How to specify another tox project folder as a dependency for a tox project

You can use pip's --editable option in your main project, like followings:

deps =
    --editable=file:///{toxinidir}/../library
    -r{toxinidir}/requirements.txt

P.S. Don't use this style: -e file:///{toxinidir}/../library, because tox pass whole string as an argument to argparse in error foramt.

As suggested in the comments to the response of diabloneo it is possible to supply an install_command in the tox.ini file:

I used this to make a bash script that takes all the usual pip arguments, but then runs pip before with just pip install --editable="file://`pwd`/../path/to/neighbour/repo", and only then actually runs the regular pip install $@ afterwards with the arguments to the script (as would be passed by tox to pip directly). I then used this script with install_command instead of the regular default pip command.

With this two-step procedure it works fine :-)