diff --git a/Doc/library/runpy.rst b/Doc/library/runpy.rst
index cfaab94..202f4e1 100644
--- a/Doc/library/runpy.rst
+++ b/Doc/library/runpy.rst
@@ -28,17 +28,22 @@
    mechanism (refer to PEP 302 for details) and then executed in a fresh module
    namespace.
 
+   If the supplied module name refers to a package rather than a normal module,
+   then that package is imported and the ``__main__`` submodule within that
+   package is then executed and the resulting module globals dictionary returned.
+
    The optional dictionary argument *init_globals* may be used to pre-populate the
    globals dictionary before the code is executed. The supplied dictionary will not
    be modified. If any of the special global variables below are defined in the
    supplied dictionary, those definitions are overridden by the ``run_module``
    function.
 
-   The special global variables ``__name__``, ``__file__``, ``__loader__`` and
-   ``__builtins__`` are set in the globals dictionary before the module code is
-   executed.
+   The special global variables ``__name__``, ``__file__``, ``__loader__``,
+   ``__builtins__`` and ``__package__`` are set in the globals dictionary before
+   the module code is executed.
 
-   ``__name__`` is set to *run_name* if this optional argument is supplied, and the
+   ``__name__`` is set to *run_name* if this optional argument is supplied, to
+   ``mod_name + '.__main__'`` if the named module is a package and to the
    *mod_name* argument otherwise.
 
    ``__loader__`` is set to the PEP 302 module loader used to retrieve the code for
@@ -50,6 +55,9 @@
    ``__builtins__`` is automatically initialised with a reference to the top level
    namespace of the :mod:`__builtin__` module.
 
+   ``__package__`` is set to *mod_name* if the named module is a package and to
+   ``mod_name.rpartition('.')[0]`` otherwise.
+
    If the argument *alter_sys* is supplied and evaluates to ``True``, then
    ``sys.argv[0]`` is updated with the value of ``__file__`` and
    ``sys.modules[__name__]`` is updated with a temporary module object for the
@@ -62,8 +70,15 @@
    function from threaded code.
 
 
+   .. versionchanged:: 2.7
+         Added ability to execute packages by looking for a ``__main__`` submodule
+
+
 .. seealso::
 
    :pep:`338` - Executing modules as scripts
-      PEP written and  implemented by Nick Coghlan.
+      PEP written and implemented by Nick Coghlan.
+
+   :pep:`366` - Main module explicit relative imports
+      PEP written and implemented by Nick Coghlan.
 
diff --git a/Doc/using/cmdline.rst b/Doc/using/cmdline.rst
index 2dd85f4..55b1ff3 100644
--- a/Doc/using/cmdline.rst
+++ b/Doc/using/cmdline.rst
@@ -78,6 +78,12 @@
    the implementation may not always enforce this (e.g. it may allow you to
    use a name that includes a hyphen).
 
+   Package names are also permitted. When a package name is supplied instead
+   of a normal module, the interpreter will execute ``<pkg>.__main__`` as
+   the main module. This behaviour is deliberately similar to the handling
+   of directories and zipfiles that are passed to the interpreter as the
+   script argument.
+
    .. note::
 
       This option cannot be used with builtin modules and extension modules
@@ -97,7 +103,7 @@
 
    .. seealso::
       :func:`runpy.run_module`
-         The actual implementation of this feature.
+         Equivalent functionality directly available to Python code
 
       :pep:`338` -- Executing modules as scripts
 
@@ -106,6 +112,9 @@
    .. versionchanged:: 2.5
       The named module can now be located inside a package.
 
+   .. versionchanged:: 2.7
+      Supply the package name to run a ``__main__`` submodule.
+
 
 .. describe:: -
 
diff --git a/Lib/runpy.py b/Lib/runpy.py
index fea6104..f9a29ad 100755
--- a/Lib/runpy.py
+++ b/Lib/runpy.py
@@ -80,13 +80,19 @@
     if loader is None:
         raise ImportError("No module named %s" % mod_name)
     if loader.is_package(mod_name):
-        raise ImportError(("%s is a package and cannot " +
-                          "be directly executed") % mod_name)
+        if mod_name == "__main__" or mod_name.endswith(".__main__"):
+            raise ImportError(("Cannot use package as __main__ module"))
+        try:
+            pkg_main_name = mod_name + ".__main__"
+            return _get_module_details(pkg_main_name)
+        except ImportError, e:
+            raise ImportError(("%s; %r is a package and cannot " +
+                               "be directly executed") %(e, mod_name))
     code = loader.get_code(mod_name)
     if code is None:
         raise ImportError("No code object available for %s" % mod_name)
     filename = _get_filename(loader, mod_name)
-    return loader, code, filename
+    return mod_name, loader, code, filename
 
 
 # XXX ncoghlan: Should this be documented and made public?
@@ -101,12 +107,12 @@
            __loader__
     """
     try:
-        loader, code, fname = _get_module_details(mod_name)
+        mod_name, loader, code, fname = _get_module_details(mod_name)
     except ImportError as exc:
         # Try to provide a good error message
         # for directories, zip files and the -m switch
         if set_argv0:
-            # For -m switch, just disply the exception
+            # For -m switch, just display the exception
             info = str(exc)
         else:
             # For directories/zipfiles, let the user
@@ -127,7 +133,7 @@
 
        Returns the resulting top level namespace dictionary
     """
-    loader, code, fname = _get_module_details(mod_name)
+    mod_name, loader, code, fname = _get_module_details(mod_name)
     if run_name is None:
         run_name = mod_name
     pkg_name = mod_name.rpartition('.')[0]
diff --git a/Lib/test/test_cmd_line_script.py b/Lib/test/test_cmd_line_script.py
index 995d4a8..29c92fa 100644
--- a/Lib/test/test_cmd_line_script.py
+++ b/Lib/test/test_cmd_line_script.py
@@ -158,6 +158,16 @@
         self.assert_(printed_package in data)
         self.assert_(printed_argv0 in data)
 
+    def _check_import_error(self, script_name, expected_msg,
+                            *cmd_line_switches):
+        run_args = cmd_line_switches + (script_name,)
+        exit_code, data = _run_python(*run_args)
+        if verbose:
+            print 'Output from test script %r:' % script_name
+            print data
+            print 'Expected output: %r' % expected_msg
+        self.assert_(expected_msg in data)
+
     def test_basic_script(self):
         with temp_dir() as script_dir:
             script_name = _make_test_script(script_dir, 'script')
@@ -182,6 +192,11 @@
             os.remove(script_name)
             self._check_script(script_dir, compiled_name, script_dir, '')
 
+    def test_directory_error(self):
+        with temp_dir() as script_dir:
+            msg = "can't find '__main__.py' in %r" % script_dir
+            self._check_import_error(script_dir, msg)
+
     def test_zipfile(self):
         with temp_dir() as script_dir:
             script_name = _make_test_script(script_dir, '__main__')
@@ -195,6 +210,13 @@
             zip_name, run_name = _make_test_zip(script_dir, 'test_zip', compiled_name)
             self._check_script(zip_name, run_name, zip_name, '')
 
+    def test_zipfile_error(self):
+        with temp_dir() as script_dir:
+            script_name = _make_test_script(script_dir, 'not_main')
+            zip_name, run_name = _make_test_zip(script_dir, 'test_zip', script_name)
+            msg = "can't find '__main__.py' in %r" % zip_name
+            self._check_import_error(zip_name, msg)
+
     def test_module_in_package(self):
         with temp_dir() as script_dir:
             pkg_dir = os.path.join(script_dir, 'test_pkg')
@@ -215,6 +237,47 @@
             launch_name = _make_launch_script(script_dir, 'launch', 'test_pkg.test_pkg.script', zip_name)
             self._check_script(launch_name, run_name, run_name, 'test_pkg.test_pkg')
 
+    def test_package(self):
+        with temp_dir() as script_dir:
+            pkg_dir = os.path.join(script_dir, 'test_pkg')
+            _make_test_pkg(pkg_dir)
+            script_name = _make_test_script(pkg_dir, '__main__')
+            launch_name = _make_launch_script(script_dir, 'launch', 'test_pkg')
+            self._check_script(launch_name, script_name,
+                               script_name, 'test_pkg')
+
+    def test_package_compiled(self):
+        with temp_dir() as script_dir:
+            pkg_dir = os.path.join(script_dir, 'test_pkg')
+            _make_test_pkg(pkg_dir)
+            script_name = _make_test_script(pkg_dir, '__main__')
+            compiled_name = _compile_test_script(script_name)
+            os.remove(script_name)
+            launch_name = _make_launch_script(script_dir, 'launch', 'test_pkg')
+            self._check_script(launch_name, compiled_name,
+                               compiled_name, 'test_pkg')
+
+    def test_package_error(self):
+        with temp_dir() as script_dir:
+            pkg_dir = os.path.join(script_dir, 'test_pkg')
+            _make_test_pkg(pkg_dir)
+            msg = ("'test_pkg' is a package and cannot "
+                   "be directly executed")
+            launch_name = _make_launch_script(script_dir, 'launch', 'test_pkg')
+            self._check_import_error(launch_name, msg)
+
+    def test_package_recursion(self):
+        with temp_dir() as script_dir:
+            pkg_dir = os.path.join(script_dir, 'test_pkg')
+            _make_test_pkg(pkg_dir)
+            main_dir = os.path.join(pkg_dir, '__main__')
+            _make_test_pkg(main_dir)
+            msg = ("Cannot use package as __main__ module; "
+                   "'test_pkg' is a package and cannot "
+                   "be directly executed")
+            launch_name = _make_launch_script(script_dir, 'launch', 'test_pkg')
+            self._check_import_error(launch_name, msg)
+
 
 def test_main():
     test.test_support.run_unittest(CmdLineTest)
diff --git a/Misc/ACKS b/Misc/ACKS
index cfa769c..4bed872 100644
--- a/Misc/ACKS
+++ b/Misc/ACKS
@@ -712,6 +712,7 @@
 Roger Upole
 Michael Urman
 Hector Urtubia
+Andi Vajda
 Atul Varma
 Dmitry Vasiliev
 Alexandre Vassalotti
diff --git a/Misc/NEWS b/Misc/NEWS
index 8d33ee8..81caead 100644
--- a/Misc/NEWS
+++ b/Misc/NEWS
@@ -149,6 +149,10 @@
 Library
 -------
 
+- Issue #4195: The ``runpy`` module (and the ``-m`` switch) now support
+  the execution of packages by looking for and executing a ``__main__``
+  submodule when a package name is supplied.
+
 - Issue #1731706: Call Tcl_ConditionFinalize for Tcl_Conditions that will
   not be used again (this requires Tcl/Tk 8.3.1), also fix a memory leak in
   Tkapp_Call when calling from a thread different than the one that created