diff --git a/.testr.conf b/.testr.conf
index 38e2a618c..55eaef199 100644
--- a/.testr.conf
+++ b/.testr.conf
@@ -1,4 +1,4 @@
 [DEFAULT] 
-test_command=OS_STDOUT_CAPTURE=1 OS_STDERR_CAPTURE=1 OS_TEST_TIMEOUT=60 ${PYTHON:-python} -m subunit.run discover -s ironic_python_agent/tests/ -p "*.py" $LISTOPT $IDOPTION 
+test_command=OS_STDOUT_CAPTURE=1 OS_STDERR_CAPTURE=1 OS_TEST_TIMEOUT=60 ${PYTHON:-python} -m subunit.run discover -t ./ ${OS_TEST_PATH:-./ironic_python_agent/tests} $LISTOPT $IDOPTION
 test_id_option=--load-list $IDFILE 
 test_list_option=--list
diff --git a/ironic_python_agent/tests/extensions/__init__.py b/ironic_python_agent/tests/unit/extensions/__init__.py
similarity index 100%
rename from ironic_python_agent/tests/extensions/__init__.py
rename to ironic_python_agent/tests/unit/extensions/__init__.py
diff --git a/ironic_python_agent/tests/extensions/base.py b/ironic_python_agent/tests/unit/extensions/test_base.py
similarity index 100%
rename from ironic_python_agent/tests/extensions/base.py
rename to ironic_python_agent/tests/unit/extensions/test_base.py
diff --git a/ironic_python_agent/tests/extensions/clean.py b/ironic_python_agent/tests/unit/extensions/test_clean.py
similarity index 100%
rename from ironic_python_agent/tests/extensions/clean.py
rename to ironic_python_agent/tests/unit/extensions/test_clean.py
diff --git a/ironic_python_agent/tests/extensions/flow.py b/ironic_python_agent/tests/unit/extensions/test_flow.py
similarity index 100%
rename from ironic_python_agent/tests/extensions/flow.py
rename to ironic_python_agent/tests/unit/extensions/test_flow.py
diff --git a/ironic_python_agent/tests/extensions/image.py b/ironic_python_agent/tests/unit/extensions/test_image.py
similarity index 100%
rename from ironic_python_agent/tests/extensions/image.py
rename to ironic_python_agent/tests/unit/extensions/test_image.py
diff --git a/ironic_python_agent/tests/extensions/iscsi.py b/ironic_python_agent/tests/unit/extensions/test_iscsi.py
similarity index 100%
rename from ironic_python_agent/tests/extensions/iscsi.py
rename to ironic_python_agent/tests/unit/extensions/test_iscsi.py
diff --git a/ironic_python_agent/tests/extensions/standby.py b/ironic_python_agent/tests/unit/extensions/test_standby.py
similarity index 100%
rename from ironic_python_agent/tests/extensions/standby.py
rename to ironic_python_agent/tests/unit/extensions/test_standby.py
diff --git a/tox.ini b/tox.ini
index 65ffead49..de1dfcb18 100644
--- a/tox.ini
+++ b/tox.ini
@@ -1,25 +1,35 @@
 [tox]
 minversion = 1.6
 skipsdist = True
-envlist = py34,py27,pep8
+envlist = py34,py27,func,pep8
 
 [testenv]
 usedevelop = True
 install_command = pip install --allow-external -U {opts} {packages}
-# Define virtualenv directory, port to use for functional testing, and number
-# of seconds to wait for the agent to come alive during functional testing.
 setenv =
-    VIRTUAL_ENV={envdir}
-    TEST_PORT=9999
-    IPA_WAIT_TIME=5
-deps = -r{toxinidir}/requirements.txt
-       -r{toxinidir}/test-requirements.txt
+  VIRTUAL_ENV={envdir}
+  OS_TEST_PATH=./ironic_python_agent/tests/unit
+deps =
+  -r{toxinidir}/requirements.txt
+  -r{toxinidir}/test-requirements.txt
 commands =
   python setup.py testr --slowest --testr-args='{posargs:}'
 
 [tox:jenkins]
 downloadcache = ~/cache/pip
 
+[testenv:func]
+usedevelop = True
+# Define virtualenv directory, port to use for functional testing, and number
+# of seconds to wait for the agent to come alive during functional testing.
+setenv =
+  VIRTUAL_ENV={envdir}
+  OS_TEST_PATH=./ironic_python_agent/tests/functional
+  TEST_PORT=9999
+  IPA_WAIT_TIME=5
+commands =
+  python setup.py testr --slowest --testr-args='{posargs:}'
+
 [testenv:pep8]
 commands =
   flake8 {posargs:ironic_python_agent imagebuild}