setup(
  name="project",
  packages=[''],
  include_package_data=True,
  exclude_package_data={'': ['tests']},
  test_suite='nose.collector',
)

setup(
   name="project",
   packages=find_packages(exclude=("tests",)),
   include_package_data=True,
   test_suite='nose.collector',
)

from setuptools import setup, find_packages
...
packages = find_packages(exclude=["*.tests", "*.tests.*", "tests.*", "tests"]),

packages = find_packages(exclude=["tests.*", "tests"]),

setup(name='pyfoo',
      version="1.0.2",
      description='Example for stack overflow',
      url='http://stackoverflow.com/',
      author='David Michael Pennington',
      author_email='mike /|at| pennington.net',
      license='GPL',
      platforms='any',
      keywords='Stack Overflow Example',
      entry_points = "",
      long_description=read('README.rst'),
      include_package_data=True,  # Checks MANIFEST.in for explicit rules
      #                    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
      packages=find_packages(),
      use_2to3=True,
      zip_safe=False,
      setup_requires=["setuptools_hg"],

include LICENSE CHANGES README.rst requirements.txt
recursive-exclude * __pycache__
recursive-exclude * *.pyc
recursive-exclude * *.pyo
recursive-exclude * *.orig

prune doc*

prune tests*

from setuptools import setup, find_packages
...
packages = find_packages(exclude=['tests']),
data_files = os.walk(path_to_files),