diff --git a/changelog.d/1420.change.rst b/changelog.d/1420.change.rst
new file mode 100644
index 0000000000..6967adccb0
--- /dev/null
+++ b/changelog.d/1420.change.rst
@@ -0,0 +1 @@
+Add find_namespace: directive to config parser
diff --git a/docs/setuptools.txt b/docs/setuptools.txt
index 0660e14d5d..f3e31b831f 100644
--- a/docs/setuptools.txt
+++ b/docs/setuptools.txt
@@ -2389,8 +2389,8 @@ Metadata and options are set in the config sections of the same name.
 * In some cases, complex values can be provided in dedicated subsections for
   clarity.
 
-* Some keys allow ``file:``, ``attr:``, and ``find:`` directives in order to
-  cover common usecases.
+* Some keys allow ``file:``, ``attr:``, and ``find:`` and ``find_namespace:`` directives in
+  order to cover common usecases.
 
 * Unknown keys are ignored.
 
@@ -2479,7 +2479,7 @@ eager_resources          list-comma
 dependency_links         list-comma
 tests_require            list-semi
 include_package_data     bool
-packages                 find:, list-comma
+packages                 find:, find_namespace:, list-comma
 package_dir              dict
 package_data             section
 exclude_package_data     section
@@ -2489,10 +2489,13 @@ py_modules               list-comma
 
 .. note::
 
-    **packages** - The ``find:`` directive can be further configured
+    **packages** - The ``find:`` and ``find_namespace:`` directive can be further configured
     in a dedicated subsection ``options.packages.find``. This subsection
-    accepts the same keys as the `setuptools.find` function:
+    accepts the same keys as the `setuptools.find_packages` and the
+    `setuptools.find_packages_ns` function:
     ``where``, ``include``, and ``exclude``.
+    
+    **find_namespace directive** - The ``find_namespace:`` directive is supported since Python >=3.3.
 
 
 Configuration API
diff --git a/setuptools/config.py b/setuptools/config.py
index 5f908cf129..23ca20d537 100644
--- a/setuptools/config.py
+++ b/setuptools/config.py
@@ -8,7 +8,7 @@
 
 from distutils.errors import DistutilsOptionError, DistutilsFileError
 from setuptools.extern.packaging.version import LegacyVersion, parse
-from setuptools.extern.six import string_types
+from setuptools.extern.six import string_types, PY3
 
 
 __metaclass__ = type
@@ -515,16 +515,24 @@ def _parse_packages(self, value):
         :param value:
         :rtype: list
         """
-        find_directive = 'find:'
+        find_directives = ['find:', 'find_namespace:']
+        trimmed_value = value.strip()
 
-        if not value.startswith(find_directive):
+        if not trimmed_value in find_directives:
             return self._parse_list(value)
 
+        findns = trimmed_value == find_directives[1]
+        if findns and not PY3:
+            raise DistutilsOptionError('find_namespace: directive is unsupported on Python < 3.3')
+
         # Read function arguments from a dedicated section.
         find_kwargs = self.parse_section_packages__find(
             self.sections.get('packages.find', {}))
 
-        from setuptools import find_packages
+        if findns:
+            from setuptools import find_packages_ns as find_packages
+        else:
+            from setuptools import find_packages
 
         return find_packages(**find_kwargs)
 
diff --git a/setuptools/tests/__init__.py b/setuptools/tests/__init__.py
index 54dd7d2b20..5f4a1c2958 100644
--- a/setuptools/tests/__init__.py
+++ b/setuptools/tests/__init__.py
@@ -2,5 +2,17 @@
 
 import pytest
 
+from setuptools.extern.six import PY2, PY3
+
+
+__all__ = [
+  'fail_on_ascii', 'py2_only', 'py3_only'
+]
+
+
 is_ascii = locale.getpreferredencoding() == 'ANSI_X3.4-1968'
 fail_on_ascii = pytest.mark.xfail(is_ascii, reason="Test fails in this locale")
+
+
+py2_only = pytest.mark.skipif(not PY2, reason="Test runs on Python 2 only")
+py3_only = pytest.mark.skipif(not PY3, reason="Test runs on Python 3 only")
diff --git a/setuptools/tests/test_config.py b/setuptools/tests/test_config.py
index 19b3763363..9a4c83906b 100644
--- a/setuptools/tests/test_config.py
+++ b/setuptools/tests/test_config.py
@@ -4,18 +4,20 @@
 from mock import patch
 from setuptools.dist import Distribution, _Distribution
 from setuptools.config import ConfigHandler, read_configuration
-
+from setuptools.tests import py2_only, py3_only
 
 class ErrConfigHandler(ConfigHandler):
     """Erroneous handler. Fails to implement required methods."""
 
 
-def make_package_dir(name, base_dir):
+def make_package_dir(name, base_dir, ns=False):
     dir_package = base_dir
     for dir_name in name.split('/'):
         dir_package = dir_package.mkdir(dir_name)
-    init_file = dir_package.join('__init__.py')
-    init_file.write('')
+    init_file = None
+    if not ns:
+      init_file = dir_package.join('__init__.py')
+      init_file.write('')
     return dir_package, init_file
 
 
@@ -596,6 +598,60 @@ def test_find_directive(self, tmpdir):
             assert set(dist.packages) == set(
                 ['fake_package',  'fake_package.sub_two'])
 
+    @py2_only
+    def test_find_namespace_directive_fails_on_py2(self, tmpdir):
+        dir_package, config = fake_env(
+            tmpdir,
+            '[options]\n'
+            'packages = find_namespace:\n'
+        )
+
+        with pytest.raises(DistutilsOptionError):
+            with get_dist(tmpdir) as dist:
+                dist.parse_config_files()
+
+    @py3_only
+    def test_find_namespace_directive(self, tmpdir):
+        dir_package, config = fake_env(
+            tmpdir,
+            '[options]\n'
+            'packages = find_namespace:\n'
+        )
+
+        dir_sub_one, _ = make_package_dir('sub_one', dir_package)
+        dir_sub_two, _ = make_package_dir('sub_two', dir_package, ns=True)
+
+        with get_dist(tmpdir) as dist:
+            assert set(dist.packages) == { 
+                'fake_package', 'fake_package.sub_two', 'fake_package.sub_one'
+            }
+
+        config.write(
+            '[options]\n'
+            'packages = find_namespace:\n'
+            '\n'
+            '[options.packages.find]\n'
+            'where = .\n'
+            'include =\n'
+            '    fake_package.sub_one\n'
+            '    two\n'
+        )
+        with get_dist(tmpdir) as dist:
+            assert dist.packages == ['fake_package.sub_one']
+
+        config.write(
+            '[options]\n'
+            'packages = find_namespace:\n'
+            '\n'
+            '[options.packages.find]\n'
+            'exclude =\n'
+            '    fake_package.sub_one\n'
+        )
+        with get_dist(tmpdir) as dist:
+            assert set(dist.packages) == {
+                'fake_package',  'fake_package.sub_two'
+            }
+
     def test_extras_require(self, tmpdir):
         fake_env(
             tmpdir,
diff --git a/setuptools/tests/test_find_packages.py b/setuptools/tests/test_find_packages.py
index 02ae5a946d..f6e75053a7 100644
--- a/setuptools/tests/test_find_packages.py
+++ b/setuptools/tests/test_find_packages.py
@@ -7,10 +7,10 @@
 
 import pytest
 
+from setuptools.tests import py3_only
+
 from setuptools.extern.six import PY3
 from setuptools import find_packages
-
-py3_only = pytest.mark.xfail(not PY3, reason="Test runs on Python 3 only")
 if PY3:
   from setuptools import find_packages_ns