diff --git a/src/python/pants/backend/python/register.py b/src/python/pants/backend/python/register.py
index 393123868f7..72b224bbece 100644
--- a/src/python/pants/backend/python/register.py
+++ b/src/python/pants/backend/python/register.py
@@ -8,7 +8,7 @@
 from pants.backend.python.python_artifact import PythonArtifact
 from pants.backend.python.python_requirement import PythonRequirement
 from pants.backend.python.python_requirements import PythonRequirements
-from pants.backend.python.rules import python_test_runner
+from pants.backend.python.rules import inject_init, python_test_runner
 from pants.backend.python.targets.python_app import PythonApp
 from pants.backend.python.targets.python_binary import PythonBinary
 from pants.backend.python.targets.python_distribution import PythonDistribution
@@ -81,4 +81,4 @@ def register_goals():
 
 
 def rules():
-  return tuple(python_test_runner.rules())
+  return inject_init.rules() + python_test_runner.rules()
diff --git a/src/python/pants/backend/python/rules/BUILD b/src/python/pants/backend/python/rules/BUILD
index c026f3eafba..b5bb28d2f7e 100644
--- a/src/python/pants/backend/python/rules/BUILD
+++ b/src/python/pants/backend/python/rules/BUILD
@@ -8,5 +8,6 @@ python_library(
     'src/python/pants/engine:selectors',
     'src/python/pants/rules/core',
     'src/python/pants/source:source',
+    'src/python/pants/util:objects',
   ],
 )
diff --git a/src/python/pants/backend/python/rules/inject_init.py b/src/python/pants/backend/python/rules/inject_init.py
new file mode 100644
index 00000000000..28a8664c56c
--- /dev/null
+++ b/src/python/pants/backend/python/rules/inject_init.py
@@ -0,0 +1,44 @@
+# coding=utf-8
+# Copyright 2019 Pants project contributors (see CONTRIBUTORS.md).
+# Licensed under the Apache License, Version 2.0 (see LICENSE).
+
+from __future__ import absolute_import, division, print_function, unicode_literals
+
+from pants.backend.python.subsystems.pex_build_util import identify_missing_init_files
+from pants.engine.fs import EMPTY_DIRECTORY_DIGEST, Digest, Snapshot
+from pants.engine.isolated_process import ExecuteProcessRequest, ExecuteProcessResult
+from pants.engine.rules import rule
+from pants.engine.selectors import Get
+from pants.util.objects import datatype
+
+
+# TODO(#7710): Once this gets fixed, rename this to InitInjectedDigest.
+class InjectedInitDigest(datatype([('directory_digest', Digest)])): pass
+
+
+@rule(InjectedInitDigest, [Snapshot])
+def inject_init(snapshot):
+  """Ensure that every package has an __init__.py file in it."""
+  missing_init_files = tuple(sorted(identify_missing_init_files(snapshot.files)))
+  if not missing_init_files:
+    new_init_files_digest = EMPTY_DIRECTORY_DIGEST
+  else:
+    # TODO(7718): add a builtin rule for FilesContent->Snapshot, so that we can avoid using touch
+    # and the absolute path and have the engine build the files for us.
+    touch_init_request = ExecuteProcessRequest(
+      argv=("/usr/bin/touch",) + missing_init_files,
+      output_files=missing_init_files,
+      description="Inject missing __init__.py files: {}".format(", ".join(missing_init_files)),
+      input_files=snapshot.directory_digest,
+    )
+    touch_init_result = yield Get(ExecuteProcessResult, ExecuteProcessRequest, touch_init_request)
+    new_init_files_digest = touch_init_result.output_directory_digest
+  # TODO(#7710): Once this gets fixed, merge the original source digest and the new init digest
+  # into one unified digest.
+  yield InjectedInitDigest(directory_digest=new_init_files_digest)
+
+
+def rules():
+  return [
+      inject_init,
+    ]
diff --git a/src/python/pants/backend/python/rules/python_test_runner.py b/src/python/pants/backend/python/rules/python_test_runner.py
index 0c8c2c6331b..7352fd1953e 100644
--- a/src/python/pants/backend/python/rules/python_test_runner.py
+++ b/src/python/pants/backend/python/rules/python_test_runner.py
@@ -10,11 +10,11 @@
 
 from future.utils import text_type
 
-from pants.backend.python.subsystems.pex_build_util import identify_missing_init_files
+from pants.backend.python.rules.inject_init import InjectedInitDigest
 from pants.backend.python.subsystems.pytest import PyTest
 from pants.backend.python.subsystems.python_setup import PythonSetup
-from pants.engine.fs import (Digest, DirectoriesToMerge, DirectoryWithPrefixToStrip, FilesContent,
-                             Snapshot, UrlToFetch)
+from pants.engine.fs import (Digest, DirectoriesToMerge, DirectoryWithPrefixToStrip, Snapshot,
+                             UrlToFetch)
 from pants.engine.isolated_process import (ExecuteProcessRequest, ExecuteProcessResult,
                                            FallibleExecuteProcessResult)
 from pants.engine.legacy.graph import BuildFileAddresses, TransitiveHydratedTargets
@@ -128,25 +128,13 @@ def run_python_test(test_target, pytest, python_setup, source_root_config):
     Digest, DirectoriesToMerge(directories=tuple(all_sources_digests)),
   )
 
-  # TODO(7716): add a builtin rule to go from DirectoriesToMerge->Snapshot or Digest->Snapshot.
-  # TODO(7715): generalize the injection of __init__.py files.
-  # TODO(7718): add a builtin rule for FilesContent->Snapshot.
-  file_contents = yield Get(FilesContent, Digest, sources_digest)
-  file_paths = [fc.path for fc in file_contents]
-  injected_inits = tuple(sorted(identify_missing_init_files(file_paths)))
-  if injected_inits:
-    touch_init_request = ExecuteProcessRequest(
-      argv=("/usr/bin/touch",) + injected_inits,
-      output_files=injected_inits,
-      description="Inject empty __init__.py into all packages without one already.",
-      input_files=sources_digest,
-    )
-    touch_init_result = yield Get(ExecuteProcessResult, ExecuteProcessRequest, touch_init_request)
-
-  all_input_digests = [sources_digest, requirements_pex_response.output_directory_digest]
-  if injected_inits:
-    all_input_digests.append(touch_init_result.output_directory_digest)
+  inits_digest = yield Get(InjectedInitDigest, Digest, sources_digest)
 
+  all_input_digests = [
+    sources_digest,
+    inits_digest.directory_digest,
+    requirements_pex_response.output_directory_digest,
+  ]
   merged_input_files = yield Get(
     Digest,
     DirectoriesToMerge,
diff --git a/tests/python/pants_test/backend/python/rules/BUILD b/tests/python/pants_test/backend/python/rules/BUILD
index da14bb63c0c..c791d116b42 100644
--- a/tests/python/pants_test/backend/python/rules/BUILD
+++ b/tests/python/pants_test/backend/python/rules/BUILD
@@ -1,6 +1,18 @@
 # Copyright 2019 Pants project contributors (see CONTRIBUTORS.md).
 # Licensed under the Apache License, Version 2.0 (see LICENSE).
 
+python_tests(
+  name='inject_init',
+  sources=['test_inject_init.py'],
+  dependencies=[
+    'src/python/pants/backend/python/rules',
+    'src/python/pants/engine:fs',
+    'src/python/pants/engine:rules',
+    'src/python/pants/util:collections',
+    'tests/python/pants_test:test_base',
+  ]
+)
+
 python_tests(
   name='python_test_runner',
   sources=['test_python_test_runner.py'],
diff --git a/tests/python/pants_test/backend/python/rules/test_inject_init.py b/tests/python/pants_test/backend/python/rules/test_inject_init.py
new file mode 100644
index 00000000000..0ea6a7026b4
--- /dev/null
+++ b/tests/python/pants_test/backend/python/rules/test_inject_init.py
@@ -0,0 +1,39 @@
+# coding=utf-8
+# Copyright 2019 Pants project contributors (see CONTRIBUTORS.md).
+# Licensed under the Apache License, Version 2.0 (see LICENSE).
+
+from __future__ import absolute_import, division, print_function, unicode_literals
+
+from pants.backend.python.rules.inject_init import InjectedInitDigest, inject_init
+from pants.engine.fs import EMPTY_DIRECTORY_DIGEST, EMPTY_SNAPSHOT, Snapshot
+from pants.engine.rules import RootRule
+from pants.util.collections import assert_single_element
+from pants_test.test_base import TestBase
+
+
+class TestInjectInit(TestBase):
+
+  @classmethod
+  def rules(cls):
+    return super(TestInjectInit, cls).rules() + [inject_init, RootRule(Snapshot)]
+
+  def assert_result(self, input_snapshot, expected_digest):
+    injected_digest = assert_single_element(
+      self.scheduler.product_request(InjectedInitDigest, [input_snapshot])
+    )
+    self.assertEqual(injected_digest.directory_digest, expected_digest)
+
+  def test_noops_when_empty_snapshot(self):
+    self.assert_result(input_snapshot=EMPTY_SNAPSHOT, expected_digest=EMPTY_DIRECTORY_DIGEST)
+
+  def test_noops_when_init_already_present(self):
+    snapshot = self.make_snapshot({
+      "test/foo.py": "",
+      "test/__init__.py": ""
+    })
+    self.assert_result(input_snapshot=snapshot, expected_digest=EMPTY_DIRECTORY_DIGEST)
+
+  def test_adds_when_init_missing(self):
+    snapshot = self.make_snapshot({"test/foo.py": ""})
+    expected_digest = self.make_snapshot({"test/__init__.py": ""}).directory_digest
+    self.assert_result(input_snapshot=snapshot, expected_digest=expected_digest)