ImportError: No module named sqlalchemy

I just experienced the same problem. Apparently, there is a new distribution method, the extension code is no longer stored under flaskext.

Source: Flask CHANGELOG This worked for me:

from flask_sqlalchemy import SQLAlchemy

Did you install flask-sqlalchemy? It looks like you have SQLAlchemy installed but not the Flask extension. Try pip install Flask-SQLAlchemy in your project's virtualenv to install it from PyPI.