Code for http://alexmic.net/flask-sqlalchemy-pytest/

conftest.py

import os
import pytest

from alembic.command import upgrade
from alembic.config import Config

from project.factory import create_app
from project.database import db as _db


TESTDB = 'test_project.db'
TESTDB_PATH = "/opt/project/data/{}".format(TESTDB)
TEST_DATABASE_URI = 'sqlite:///' + TESTDB_PATH


ALEMBIC_CONFIG = '/opt/project/alembic.ini'


@pytest.fixture(scope='session')
def app(request):
    """Session-wide test `Flask` application."""
    settings_override = {
        'TESTING': True,
        'SQLALCHEMY_DATABASE_URI': TEST_DATABASE_URI
    }
    app = create_app(__name__, settings_override)

    # Establish an application context before running the tests.
    ctx = app.app_context()
    ctx.push()

    def teardown():
        ctx.pop()

    request.addfinalizer(teardown)
    return app


def apply_migrations():
    """Applies all alembic migrations."""
    config = Config(ALEMBIC_CONFIG)
    upgrade(config, 'head')


@pytest.fixture(scope='session')
def db(app, request):
    """Session-wide test database."""
    if os.path.exists(TESTDB_PATH):
        os.unlink(TESTDB_PATH)

    def teardown():
        _db.drop_all()
        os.unlink(TESTDB_PATH)

    _db.app = app
    apply_migrations()

    request.addfinalizer(teardown)
    return _db


@pytest.fixture(scope='function')
def session(db, request):
    """Creates a new database session for a test."""
    connection = db.engine.connect()
    transaction = connection.begin()

    options = dict(bind=connection, binds={})
    session = db.create_scoped_session(options=options)
    
    db.session = session

    def teardown():
        transaction.rollback()
        connection.close()
        session.remove()

    request.addfinalizer(teardown)
    return session

database.py

from flask.ext.sqlalchemy import SQLAlchemy, SignallingSession, SessionBase


class _SignallingSession(SignallingSession):
    """A subclass of `SignallingSession` that allows for `binds` to be specified
    in the `options` keyword arguments.

    """
    def __init__(self, db, autocommit=False, autoflush=True, **options):
        self.app = db.get_app()
        self._model_changes = {}
        self.emit_modification_signals = \
            self.app.config['SQLALCHEMY_TRACK_MODIFICATIONS']

        bind = options.pop('bind', None)
        if bind is None:
            bind = db.engine

        binds = options.pop('binds', None)
        if binds is None:
            binds = db.get_binds(self.app)

        SessionBase.__init__(self,
                             autocommit=autocommit,
                             autoflush=autoflush,
                             bind=bind,
                             binds=binds,
                             **options)


class _SQLAlchemy(SQLAlchemy):
    """A subclass of `SQLAlchemy` that uses `_SignallingSession`."""
    def create_session(self, options):
        return _SignallingSession(self, **options)


db = _SQLAlchemy()

This one is gold! Cleared up so much for me, thanks!