diff --git a/AUTHORS b/AUTHORS
index 83ca41159..141a7423c 100644
--- a/AUTHORS
+++ b/AUTHORS
@@ -51,6 +51,7 @@ Marc Schlaich
 Mark Abramowitz
 Markus Unterwaditzer
 Martijn Faassen
+Michael Birtwell
 Michael Droettboom
 Nicolas Delaby
 Pieter Mulder
diff --git a/CHANGELOG b/CHANGELOG
index 49af784b0..d699bdd84 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -4,6 +4,9 @@
 - fix #1035: collecting tests if test module level obj has __getattr__().
   Thanks Suor for the report and Bruno Oliveira / Tom Viner for the PR.
 
+- fix #331: don't collect tests if their failure cannot be reported correctly
+  e.g. they are a callable instance of a class.
+
 2.8.2
 -----
 
diff --git a/_pytest/python.py b/_pytest/python.py
index b194031c7..b7a737a94 100644
--- a/_pytest/python.py
+++ b/_pytest/python.py
@@ -312,11 +312,14 @@ def pytest_pycollect_makeitem(collector, name, obj):
     elif collector.istestfunction(obj, name):
         # mock seems to store unbound methods (issue473), normalize it
         obj = getattr(obj, "__func__", obj)
-        if not isfunction(obj):
+        # We need to try and unwrap the function if it's a functools.partial
+        # or a funtools.wrapped.
+        # We musn't if it's been wrapped with mock.patch (python 2 only)
+        if not (isfunction(obj) or isfunction(get_real_func(obj))):
             collector.warn(code="C2", message=
                 "cannot collect %r because it is not a function."
                 % name, )
-        if getattr(obj, "__test__", True):
+        elif getattr(obj, "__test__", True):
             if is_generator(obj):
                 res = Generator(name, parent=collector)
             else:
diff --git a/testing/python/collect.py b/testing/python/collect.py
index 228d58364..b78374fd5 100644
--- a/testing/python/collect.py
+++ b/testing/python/collect.py
@@ -1013,3 +1013,27 @@ def test_collect_functools_partial(testdir):
     """)
     result = testdir.inline_run()
     result.assertoutcome(passed=6, failed=2)
+
+
+def test_dont_collect_non_function_callable(testdir):
+    """Test for issue https://github.com/pytest-dev/pytest/issues/331
+
+    In this case an INTERNALERROR occurred trying to report the failure of
+    a test like this one because py test failed to get the source lines.
+    """
+    testdir.makepyfile("""
+        class Oh(object):
+            def __call__(self):
+                pass
+
+        test_a = Oh()
+
+        def test_real():
+            pass
+    """)
+    result = testdir.runpytest('-rw')
+    result.stdout.fnmatch_lines([
+        '*collected 1 item*',
+        'WC2 *',
+        '*1 passed, 1 pytest-warnings in *',
+    ])