diff --git a/CHANGELOG b/CHANGELOG
index 939214f1b..9310172e5 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -1,6 +1,10 @@
 Changes between 1.0.0 and 1.0.1
 =====================================
 
+* added a 'pytest_nose' plugin which handles nose.SkipTest, 
+  nose-style function/method/generator setup/teardown and 
+  tries to report functions correctly. 
+
 * unicode fixes: capturing and unicode writes to sys.stdout 
   (through e.g a print statement) now work within tests, 
   they are encoded as "utf8" by default, also terminalwriting 
diff --git a/doc/test/plugin/nose.txt b/doc/test/plugin/nose.txt
new file mode 100644
index 000000000..1f5775a11
--- /dev/null
+++ b/doc/test/plugin/nose.txt
@@ -0,0 +1,64 @@
+
+pytest_nose plugin
+==================
+
+nose-compatibility plugin: allow to run nose test suites natively.
+
+.. contents::
+  :local:
+
+This is an experimental plugin for allowing to run tests written 
+in the 'nosetests' style with py.test.  
+nosetests is a popular clone 
+of py.test and thus shares some philosophy.  This plugin is an 
+attempt to understand and neutralize differences.  It allows to 
+run nosetests' own test suite and a number of other test suites 
+without problems. 
+
+Usage
+-------------
+
+If you type::
+
+    py.test -p nose 
+
+where you would type ``nosetests``, you can run your nose style tests.  
+You might also try to run without the nose plugin to see where your test
+suite is incompatible to the default py.test. 
+
+To avoid the need for specifying a command line option you can set an environment 
+variable::
+
+    PYTEST_PLUGINS=nose  
+
+or create a ``conftest.py`` file in your test directory or below::
+
+    # conftest.py 
+    pytest_plugins = "nose", 
+
+If you find issues or have suggestions you may run:: 
+
+    py.test -p nose --pastebin=all 
+
+to create a URL of a test run session and send it with comments to the issue
+tracker or mailing list. 
+
+Known issues 
+------------------
+
+- nose-style doctests are not collected and executed correctly,
+  also fixtures don't work.
+
+Start improving this plugin in 30 seconds
+=========================================
+
+
+Do you find the above documentation or the plugin itself lacking? 
+
+1. Download `pytest_nose.py`_ plugin source code 
+2. put it somewhere as ``pytest_nose.py`` into your import path 
+3. a subsequent ``py.test`` run will use your local version
+
+Further information: extend_ documentation, other plugins_ or contact_.  
+
+.. include:: links.txt
diff --git a/makepluginlist.py b/makepluginlist.py
index d220238a9..c4bf6f2ba 100644
--- a/makepluginlist.py
+++ b/makepluginlist.py
@@ -7,7 +7,7 @@ plugins = [
     ('Plugins related to Python test functions and programs', 
             'xfail figleaf monkeypatch capture recwarn',),
     ('Plugins for other testing styles and languages', 
-            'unittest doctest oejskit restdoc'),
+            'oejskit unittest nose doctest restdoc'),
     ('Plugins for generic reporting and failure logging', 
             'pastebin resultlog terminal',),
     ('internal plugins / core functionality', 
diff --git a/py/test/collect.py b/py/test/collect.py
index 8a2e9467b..722f8e0c8 100644
--- a/py/test/collect.py
+++ b/py/test/collect.py
@@ -395,7 +395,12 @@ class Directory(FSCollector):
 
     def _ignore(self, path):
         ignore_paths = self.config.getconftest_pathlist("collect_ignore", path=path)
-        return ignore_paths and path in ignore_paths 
+        return ignore_paths and path in ignore_paths
+        # XXX more refined would be: 
+        if ignore_paths:
+            for p in ignore_paths:
+                if path == p or path.relto(p):
+                    return True
 
     def consider(self, path):
         if self._ignore(path):
diff --git a/py/test/plugin/conftest.py b/py/test/plugin/conftest.py
index a4542a643..93d239708 100644
--- a/py/test/plugin/conftest.py
+++ b/py/test/plugin/conftest.py
@@ -15,10 +15,15 @@ def pytest_funcarg__testdir(request):
     #        testdir.plugins.append(obj.testplugin)
     #        break
     #else:
-    basename = request.module.__name__.split(".")[-1] 
-    if basename.startswith("pytest_"):
+    modname = request.module.__name__.split(".")[-1] 
+    if modname.startswith("pytest_"):
         testdir.plugins.append(vars(request.module))
-        testdir.plugins.append(basename) 
+        testdir.plugins.append(modname) 
+    #elif modname.startswith("test_pytest"):
+    #    pname = modname[5:]
+    #    assert pname not in testdir.plugins
+    #    testdir.plugins.append(pname) 
+    #    #testdir.plugins.append(vars(request.module))
     else:
         pass # raise ValueError("need better support code")
     return testdir
diff --git a/py/test/plugin/pytest_nose.py b/py/test/plugin/pytest_nose.py
new file mode 100644
index 000000000..c77b01f08
--- /dev/null
+++ b/py/test/plugin/pytest_nose.py
@@ -0,0 +1,97 @@
+"""nose-compatibility plugin: allow to run nose test suites natively. 
+
+This is an experimental plugin for allowing to run tests written 
+in the 'nosetests' style with py.test.  
+nosetests is a popular clone 
+of py.test and thus shares some philosophy.  This plugin is an 
+attempt to understand and neutralize differences.  It allows to 
+run nosetests' own test suite and a number of other test suites 
+without problems. 
+
+Usage
+-------------
+
+If you type::
+
+    py.test -p nose 
+
+where you would type ``nosetests``, you can run your nose style tests.  
+You might also try to run without the nose plugin to see where your test
+suite is incompatible to the default py.test. 
+
+To avoid the need for specifying a command line option you can set an environment 
+variable::
+
+    PYTEST_PLUGINS=nose  
+
+or create a ``conftest.py`` file in your test directory or below::
+
+    # conftest.py 
+    pytest_plugins = "nose", 
+
+If you find issues or have suggestions you may run:: 
+
+    py.test -p nose --pastebin=all 
+
+to create a URL of a test run session and send it with comments to the issue
+tracker or mailing list. 
+
+Known issues 
+------------------
+
+- nose-style doctests are not collected and executed correctly,
+  also fixtures don't work. 
+
+"""
+import py
+import inspect
+import sys
+
+def pytest_runtest_makereport(__call__, item, call):
+    SkipTest = getattr(sys.modules.get('nose', None), 'SkipTest', None)
+    if SkipTest:
+        if call.excinfo and call.excinfo.errisinstance(SkipTest):
+            # let's substitute the excinfo with a py.test.skip one 
+            call2 = call.__class__(lambda: py.test.skip(str(call.excinfo.value)), call.when)
+            call.excinfo = call2.excinfo 
+
+def pytest_report_iteminfo(item):
+    # nose 0.11.1 uses decorators for "raises" and other helpers. 
+    # for reporting progress by filename we fish for the filename 
+    if isinstance(item, py.test.collect.Function):
+        obj = item.obj
+        if hasattr(obj, 'compat_co_firstlineno'):
+            fn = sys.modules[obj.__module__].__file__ 
+            if fn.endswith(".pyc"):
+                fn = fn[:-1]
+            #assert 0
+            #fn = inspect.getsourcefile(obj) or inspect.getfile(obj)
+            lineno = obj.compat_co_firstlineno    
+            return py.path.local(fn), lineno, obj.__module__
+    
+def pytest_runtest_setup(item):
+    if isinstance(item, (py.test.collect.Function)):
+        if isinstance(item.parent, py.test.collect.Generator):
+            gen = item.parent 
+            if not hasattr(gen, '_nosegensetup'):
+                call_optional(gen.obj, 'setup')
+                if isinstance(gen.parent, py.test.collect.Instance):
+                    call_optional(gen.parent.obj, 'setup')
+                gen._nosegensetup = True
+        call_optional(item.obj, 'setup')
+
+def pytest_runtest_teardown(item):
+    if isinstance(item, py.test.collect.Function):
+        call_optional(item.obj, 'teardown')
+        #if hasattr(item.parent, '_nosegensetup'):
+        #    #call_optional(item._nosegensetup, 'teardown')
+        #    del item.parent._nosegensetup
+
+def pytest_make_collect_report(collector):
+    if isinstance(collector, py.test.collect.Generator):
+        call_optional(collector.obj, 'setup')
+
+def call_optional(obj, name):
+    method = getattr(obj, name, None)
+    if method:
+        method()
diff --git a/py/test/plugin/pytest_terminal.py b/py/test/plugin/pytest_terminal.py
index 158204b1e..c2f83c124 100644
--- a/py/test/plugin/pytest_terminal.py
+++ b/py/test/plugin/pytest_terminal.py
@@ -241,15 +241,10 @@ class TerminalReporter:
         if self.config.option.traceconfig:
             plugins = []
             for plugin in self.config.pluginmanager.comregistry:
-                name = plugin.__class__.__name__
-                if name.endswith("Plugin"):
-                    name = name[:-6]
-                    #if name == "Conftest":
-                    #    XXX get filename 
-                    plugins.append(name)
-                else:
-                    plugins.append(str(plugin))
-
+                name = getattr(plugin, '__name__', None)
+                if name is None:
+                    name = plugin.__class__.__name__
+                plugins.append(name)
             plugins = ", ".join(plugins) 
             self.write_line("active plugins: %s" %(plugins,))
         for i, testarg in py.builtin.enumerate(self.config.args):
diff --git a/py/test/plugin/pytest_unittest.py b/py/test/plugin/pytest_unittest.py
index 6e17a1c77..1340cae99 100644
--- a/py/test/plugin/pytest_unittest.py
+++ b/py/test/plugin/pytest_unittest.py
@@ -55,6 +55,9 @@ class UnitTestFunction(py.test.collect.Function):
         if obj is not _dummy:
             self._obj = obj
         self._sort_value = sort_value
+        if hasattr(self.parent, 'newinstance'):
+            self.parent.newinstance()
+            self.obj = self._getobj()
 
     def runtest(self):
         target = self.obj
@@ -87,7 +90,6 @@ def test_simple_unittest(testdir):
 def test_setup(testdir):
     testpath = testdir.makepyfile(test_two="""
         import unittest
-        pytest_plugins = "pytest_unittest" # XXX 
         class MyTestCase(unittest.TestCase):
             def setUp(self):
                 self.foo = 1
@@ -98,6 +100,18 @@ def test_setup(testdir):
     rep = reprec.matchreport("test_setUp")
     assert rep.passed
 
+def test_new_instances(testdir):
+    testpath = testdir.makepyfile("""
+        import unittest
+        class MyTestCase(unittest.TestCase):
+            def test_func1(self):
+                self.x = 2
+            def test_func2(self):
+                assert not hasattr(self, 'x')
+    """)
+    reprec = testdir.inline_run(testpath)
+    reprec.assertoutcome(passed=2)
+
 def test_teardown(testdir):
     testpath = testdir.makepyfile(test_three="""
         import unittest
diff --git a/py/test/plugin/test_pytest_nose.py b/py/test/plugin/test_pytest_nose.py
new file mode 100644
index 000000000..4950095dd
--- /dev/null
+++ b/py/test/plugin/test_pytest_nose.py
@@ -0,0 +1,87 @@
+import py
+py.test.importorskip("nose")
+
+def test_nose_setup(testdir):
+    p = testdir.makepyfile("""
+        l = []
+
+        def test_hello():
+            assert l == [1]
+        def test_world():
+            assert l == [1,2]
+        test_hello.setup = lambda: l.append(1)
+        test_hello.teardown = lambda: l.append(2)
+    """)
+    result = testdir.runpytest(p, '-p', 'nose')
+    result.stdout.fnmatch_lines([
+        "*2 passed*"
+    ])
+
+def test_nose_test_generator_fixtures(testdir):
+    p = testdir.makepyfile("""
+        # taken from nose-0.11.1 unit_tests/test_generator_fixtures.py
+        from nose.tools import eq_
+        called = []
+
+        def outer_setup():
+            called.append('outer_setup')
+
+        def outer_teardown():
+            called.append('outer_teardown')
+
+        def inner_setup():
+            called.append('inner_setup')
+
+        def inner_teardown():
+            called.append('inner_teardown')
+
+        def test_gen():
+            called[:] = []
+            for i in range(0, 5):
+                yield check, i
+                
+        def check(i):
+            expect = ['outer_setup']
+            for x in range(0, i):
+                expect.append('inner_setup')
+                expect.append('inner_teardown')
+            expect.append('inner_setup')
+            eq_(called, expect)
+
+            
+        test_gen.setup = outer_setup
+        test_gen.teardown = outer_teardown
+        check.setup = inner_setup
+        check.teardown = inner_teardown
+
+        class TestClass(object):
+            def setup(self):
+                print "setup called in", self
+                self.called = ['setup']
+
+            def teardown(self):
+                print "teardown called in", self
+                eq_(self.called, ['setup'])
+                self.called.append('teardown')
+
+            def test(self):
+                print "test called in", self
+                for i in range(0, 5):
+                    yield self.check, i
+
+            def check(self, i):
+                print "check called in", self
+                expect = ['setup']
+                #for x in range(0, i):
+                #    expect.append('setup')
+                #    expect.append('teardown')
+                #expect.append('setup')
+                eq_(self.called, expect)
+
+    """)
+    result = testdir.runpytest(p, '-p', 'nose')
+    result.stdout.fnmatch_lines([
+        "*10 passed*"
+    ])
+
+