Can I use __init__.py to define global variables?

You should be able to put them in __init__.py. This is done all the time.

mypackage/__init__.py:

MY_CONSTANT = 42

mypackage/mymodule.py:

from mypackage import MY_CONSTANT
print "my constant is", MY_CONSTANT

Then, import mymodule:

>>> from mypackage import mymodule
my constant is 42

Still, if you do have constants, it would be reasonable (best practices, probably) to put them in a separate module (constants.py, config.py, ...) and then if you want them in the package namespace, import them.

mypackage/__init__.py:

from mypackage.constants import *

Still, this doesn't automatically include the constants in the namespaces of the package modules. Each of the modules in the package will still have to import constants explicitly either from mypackage or from mypackage.constants.

You cannot do that. You will have to explicitely import your constants into each individual module's namespace. The best way to achieve this is to define your constants in a "config" module and import it everywhere you require it:

# mypackage/config.py
MY_CONST = 17

# mypackage/main.py
from mypackage.config import *