diff --git a/_pytest/python.py b/_pytest/python.py
index e5d6ffbf0..efb594207 100644
--- a/_pytest/python.py
+++ b/_pytest/python.py
@@ -10,12 +10,12 @@ from py._code.code import TerminalRepr
 import _pytest
 cutdir = py.path.local(_pytest.__file__).dirpath()
 
-class FactoryMarker:
+class FixtureFunctionMarker:
     def __init__(self, scope, params):
         self.scope = scope
         self.params = params
     def __call__(self, function):
-        function._pytestfactory = self
+        function._pytestfixturefunction = self
         return function
 
 class SetupMarker:
@@ -26,18 +26,32 @@ class SetupMarker:
         return function
 
 # XXX a test fails when scope="function" how it should be, investigate
-def factory(scope=None, params=None):
-    """ return a decorator to mark functions as resource factories.
+def fixture(scope=None, params=None):
+    """ return a decorator to mark a fixture factory function.
 
-    :arg scope: the scope for which this resource is shared, one of
+    The name of the fixture function can be referenced in a test context
+    to cause activation ahead of running tests.  Test modules or classes
+    can use the pytest.mark.needsfixtures(fixturename) marker to specify
+    needed fixtures.  Test functions can use fixture names as input arguments
+    in which case the object returned from the fixture function will be
+    injected.
+
+    :arg scope: the scope for which this fixture is shared, one of
                 "function", "class", "module", "session". Defaults to "function".
     :arg params: an optional list of parameters which will cause multiple
-                invocations of tests depending on the resource.
+                invocations of the fixture functions and their dependent
+                tests.
     """
-    return FactoryMarker(scope, params)
+    return FixtureFunctionMarker(scope, params)
 
 def setup(scope="function"):
-    """ return a decorator to mark functions as setup functions.
+    """ return a decorator to mark a function as providing a fixture for
+    a testcontext.  A fixture function is executed for each scope and may
+    receive funcargs which allows it to initialise and provide implicit
+    test state.  A fixture function may receive the "testcontext" object
+    and register a finalizer via "testcontext.addfinalizer(finalizer)"
+    which will be called when the last test in the testcontext has
+    executed.
 
     :arg scope: the scope for which the setup function will be active, one
                 of "function", "class", "module", "session".
@@ -112,7 +126,7 @@ def pytest_sessionstart(session):
 def pytest_namespace():
     raises.Exception = pytest.fail.Exception
     return {
-        'factory': factory,
+        'fixture': fixture,
         'setup': setup,
         'raises' : raises,
         'collect': {
@@ -1377,9 +1391,9 @@ class FuncargManager:
                 continue
             # resource factories either have a pytest_funcarg__ prefix
             # or are "funcarg" marked
-            marker = getattr(obj, "_pytestfactory", None)
+            marker = getattr(obj, "_pytestfixturefunction", None)
             if marker is not None:
-                if not isinstance(marker, FactoryMarker):
+                if not isinstance(marker, FixtureFunctionMarker):
                     # magic globals  with __getattr__
                     # give us something thats wrong for that case
                     continue
diff --git a/doc/en/example/costlysetup/conftest.py b/doc/en/example/costlysetup/conftest.py
index 33ae48f39..d689c11b2 100644
--- a/doc/en/example/costlysetup/conftest.py
+++ b/doc/en/example/costlysetup/conftest.py
@@ -1,7 +1,7 @@
 
 import pytest
 
-@pytest.factory("session")
+@pytest.fixture("session")
 def setup(request):
     setup = CostlySetup()
     request.addfinalizer(setup.finalize)
diff --git a/doc/en/example/multipython.py b/doc/en/example/multipython.py
index 13f442354..142ccc7ee 100644
--- a/doc/en/example/multipython.py
+++ b/doc/en/example/multipython.py
@@ -5,12 +5,12 @@ serialization via the pickle module.
 import py, pytest
 
 pythonlist = ['python2.4', 'python2.5', 'python2.6', 'python2.7', 'python2.8']
-@pytest.factory(params=pythonlist)
+@pytest.fixture(params=pythonlist)
 def python1(request, tmpdir):
     picklefile = tmpdir.join("data.pickle")
     return Python(request.param, picklefile)
 
-@pytest.factory(params=pythonlist)
+@pytest.fixture(params=pythonlist)
 def python2(request, python1):
     return Python(request.param, python1.picklefile)
 
diff --git a/doc/en/faq.txt b/doc/en/faq.txt
index 34abe4de4..65946c9c2 100644
--- a/doc/en/faq.txt
+++ b/doc/en/faq.txt
@@ -125,7 +125,7 @@ the ``MYARG`` function argument.
 
 .. note::
 
-    With pytest-2.3 you can use the :ref:`@pytest.factory` decorator
+    With pytest-2.3 you can use the :ref:`@pytest.fixture` decorator
     to mark a function as a funcarg factory.  
 
 .. _`Convention over Configuration`: http://en.wikipedia.org/wiki/Convention_over_Configuration
@@ -146,7 +146,7 @@ is not possible:
   policy - in real-world examples some combinations
   often should not run.
 
-However, with pytest-2.3 you can use the :ref:`@pytest.factory` decorator
+However, with pytest-2.3 you can use the :ref:`@pytest.fixture` decorator
 and specify ``params`` so that all tests depending on the factory-created
 resource will run multiple times with different parameters.
 
diff --git a/doc/en/funcarg_compare.txt b/doc/en/funcarg_compare.txt
index 084be31e4..b1700aaa0 100644
--- a/doc/en/funcarg_compare.txt
+++ b/doc/en/funcarg_compare.txt
@@ -63,9 +63,9 @@ new facilities.
 Direct scoping of funcarg factories
 --------------------------------------------------------
 
-Instead of calling cached_setup(), you can use the :ref:`@pytest.factory <@pytest.factory>` decorator and directly state the scope::
+Instead of calling cached_setup(), you can use the :ref:`@pytest.fixture <@pytest.fixture>` decorator and directly state the scope::
 
-    @pytest.factory(scope="session")
+    @pytest.fixture(scope="session")
     def db(request):
         # factory will only be invoked once per session - 
         db = DataBase()
@@ -87,7 +87,7 @@ or implement a ``pytest_generate_tests`` hook to perform
 parametrization, i.e. calling a test multiple times with different value
 sets.  pytest-2.3 introduces a decorator for use on the factory itself::
 
-    @pytest.factory(params=["mysql", "pg"])
+    @pytest.fixture(params=["mysql", "pg"])
     def db(request):
         ... # use request.param
 
@@ -104,7 +104,7 @@ functions/classes were parametrized via
 
 Of course it's perfectly fine to combine parametrization and scoping::
 
-    @pytest.factory(scope="session", params=["mysql", "pg"])
+    @pytest.fixture(scope="session", params=["mysql", "pg"])
     def db(request):
         if request.param == "mysql":
             db = MySQL()
@@ -125,7 +125,7 @@ When using the ``@factory`` decorator the name of the function
 denotes the name under which the resource can be accessed as a function
 argument::
 
-    @pytest.factory()
+    @pytest.fixture()
     def db(request):
         ...
 
diff --git a/doc/en/funcargs.txt b/doc/en/funcargs.txt
index 9cb526c32..37ec71927 100644
--- a/doc/en/funcargs.txt
+++ b/doc/en/funcargs.txt
@@ -51,7 +51,7 @@ inputs lead to certain outputs.
 
 Concretely, there are three main means of funcarg management:
 
-* a `@pytest.factory`_ marker to define resource factories,
+* a `@pytest.fixture`_ marker to define resource factories,
   their scoping and parametrization.   Factories can themselves 
   receive resources through their function arguments, easing
   the setup of `interdependent resources`_.  Factories can use
@@ -77,9 +77,9 @@ be done with the classical xUnit style approach which encodes resource
 setup statically into the test source code, leading to duplicate and
 hard-to change fixtures.
 
-.. _`@pytest.factory`:
+.. _`@pytest.fixture`:
 
-``@pytest.factory``: Creating parametrized, scoped resources
+``@pytest.fixture``: Creating parametrized, scoped resources
 =====================================================================
 
 Basic funcarg injection example
@@ -91,7 +91,7 @@ and a funcarg::
     # content of ./test_simplefactory.py
     import pytest
 
-    @pytest.factory()
+    @pytest.fixture()
     def myfuncarg():
         return 42
 
@@ -99,7 +99,7 @@ and a funcarg::
         assert myfuncarg == 17
 
 Here, the ``test_function`` needs an object named ``myfuncarg`` and thus
-py.test will discover and call the ``@pytest.factory`` marked ``myfuncarg`` 
+py.test will discover and call the ``@pytest.fixture`` marked ``myfuncarg`` 
 factory function.  Running the tests looks like this::
 
     $ py.test test_simplefactory.py
@@ -168,7 +168,7 @@ funcarg factories starts at test classes, then test modules, then
 Parametrizing test functions
 ==========================================================================
 
-While the `@pytest.factory`_ decorator allows to define parametrization
+While the `@pytest.fixture`_ decorator allows to define parametrization
 of funcarg resources at the factory-level, there are also means to
 define parametrization at test functions directly:
 
@@ -365,18 +365,18 @@ the mechanism was extended and refined:
 
 * previously funcarg factories were specified with a special 
   ``pytest_funcarg__NAME`` prefix instead of using the 
-  ``@pytest.factory`` decorator.
+  ``@pytest.fixture`` decorator.
 
 * Factories received a `request`_ object which managed caching through
   ``request.cached_setup()`` calls and allowed using other funcargs via 
   ``request.getfuncargvalue()`` calls.  These intricate APIs made it hard 
   to do proper parametrization and implement resource caching. The
-  new ``@pytest.factory`` decorator allows to simply declare the scope
+  new ``@pytest.fixture`` decorator allows to simply declare the scope
   and let pytest figure things out for you.
 
 * if you used parametrization and funcarg factories which made use of
   ``request.cached_setup()`` it is recommeneded to invest a few minutes
-  and simplify your funcarg factory code to use the `@pytest.factory`_ 
+  and simplify your funcarg factory code to use the `@pytest.fixture`_ 
   decorator instead.  This will also allow to take advantage of 
   the `automatic per-resource grouping`_ of tests.
 
diff --git a/doc/en/unittest.txt b/doc/en/unittest.txt
index 7c3f8a14b..bc2d84257 100644
--- a/doc/en/unittest.txt
+++ b/doc/en/unittest.txt
@@ -82,7 +82,7 @@ instances, based on a marker, you can do it using :ref:`pytest.mark`` and
     import pytest
     import unittest
 
-    @pytest.factory()
+    @pytest.fixture()
     def db():
         class DummyDB:
             x = 1
diff --git a/testing/test_python.py b/testing/test_python.py
index d710b5d61..a8d8f4153 100644
--- a/testing/test_python.py
+++ b/testing/test_python.py
@@ -744,7 +744,7 @@ class TestMarking:
     def test_accessmarker_function(self, testdir):
         testdir.makepyfile("""
             import pytest
-            @pytest.factory()
+            @pytest.fixture()
             def markers(request):
                 return request.node.markers
             @pytest.mark.XYZ
@@ -758,7 +758,7 @@ class TestMarking:
     def test_accessmarker_dynamic(self, testdir):
         testdir.makeconftest("""
             import pytest
-            @pytest.factory()
+            @pytest.fixture()
             def markers(request):
                 return request.node.markers
 
@@ -1674,11 +1674,11 @@ class TestFuncargFactory:
     def test_receives_funcargs(self, testdir):
         testdir.makepyfile("""
             import pytest
-            @pytest.factory()
+            @pytest.fixture()
             def arg1():
                 return 1
 
-            @pytest.factory()
+            @pytest.fixture()
             def arg2(arg1):
                 return arg1 + 1
 
@@ -1694,11 +1694,11 @@ class TestFuncargFactory:
     def test_receives_funcargs_scope_mismatch(self, testdir):
         testdir.makepyfile("""
             import pytest
-            @pytest.factory(scope="function")
+            @pytest.fixture(scope="function")
             def arg1():
                 return 1
 
-            @pytest.factory(scope="module")
+            @pytest.fixture(scope="module")
             def arg2(arg1):
                 return arg1 + 1
 
@@ -1717,12 +1717,12 @@ class TestFuncargFactory:
         testdir.makepyfile("""
             import pytest
             l = []
-            @pytest.factory(params=[1,2])
+            @pytest.fixture(params=[1,2])
             def arg1(request):
                 l.append(1)
                 return request.param
 
-            @pytest.factory()
+            @pytest.fixture()
             def arg2(arg1):
                 return arg1 + 1
 
@@ -1739,11 +1739,11 @@ class TestFuncargFactory:
         testdir.makepyfile("""
             import pytest
 
-            @pytest.factory()
+            @pytest.fixture()
             def fail(missing):
                 return
 
-            @pytest.factory()
+            @pytest.fixture()
             def call_fail(fail):
                 return
 
@@ -1764,7 +1764,7 @@ class TestFuncargFactory:
             class arg1:
                 def __init__(self, request):
                     self.x = 1
-            arg1 = pytest.factory()(arg1)
+            arg1 = pytest.fixture()(arg1)
 
             class MySetup:
                 def __init__(self, request, arg1):
@@ -1781,7 +1781,7 @@ class TestFuncargFactory:
     def test_request_can_be_overridden(self, testdir):
         testdir.makepyfile("""
             import pytest
-            @pytest.factory()
+            @pytest.fixture()
             def request(request):
                 request.a = 1
                 return request
@@ -1863,7 +1863,7 @@ class TestSetupDiscovery:
             def perfunction(request, tmpdir):
                 pass
 
-            @pytest.factory()
+            @pytest.fixture()
             def arg1(tmpdir):
                 pass
             @pytest.setup()
@@ -1918,7 +1918,7 @@ class TestSetupDiscovery:
             def enabled(parentnode, markers):
                 return "needsdb" in markers
 
-            @pytest.factory(params=[1,2])
+            @pytest.fixture(params=[1,2])
             def db(request):
                 return request.param
 
@@ -1959,7 +1959,7 @@ class TestSetupManagement:
         testdir.makepyfile("""
             import pytest
             l = []
-            @pytest.factory(scope="module")
+            @pytest.fixture(scope="module")
             def arg():
                 l.append(1)
                 return 0
@@ -1984,7 +1984,7 @@ class TestSetupManagement:
         testdir.makepyfile("""
             import pytest
             l = []
-            @pytest.factory(params=[1,2])
+            @pytest.fixture(params=[1,2])
             def arg(request):
                 return request.param
 
@@ -2010,7 +2010,7 @@ class TestSetupManagement:
 
             l = []
 
-            @pytest.factory(scope="session", params=[1,2])
+            @pytest.fixture(scope="session", params=[1,2])
             def arg(request):
                return request.param
 
@@ -2036,11 +2036,11 @@ class TestSetupManagement:
 
             l = []
 
-            @pytest.factory(scope="function", params=[1,2])
+            @pytest.fixture(scope="function", params=[1,2])
             def farg(request):
                 return request.param
 
-            @pytest.factory(scope="class", params=list("ab"))
+            @pytest.fixture(scope="class", params=list("ab"))
             def carg(request):
                 return request.param
 
@@ -2117,7 +2117,7 @@ class TestFuncargMarker:
     def test_parametrize(self, testdir):
         testdir.makepyfile("""
             import pytest
-            @pytest.factory(params=["a", "b", "c"])
+            @pytest.fixture(params=["a", "b", "c"])
             def arg(request):
                 return request.param
             l = []
@@ -2133,7 +2133,7 @@ class TestFuncargMarker:
         testdir.makepyfile("""
             import pytest
             l = []
-            @pytest.factory(scope="module")
+            @pytest.fixture(scope="module")
             def arg():
                 l.append(1)
                 return 1
@@ -2155,7 +2155,7 @@ class TestFuncargMarker:
         testdir.makepyfile("""
             import pytest
             l = []
-            @pytest.factory(scope="module")
+            @pytest.fixture(scope="module")
             def arg():
                 l.append(1)
                 return 1
@@ -2178,7 +2178,7 @@ class TestFuncargMarker:
             import pytest
             finalized = []
             created = []
-            @pytest.factory(scope="module")
+            @pytest.fixture(scope="module")
             def arg(request):
                 created.append(1)
                 assert request.scope == "module"
@@ -2217,14 +2217,14 @@ class TestFuncargMarker:
             import pytest
             finalized = []
             created = []
-            @pytest.factory(scope="function")
+            @pytest.fixture(scope="function")
             def arg(request):
                 pass
         """)
         testdir.makepyfile(
             test_mod1="""
                 import pytest
-                @pytest.factory(scope="session")
+                @pytest.fixture(scope="session")
                 def arg(request):
                     %s
                 def test_1(arg):
@@ -2239,14 +2239,14 @@ class TestFuncargMarker:
     def test_register_only_with_mark(self, testdir):
         testdir.makeconftest("""
             import pytest
-            @pytest.factory()
+            @pytest.fixture()
             def arg():
                 return 1
         """)
         testdir.makepyfile(
             test_mod1="""
                 import pytest
-                @pytest.factory()
+                @pytest.fixture()
                 def arg(arg):
                     return arg + 1
                 def test_1(arg):
@@ -2258,7 +2258,7 @@ class TestFuncargMarker:
     def test_parametrize_and_scope(self, testdir):
         testdir.makepyfile("""
             import pytest
-            @pytest.factory(scope="module", params=["a", "b", "c"])
+            @pytest.fixture(scope="module", params=["a", "b", "c"])
             def arg(request):
                 return request.param
             l = []
@@ -2276,13 +2276,13 @@ class TestFuncargMarker:
     def test_scope_mismatch(self, testdir):
         testdir.makeconftest("""
             import pytest
-            @pytest.factory(scope="function")
+            @pytest.fixture(scope="function")
             def arg(request):
                 pass
         """)
         testdir.makepyfile("""
             import pytest
-            @pytest.factory(scope="session")
+            @pytest.fixture(scope="session")
             def arg(arg):
                 pass
             def test_mismatch(arg):
@@ -2298,7 +2298,7 @@ class TestFuncargMarker:
         testdir.makepyfile("""
             import pytest
 
-            @pytest.factory(scope="module", params=[1, 2])
+            @pytest.fixture(scope="module", params=[1, 2])
             def arg(request):
                 return request.param
 
@@ -2317,10 +2317,10 @@ class TestFuncargMarker:
         testdir.makeconftest("""
             import pytest
 
-            @pytest.factory(scope="session", params="s1 s2".split())
+            @pytest.fixture(scope="session", params="s1 s2".split())
             def sarg():
                 pass
-            @pytest.factory(scope="module", params="m1 m2".split())
+            @pytest.fixture(scope="module", params="m1 m2".split())
             def marg():
                 pass
         """)
@@ -2365,11 +2365,11 @@ class TestFuncargMarker:
 
             l = []
 
-            @pytest.factory(scope="function", params=[1,2])
+            @pytest.fixture(scope="function", params=[1,2])
             def farg(request):
                 return request.param
 
-            @pytest.factory(scope="class", params=list("ab"))
+            @pytest.fixture(scope="class", params=list("ab"))
             def carg(request):
                 return request.param
 
@@ -2411,14 +2411,14 @@ class TestFuncargMarker:
         testdir.makepyfile("""
             import pytest
 
-            @pytest.factory(scope="function", params=[1, 2])
+            @pytest.fixture(scope="function", params=[1, 2])
             def arg(request):
                 param = request.param
                 request.addfinalizer(lambda: l.append("fin:%s" % param))
                 l.append("create:%s" % param)
                 return request.param
 
-            @pytest.factory(scope="module", params=["mod1", "mod2"])
+            @pytest.fixture(scope="module", params=["mod1", "mod2"])
             def modarg(request):
                 param = request.param
                 request.addfinalizer(lambda: l.append("fin:%s" % param))
@@ -2455,7 +2455,7 @@ class TestFuncargMarker:
         testdir.makepyfile("""
             import pytest
 
-            @pytest.factory(scope="module", params=[1, 2])
+            @pytest.fixture(scope="module", params=[1, 2])
             def arg(request):
                 request.config.l = l # to access from outer
                 x = request.param
@@ -2484,7 +2484,7 @@ class TestFuncargMarker:
         testdir.makepyfile("""
             import pytest
 
-            @pytest.factory(scope="function", params=[1, 2])
+            @pytest.fixture(scope="function", params=[1, 2])
             def arg(request):
                 x = request.param
                 request.addfinalizer(lambda: l.append("fin%s" % x))
@@ -2506,7 +2506,7 @@ class TestFuncargMarker:
         testdir.makepyfile("""
             import pytest
 
-            @pytest.factory(scope="module", params=[1, 2])
+            @pytest.fixture(scope="module", params=[1, 2])
             def arg(request):
                 return request.param
 
@@ -2562,7 +2562,7 @@ class TestTestContextScopeAccess:
     def test_funcarg(self, testdir, scope, ok, error):
         testdir.makepyfile("""
             import pytest
-            @pytest.factory(scope=%r)
+            @pytest.fixture(scope=%r)
             def arg(request):
                 for x in %r:
                     assert hasattr(request, x)
@@ -2582,7 +2582,7 @@ class TestErrors:
     def test_subfactory_missing_funcarg(self, testdir):
         testdir.makepyfile("""
             import pytest
-            @pytest.factory()
+            @pytest.fixture()
             def gen(qwe123):
                 return 1
             def test_something(gen):
@@ -2618,7 +2618,7 @@ class TestTestContextVarious:
     def test_newstyle_with_request(self, testdir):
         testdir.makepyfile("""
             import pytest
-            @pytest.factory()
+            @pytest.fixture()
             def arg(request):
                 pass
             def test_1(arg):
@@ -2630,7 +2630,7 @@ class TestTestContextVarious:
     def test_setupcontext_no_param(self, testdir):
         testdir.makepyfile("""
             import pytest
-            @pytest.factory(params=[1,2])
+            @pytest.fixture(params=[1,2])
             def arg(request):
                 return request.param
 
@@ -2683,7 +2683,7 @@ def test_setup_funcarg_order(testdir):
         @pytest.setup()
         def fix1():
             l.append(1)
-        @pytest.factory()
+        @pytest.fixture()
         def arg1():
             l.append(2)
         def test_hello(arg1):
@@ -2696,10 +2696,10 @@ def test_setup_funcarg_order(testdir):
 def test_request_funcargnames(testdir):
     testdir.makepyfile("""
         import pytest
-        @pytest.factory()
+        @pytest.fixture()
         def arg1():
             pass
-        @pytest.factory()
+        @pytest.fixture()
         def farg(arg1):
             pass
         @pytest.setup()