diff --git a/.gitignore b/.gitignore
index 9a539564..09a0cb67 100644
--- a/.gitignore
+++ b/.gitignore
@@ -1,7 +1,14 @@
+.coverage
+.tox
 .venv
 **/.DS_Store
+*.pyc
+*.pyd
+*.pyo
 MANIFEST
 build/
 dist/
 docs/_build
+htmlcov/
 *.egg-info
+__pycache__/
diff --git a/.travis.yml b/.travis.yml
index a7f2f637..815192a6 100644
--- a/.travis.yml
+++ b/.travis.yml
@@ -4,6 +4,7 @@ notifications:
   email: false
 
 language: python
+cache: pip
 
 python:
 - "2.7"
@@ -12,7 +13,7 @@ install:
 - pip install -r dev_requirements.txt
 
 script:
-- MITOGEN_LOG_LEVEL=debug PYTHONPATH=. ${TRAVIS_BUILD_DIR}/test.sh
+- MITOGEN_LOG_LEVEL=debug PYTHONPATH=. ${TRAVIS_BUILD_DIR}/test
 
 services:
   - docker
diff --git a/dev_requirements.txt b/dev_requirements.txt
index 7761ff4a..59bf43de 100644
--- a/dev_requirements.txt
+++ b/dev_requirements.txt
@@ -1,5 +1,6 @@
 -r docs/docs-requirements.txt
 ansible==2.3.1.0
+coverage==4.5.1
 Django==1.6.11; python_version < '2.7'
 Django==1.11.5; python_version >= '2.7' # for module_finder_test
 https://github.com/docker/docker-py/archive/1.10.6.tar.gz; python_version < '2.7'
@@ -9,6 +10,7 @@ pytest-catchlog==1.2.2
 pytest==3.1.2
 PyYAML==3.11; python_version < '2.7'
 PyYAML==3.12; python_version >= '2.7'
+timeoutcontext==1.2.0
 unittest2==1.1.0
 # Fix InsecurePlatformWarning while creating py26 tox environment
 # https://urllib3.readthedocs.io/en/latest/advanced-usage.html#ssl-warnings
diff --git a/setup.cfg b/setup.cfg
index 44668df3..92051682 100644
--- a/setup.cfg
+++ b/setup.cfg
@@ -1,3 +1,10 @@
+[coverage:run]
+branch = true
+source =
+    mitogen
+omit =
+    mitogen/compat/*
+
 [flake8]
 ignore = E402,E128,W503
 exclude = mitogen/compat
diff --git a/test b/test
new file mode 100755
index 00000000..71ce18aa
--- /dev/null
+++ b/test
@@ -0,0 +1,14 @@
+#/bin/sh
+set -o errexit
+set -o nounset
+set -o pipefail
+
+UNIT2="$(which unit2)"
+
+coverage erase
+coverage run "${UNIT2}" discover \
+                        --start-directory "tests" \
+                        --pattern '*_test.py' \
+                        "$@"
+coverage html
+echo coverage report is at "file://$(pwd)/htmlcov/index.html"
diff --git a/test.sh b/test.sh
deleted file mode 100755
index ab545104..00000000
--- a/test.sh
+++ /dev/null
@@ -1,63 +0,0 @@
-#!/bin/bash
-
-timeout()
-{
-    python -c '
-import subprocess
-import sys
-import time
-
-deadline = time.time() + float(sys.argv[1])
-proc = subprocess.Popen(sys.argv[2:])
-while time.time() < deadline and proc.poll() is None:
-    time.sleep(1.0)
-
-if proc.poll() is not None:
-    sys.exit(proc.returncode)
-proc.terminate()
-print
-print >> sys.stderr, "Timeout! Command was:", sys.argv[2:]
-print
-sys.exit(1)
-    ' "$@"
-}
-
-trap 'sigint' INT
-sigint()
-{
-    echo "SIGINT received, stopping.."
-    exit 1
-}
-
-run_test()
-{
-    echo "Running $1.."
-    timeout 10 python $1 || fail=$?
-}
-
-run_test tests/ansible_helpers_test.py
-run_test tests/call_error_test.py
-run_test tests/call_function_test.py
-run_test tests/channel_test.py
-run_test tests/fakessh_test.py
-run_test tests/first_stage_test.py
-run_test tests/fork_test.py
-run_test tests/id_allocation_test.py
-run_test tests/importer_test.py
-run_test tests/latch_test.py
-run_test tests/local_test.py
-run_test tests/master_test.py
-run_test tests/module_finder_test.py
-run_test tests/nested_test.py
-run_test tests/parent_test.py
-run_test tests/receiver_test.py
-run_test tests/responder_test.py
-run_test tests/router_test.py
-run_test tests/select_test.py
-run_test tests/ssh_test.py
-run_test tests/utils_test.py
-
-if [ "$fail" ]; then
-    echo "AT LEAST ONE TEST FAILED" >&2
-    exit 1
-fi
diff --git a/tests/README.md b/tests/README.md
index 0ac4bcb1..41c024b5 100644
--- a/tests/README.md
+++ b/tests/README.md
@@ -27,4 +27,4 @@ and run the tests there.
 1. Build the virtual environment ``virtualenv ../venv``
 1. Enable the virtual environment we just built ``source ../venv/bin/activate``
 1. Install Mitogen in pip editable mode ``pip install -e .``
-1. Run ``test.sh``
+1. Run ``test``
diff --git a/tests/__init__.py b/tests/__init__.py
new file mode 100644
index 00000000..e69de29b
diff --git a/tests/call_function_test.py b/tests/call_function_test.py
index d66864b4..de3f1f46 100644
--- a/tests/call_function_test.py
+++ b/tests/call_function_test.py
@@ -64,7 +64,10 @@ class CallFunctionTest(testlib.RouterMixin, testlib.TestCase):
     def test_bad_return_value(self):
         exc = self.assertRaises(mitogen.core.StreamError,
             lambda: self.local.call(func_with_bad_return_value))
-        self.assertEquals(exc[0], "cannot unpickle '__main__'/'CrazyType'")
+        self.assertEquals(
+                exc[0],
+                "cannot unpickle '%s'/'CrazyType'" % (__name__,),
+        )
 
     def test_returns_dead(self):
         self.assertEqual(mitogen.core._DEAD, self.local.call(func_returns_dead))
diff --git a/tests/fakessh_test.py b/tests/fakessh_test.py
index 6e28be1d..8711b46b 100644
--- a/tests/fakessh_test.py
+++ b/tests/fakessh_test.py
@@ -2,6 +2,7 @@
 import os
 import shutil
 
+import timeoutcontext
 import unittest2
 
 import mitogen.fakessh
@@ -10,6 +11,7 @@ import testlib
 
 
 class RsyncTest(testlib.DockerMixin, unittest2.TestCase):
+    @timeoutcontext.timeout(5)
     def test_rsync_from_master(self):
         context = self.docker_ssh_any()
 
@@ -25,6 +27,7 @@ class RsyncTest(testlib.DockerMixin, unittest2.TestCase):
         self.assertTrue(context.call(os.path.exists, '/tmp/data'))
         self.assertTrue(context.call(os.path.exists, '/tmp/data/simple_pkg/a.py'))
 
+    @timeoutcontext.timeout(5)
     def test_rsync_between_direct_children(self):
         # master -> SSH -> has-sudo-pubkey -> rsync(.ssh) -> master ->
         # has-sudo -> rsync
diff --git a/tests/master_test.py b/tests/master_test.py
index 796c7084..cf16d6c5 100644
--- a/tests/master_test.py
+++ b/tests/master_test.py
@@ -1,3 +1,4 @@
+import inspect
 
 import unittest2
 
@@ -9,8 +10,10 @@ class ScanCodeImportsTest(unittest2.TestCase):
     func = staticmethod(mitogen.master.scan_code_imports)
 
     def test_simple(self):
-        co = compile(open(__file__).read(), __file__, 'exec')
+        source_path = inspect.getsourcefile(ScanCodeImportsTest)
+        co = compile(open(source_path).read(), source_path, 'exec')
         self.assertEquals(list(self.func(co)), [
+            (-1, 'inspect', ()),
             (-1, 'unittest2', ()),
             (-1, 'testlib', ()),
             (-1, 'mitogen.master', ()),
diff --git a/tox.ini b/tox.ini
index f9eabeed..70de05df 100644
--- a/tox.ini
+++ b/tox.ini
@@ -8,7 +8,7 @@ deps =
     -r{toxinidir}/dev_requirements.txt
 
 commands =
-    {posargs:./test.sh}
+    {posargs:./test}
 
 [testenv:docs]
 basepython = python