diff --git a/tests/util/test_package.py b/tests/util/test_package.py
new file mode 100644
index 00000000000..1ffd66e1bb4
--- /dev/null
+++ b/tests/util/test_package.py
@@ -0,0 +1,58 @@
+"""
+Tests Home Assistant package util methods.
+"""
+import unittest
+import sys
+import tempfile
+import homeassistant.util.package as package
+
+TEST_EXIST_REQ = "pip>=7.0.0"
+TEST_NEW_REQ = "pyhelloworld3==1.0.0"
+TEST_ZIP_REQ = \
+    "https://github.com/rmkraus/pyhelloworld3/archive/" \
+    "5ba878316d68ea164e2cf5bd085d0cf1fd76bd15.zip#pyhelloworld3==1.0.0"
+
+
+class TestPackageUtil(unittest.TestCase):
+    """ Tests for homeassistant.util.package module """
+
+    def setUp(self):
+        """ Create local library for testing """
+        self.lib_dir = tempfile.TemporaryDirectory()
+
+    def tearDown(self):
+        """ Remove local library """
+        del self.lib_dir
+
+    def test_install_existing_package(self):
+        """ Test an install attempt on an existing package """
+        self.assertTrue(package.check_package_exists(
+            TEST_EXIST_REQ, self.lib_dir.name))
+
+        self.assertTrue(package.install_package(TEST_EXIST_REQ))
+
+    def test_install_package_locally(self):
+        """ Test an install attempt to the local library """
+        self.assertFalse(package.check_package_exists(
+            TEST_NEW_REQ, self.lib_dir.name))
+
+        self.assertTrue(package.install_package(
+            TEST_NEW_REQ, True, self.lib_dir.name))
+
+        sys.path.insert(0, self.lib_dir.name)
+        import pyhelloworld3
+
+        self.assertEqual(pyhelloworld3.__version__, '1.0.0')
+
+    def test_install_package_zip(self):
+        """ Test an install attempt from a zip path """
+        self.assertFalse(package.check_package_exists(
+            TEST_ZIP_REQ, self.lib_dir.name))
+
+        self.assertTrue(package.install_package(
+            TEST_ZIP_REQ, True, self.lib_dir.name))
+
+        sys.path.insert(0, self.lib_dir.name)
+        import pyhelloworld3
+
+        self.assertEqual(pyhelloworld3.__version__, '1.0.0')