diff --git a/.circleci/config.yml b/.circleci/config.yml
index 1df5f8f80d6cc..62554531bd918 100644
--- a/.circleci/config.yml
+++ b/.circleci/config.yml
@@ -99,7 +99,7 @@ jobs:
             SQS_PROVIDER: "elasticmq"
             TEST_PATH: "tests/integration/test_sns.py -k test_publish_sqs_from_sns_with_xray_propagation"
             PYTEST_ARGS: "--junitxml=target/reports/elasticmq.xml -o junit_suite_name='elasticmq'"
-          command:  make test
+          command: make test
       - store_test_results:
           path: target/reports/
 
@@ -128,7 +128,14 @@ jobs:
             [[ "$cid" != "" ]] || { echo "could not create build container"; exit 1; }
 
             docker cp ${cid}:/opt/code/localstack/target/test-report.xml target/reports || true
-            docker cp ${cid}:/opt/code/localstack/.coverage target/ || true
+            docker cp ${cid}:/opt/code/localstack/.coverage ./ || true
+          when: always
+      - run:
+          name: Report coverage statistics
+          command: |
+            source .venv/bin/activate
+            coverage report || true
+            coveralls || true
           when: always
       - run:
           command: |
@@ -147,6 +154,8 @@ jobs:
     machine:
       image: ubuntu-2004:202101-01
     working_directory: /tmp/workspace/repo
+    environment:
+      COVERALLS_REPO_TOKEN: D9Tg4c2TGmHUBQIWbixm9NtIosNUDJeRo
     steps:
       - attach_workspace:
           at: /tmp/workspace
@@ -157,6 +166,7 @@ jobs:
           name: Push docker image
           command: make docker-push-master
 
+
 workflows:
   main:
     jobs:
diff --git a/.coveragerc b/.coveragerc
new file mode 100644
index 0000000000000..4edd7b1a20b22
--- /dev/null
+++ b/.coveragerc
@@ -0,0 +1,2 @@
+[run]
+relative_files = True
diff --git a/.coveralls.yml b/.coveralls.yml
index 31b64e137d0cc..8769460ed0047 100644
--- a/.coveralls.yml
+++ b/.coveralls.yml
@@ -1,2 +1,2 @@
-service_name: travis-ci
+service_name: circleci
 repo_token: D9Tg4c2TGmHUBQIWbixm9NtIosNUDJeRo
diff --git a/Dockerfile b/Dockerfile
index 2fb022a16cd6e..f0bb16c1981af 100644
--- a/Dockerfile
+++ b/Dockerfile
@@ -95,11 +95,12 @@ RUN ES_BASE_DIR=localstack/infra/elasticsearch; \
 
 # run tests (to verify the build before pushing the image)
 ADD tests/ tests/
+ADD .coveragerc ./
 # fixes a dependency issue with pytest and python3.7 https://github.com/pytest-dev/pytest/issues/5594
 RUN pip uninstall -y argparse
 RUN LAMBDA_EXECUTOR=local \
     PYTEST_ARGS='--junitxml=target/test-report.xml' \
-    make test
+    make test-coverage
 
 # clean up temporary files created during test execution
 RUN apk del --purge git cmake gcc musl-dev libc-dev; \
diff --git a/Makefile b/Makefile
index 62a96e5c882bc..be9daa7bb9f70 100644
--- a/Makefile
+++ b/Makefile
@@ -149,6 +149,12 @@ test:
 	make lint && \
 		($(VENV_RUN); DEBUG=$(DEBUG) pytest --durations=10 --log-cli-level=$(PYTEST_LOGLEVEL) -s $(PYTEST_ARGS) $(TEST_PATH))
 
+test-coverage:
+	($(VENV_RUN); coverage --version; \
+		DEBUG=$(DEBUG) \
+		coverage run --source=localstack/ --omit=localstack/infra/,localstack/node_modules/ \
+		-m pytest --durations=10 --log-cli-level=$(PYTEST_LOGLEVEL) -s $(PYTEST_ARGS) $(TEST_PATH))
+
 test-docker:
 	ENTRYPOINT="--entrypoint=" CMD="make test" make docker-run
 
@@ -196,4 +202,4 @@ clean:             ## Clean up (npm dependencies, downloaded infrastructure code
 	rm -rf $(VENV_DIR)
 	rm -f localstack/utils/kinesis/java/com/atlassian/*.class
 
-.PHONY: usage compile clean install web install-web infra test
+.PHONY: usage compile clean install web install-web infra test test-coverage
diff --git a/requirements.txt b/requirements.txt
index 0290ae6bd98d2..87a16ce0eaeac 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -18,7 +18,9 @@ boto3>=1.14.33                 #basic-lib
 botocore>=1.12.13
 cachetools>=3.1.1,<4.0.0
 cbor2>=5.2.0
-#coverage>=5.2.1
+# coverage version should be synced with bin/Dockerfile.base
+coverage>=5.5
+coveralls==3.1.0
 crontab>=0.22.6
 # pin version to avoid Rust build issues: https://github.com/pyca/cryptography/issues/5771
 cryptography<3.4
@@ -43,9 +45,7 @@ psutil>=5.4.8,<6.0.0
 pympler>=0.6
 pyopenssl==17.5.0
 pytest==6.2.4
-#pytest-cov==2.12.1
 pytest-rerunfailures==10.0
-#python-coveralls>=2.9.1
 pyyaml>=5.1                    #basic-lib
 Quart>=0.6.15
 requests>=2.20.0               #basic-lib