diff --git a/.gitignore b/.gitignore
index 0e42b11ff..3b7ec9fac 100644
--- a/.gitignore
+++ b/.gitignore
@@ -18,6 +18,9 @@ include/
 *~
 .hypothesis/
 
+# autogenerated
+_pytest/_version.py
+# setuptools
 .eggs/
 
 doc/*/_build
diff --git a/HOWTORELEASE.rst b/HOWTORELEASE.rst
index 372ecf7f1..523ed41cc 100644
--- a/HOWTORELEASE.rst
+++ b/HOWTORELEASE.rst
@@ -3,11 +3,9 @@ How to release pytest
 
 Note: this assumes you have already registered on pypi.
 
-1. Bump version numbers in ``_pytest/__init__.py`` (``setup.py`` reads it).
+1. Check and finalize ``CHANGELOG.rst``.
 
-2. Check and finalize ``CHANGELOG.rst``.
-
-3. Write ``doc/en/announce/release-VERSION.txt`` and include
+2. Write ``doc/en/announce/release-VERSION.txt`` and include
    it in ``doc/en/announce/index.txt``. Run this command to list names of authors involved::
 
         git log $(git describe --abbrev=0 --tags)..HEAD --format='%aN' | sort -u
@@ -81,5 +79,3 @@ Note: this assumes you have already registered on pypi.
         9. Push ``master`` and ``features``.
 
   c. **major release (3.0.0)**: same steps as that of a **minor release**
-
-
diff --git a/_pytest/__init__.py b/_pytest/__init__.py
index 0a37f23b2..a6f201091 100644
--- a/_pytest/__init__.py
+++ b/_pytest/__init__.py
@@ -1,2 +1,5 @@
-#
-__version__ = '3.1.0.dev0'
+__all__ = ['__version__']
+try:
+    from ._version import version as __version__
+except ImportError:
+    __version__ = None  # broken installation, we don't even try
diff --git a/setup.py b/setup.py
index 1d0630cd2..3cba379e4 100644
--- a/setup.py
+++ b/setup.py
@@ -18,15 +18,6 @@ classifiers = ['Development Status :: 6 - Mature',
 with open('README.rst') as fd:
     long_description = fd.read()
 
-def get_version():
-    p = os.path.join(os.path.dirname(
-                     os.path.abspath(__file__)), "_pytest", "__init__.py")
-    with open(p) as f:
-        for line in f.readlines():
-            if "__version__" in line:
-                return line.strip().split("=")[-1].strip(" '")
-    raise ValueError("could not read version")
-
 
 def has_environment_marker_support():
     """
@@ -63,7 +54,9 @@ def main():
         name='pytest',
         description='pytest: simple powerful testing with Python',
         long_description=long_description,
-        version=get_version(),
+        use_scm_version={
+            'write_to': '_pytest/_version.py',
+        },
         url='http://pytest.org',
         license='MIT license',
         platforms=['unix', 'linux', 'osx', 'cygwin', 'win32'],
@@ -74,6 +67,7 @@ def main():
         keywords="test unittest",
         cmdclass={'test': PyTest},
         # the following should be enabled for release
+        setup_requires=['setuptools-scm'],
         install_requires=install_requires,
         extras_require=extras_require,
         packages=['_pytest', '_pytest.assertion', '_pytest._code', '_pytest.vendored_packages'],