cfg,local,iniparser,utils,exception,timeutils,importutils
+modules=cfg,local,iniparser,utils,exception,timeutils,importutils,setup
 
 # The base module to hold the copy of openstack.common
 base=heat
diff --git a/setup.cfg b/setup.cfg
index 6a7725f0c1..d3062c4b94 100644
--- a/setup.cfg
+++ b/setup.cfg
@@ -22,3 +22,6 @@ keywords = _ gettext ngettext l_ lazy_gettext
 mapping_file = babel.cfg
 output_file = heat/locale/heat.pot
 
+[nosetests]
+verbosity=2
+detailed-errors=1
diff --git a/setup.py b/setup.py
index bfcbce1dd8..58801cf7ae 100755
--- a/setup.py
+++ b/setup.py
@@ -17,58 +17,19 @@ import gettext
 import os
 import subprocess
 
-from setuptools import setup, find_packages
-from setuptools.command.sdist import sdist
+import setuptools
 
-gettext.install('heat', unicode=1)
+from heat.openstack.common import setup
 
+setup.write_vcsversion('heat/vcsversion.py')
+
+# import this after write_vcsversion because version imports vcsversion
 from heat import version
 
+requires = setup.parse_requirements()
+depend_links = setup.parse_dependency_links()
 
-def run_git_command(cmd):
-    output = subprocess.Popen(["/bin/sh", "-c", cmd],
-                              stdout=subprocess.PIPE)
-    return output.communicate()[0].strip()
-
-
-if os.path.isdir('.git'):
-    branch_nick_cmd = 'git branch | grep -Ei "\* (.*)" | cut -f2 -d" "'
-    branch_nick = run_git_command(branch_nick_cmd)
-    revid_cmd = "git --no-pager log --max-count=1 | cut -f2 -d' ' | head -1"
-    revid = run_git_command(revid_cmd)
-    revno_cmd = "git --no-pager log --oneline | wc -l"
-    revno = run_git_command(revno_cmd)
-    with open("heat/vcsversion.py", 'w') as version_file:
-        version_file.write("""
-# This file is automatically generated by setup.py, So don't edit it. :)
-version_info = {
-    'branch_nick': '%s',
-    'revision_id': '%s',
-    'revno': %s
-}
-""" % (branch_nick, revid, revno))
-
-cmdclass = {}
-
-# If Sphinx is installed on the box running setup.py,
-# enable setup.py to build the documentation, otherwise,
-# just ignore it
-try:
-    from sphinx.setup_command import BuildDoc
-
-    class local_BuildDoc(BuildDoc):
-        def run(self):
-            for builder in ['html', 'man']:
-                self.builder = builder
-                self.finalize_options()
-                BuildDoc.run(self)
-    cmdclass['build_sphinx'] = local_BuildDoc
-
-except:
-    pass
-
-
-setup(
+setuptools.setup(
     name='heat',
     version=version.canonical_version_string(),
     description='The heat project provides services for provisioning '
@@ -77,8 +38,10 @@ setup(
     author='Heat API Developers',
     author_email='discuss@heat-api.org',
     url='http://heat.openstack.org/',
-    packages=find_packages(exclude=['bin']),
-    cmdclass=cmdclass,
+    packages=setuptools.find_packages(exclude=['bin']),
+    cmdclass=setup.get_cmdclass(),
+    install_requires=requires,
+    dependency_links=depend_links,
     include_package_data=True,
     classifiers=[
         'Development Status :: 4 - Beta',
@@ -92,15 +55,4 @@ setup(
              'bin/heat-metadata',
              'bin/heat-engine',
              'bin/heat-db-setup'],
-    data_files=[('/etc/heat', ['etc/heat-api.conf',
-                               'etc/heat-api-paste.ini',
-                               'etc/heat-metadata.conf',
-                               'etc/heat-metadata-paste.ini',
-                               'etc/heat-engine.conf',
-                               'etc/heat-engine-paste.ini']),
-                ('/etc/bash_completion.d', ['etc/bash_completion.d/heat']),
-                ('/var/log/heat', ['var/log/heat/api.log',
-                                   'var/log/heat/metadata.log',
-                                   'var/log/heat/engine.log']),
-                ('/var/lib/heat', ['var/lib/heat/.dummy'])],
     py_modules=[])
diff --git a/tools/test-requires b/tools/test-requires
index 6f14508c3e..2befbbb386 100644
--- a/tools/test-requires
+++ b/tools/test-requires
@@ -2,8 +2,9 @@
 distribute>=0.6.24
 
 coverage
+mox
 nose
 nosexcover
 openstack.nose_plugin
-pep8==0.6.1
-mox
+pep8>=1.0
+sphinx
diff --git a/tox.ini b/tox.ini
index 66a87194f5..96afb18b32 100644
--- a/tox.ini
+++ b/tox.ini
@@ -1,34 +1,42 @@
 [tox]
-envlist = py27,pep8
+envlist = py26,py27,pep8
 
 [testenv]
 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
 deps = -r{toxinidir}/tools/pip-requires
        -r{toxinidir}/tools/test-requires
-commands = {toxinidir}/run_tests.sh -N -P
-
-[tox:jenkins]
-sitepackages = True
-downloadcache = ~/cache/pip
+commands = nosetests
 
 [testenv:pep8]
 deps = pep8
-commands = /bin/bash run_tests.sh -N --pep8
-
-[testenv:coverage]
-commands = /bin/bash run_tests.sh -N -P --coverage
+commands = pep8 --repeat --show-source heat setup.py
 
 [testenv:venv]
 commands = {posargs}
 
+[testenv:cover]
+commands = nosetests --cover-erase --cover-package=heat --with-xcoverage
+
+[tox:jenkins]
+downloadcache = ~/cache/pip
+
+[testenv:jenkins26]
+basepython = python2.6
+setenv = NOSE_WITH_XUNIT=1
+
 [testenv:jenkins27]
 basepython = python2.7
-deps = file://{toxinidir}/.cache.bundle
+setenv = NOSE_WITH_XUNIT=1
 
 [testenv:jenkinscover]
-deps = file://{toxinidir}/.cache.bundle
-commands = /bin/bash run_tests.sh -N --coverage
+setenv = NOSE_WITH_XUNIT=1
+commands = nosetests --cover-erase --cover-package=heat --with-xcoverage
 
 [testenv:jenkinsvenv]
-deps = file://{toxinidir}/.cache.bundle
+setenv = NOSE_WITH_XUNIT=1
 commands = {posargs}
diff --git a/var/lib/heat/.dummy b/var/lib/heat/.dummy
deleted file mode 100644
index e69de29bb2..0000000000
diff --git a/var/log/heat/api.log b/var/log/heat/api.log
deleted file mode 100644
index dc269db1b6..0000000000
--- a/var/log/heat/api.log
+++ /dev/null
@@ -1 +0,0 @@
-#dummy file
diff --git a/var/log/heat/engine.log b/var/log/heat/engine.log
deleted file mode 100644
index dc269db1b6..0000000000
--- a/var/log/heat/engine.log
+++ /dev/null
@@ -1 +0,0 @@
-#dummy file
diff --git a/var/log/heat/metadata.log b/var/log/heat/metadata.log
deleted file mode 100644
index e69de29bb2..0000000000