Virtualenv

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Tool for working with your Python packages in isolation:

Docs: http://www.virtualenv.org/
Development: https://github.com/pypa/virtualenv

There is also virtualenvwrapper that extends virtualenv to make it easier to work with multiple virtualenvs:

Docs: http://www.doughellmann.com/projects/virtualenvwrapper/
Development: https://bitbucket.org/dhellmann/virtualenvwrapper

The ability is also included in Python 3.3 through PEP 405.