How python deals with module and package having the same name?

Actually, it is possible, by manually guiding the import machinery to use a .py file instead of directory. (This code is not well tested, but seems to work). UPDATE 2020: Note that this requires using custom import_module() function instead of normal import statement. However, with modern Python3 and its importlib, it might be possible to make the bare import statement to work the same way too. (Note that this answer shows flexibility which Python offers. It's not an encouragement to use this in your applications. Use this only if you know what you're doing.)

File foo.py

print "foo module loaded"

File foo/__init__.py

print "foo package loaded"

File test1.py

import foo

File test2.py

import os, imp

def import_module(dir, name):
    """ load a module (not a package) with a given name 
        from the specified directory 
    """
    for description in imp.get_suffixes():
        (suffix, mode, type) = description
        if not suffix.startswith('.py'): continue
        abs_path = os.path.join(dir, name + suffix)
        if not os.path.exists(abs_path): continue
        fh = open(abs_path)
        return imp.load_module(name, fh, abs_path, (description))

import_module('.', 'foo')

Running

$ python test1.py 
foo package loaded

$ python test2.py 
foo module loaded

I believe the package will always get loaded. You can't work around this, as far as I know. So change either the package or the module name. Docs: http://docs.python.org/tutorial/modules.html#the-module-search-path