How to highlight Python syntax in LaTeX Listings \lstinputlistings command

Good approach is defining new environments for programming language. Minimal setup can be around this:

\documentclass[a4paper,12pt]{article}
\usepackage[utf8]{inputenc}

% Default fixed font does not support bold face
\DeclareFixedFont{\ttb}{T1}{txtt}{bx}{n}{12} % for bold
\DeclareFixedFont{\ttm}{T1}{txtt}{m}{n}{12}  % for normal

% Custom colors
\usepackage{color}
\definecolor{deepblue}{rgb}{0,0,0.5}
\definecolor{deepred}{rgb}{0.6,0,0}
\definecolor{deepgreen}{rgb}{0,0.5,0}

\usepackage{listings}

% Python style for highlighting
\newcommand\pythonstyle{\lstset{
language=Python,
basicstyle=\ttm,
morekeywords={self},              % Add keywords here
keywordstyle=\ttb\color{deepblue},
emph={MyClass,__init__},          % Custom highlighting
emphstyle=\ttb\color{deepred},    % Custom highlighting style
stringstyle=\color{deepgreen},
frame=tb,                         % Any extra options here
showstringspaces=false
}}


% Python environment
\lstnewenvironment{python}[1][]
{
\pythonstyle
\lstset{#1}
}
{}

% Python for external files
\newcommand\pythonexternal[2][]{{
\pythonstyle
\lstinputlisting[#1]{#2}}}

% Python for inline
\newcommand\pythoninline[1]{{\pythonstyle\lstinline!#1!}}

\begin{document}

\section{``In-text'' listing highlighting}

\begin{python}
class MyClass(Yourclass):
    def __init__(self, my, yours):
        bla = '5 1 2 3 4'
        print bla
\end{python}

\section{External listing highlighting}

\pythonexternal{demo.py}

\section{Inline highlighting}

Definition \pythoninline{class MyClass} means \dots

\end{document}

Output:

I found this python package pythonhighlight on Github

Define it like this \usepackage{pythonhighlight} and use it like this:

\begin{python}
def f(x):
    return x
\end{python}

I'd consider running your code through pygments to generate the latex, probably using the minted package. You can get some details here https://stackoverflow.com/questions/1966425/source-code-highlighting-in-latex#1985330 .