diff --git a/README.md b/README.md
index 3d8d9d316..43ca969a3 100644
--- a/README.md
+++ b/README.md
@@ -139,6 +139,23 @@ comma-delimited string. Some examples:
 * break=after-first-boot,before-pre-install will break after the first-boot
   hooks and before the pre-install hooks.
 
+Testing Elements
+----------------
+
+Elements can be tested using python. To create a test:
+
+* Create a directory called 'tests' in the element directory.
+
+* Create an empty file called '\_\_init\_\_.py' to make it into a python
+  package.
+
+* Create your test files as 'test\_whatever.py', using regular python test
+  code.
+
+To run all the tests use testr - `testr run`. To run just some tests provide
+one or more regex filters - tests matching any of them are run -
+`testr run apt-proxy`.
+
 Third party elements
 --------------------
 
diff --git a/diskimage_builder/__init__.py b/diskimage_builder/__init__.py
new file mode 100644
index 000000000..26d6cfb46
--- /dev/null
+++ b/diskimage_builder/__init__.py
@@ -0,0 +1,18 @@
+# Copyright 2012 Hewlett-Packard Development Company, L.P.
+# 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.
+
+
+# conceptually load_tests should be here, but see
+# http://bugs.python.org/issue16662 instead, its in test_elements.py
diff --git a/diskimage_builder/test_elements.py b/diskimage_builder/test_elements.py
new file mode 100644
index 000000000..1a626533f
--- /dev/null
+++ b/diskimage_builder/test_elements.py
@@ -0,0 +1,50 @@
+# Copyright 2012 Hewlett-Packard Development Company, L.P.
+# 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.
+
+import os
+import sys
+import unittest
+
+class StubPackage: pass
+
+# conceptually load_tests should be in __init__, but see
+# http://bugs.python.org/issue16662 instead. So, its here in test_elements.py
+def load_tests(loader, tests, pattern):
+    """load tests for diskimage_builder elements."""
+    if pattern is None:
+        # http://bugs.python.org/issue11218
+        pattern = "test*.py"
+    this_dir = os.path.dirname(__file__)
+    elements_dir = os.path.join(this_dir, "..", "elements")
+    # Make a fake elements top level package, as discovery doesn't let us
+    # override the python path.
+    package = StubPackage()
+    package.__path__ = [elements_dir]
+    sys.modules['elements'] = package
+    elements = os.listdir(elements_dir)
+    for element in elements:
+        element_dir = os.path.join(elements_dir, element)
+        tests_path = os.path.join(element_dir, "tests")
+        if (not os.path.isdir(tests_path) or
+            not os.path.isfile(os.path.join(tests_path, '__init__.py'))):
+            continue
+        # Create a 'package' for the element, so it can be imported.
+        package = StubPackage()
+        package.__path__ = [element_dir]
+        sys.modules['elements.%s' % element] = package
+        # Try importing the test module
+        package_tests = loader.discover(start_dir=tests_path, pattern=pattern)
+        tests.addTests(package_tests)
+    return tests