diff --git a/kedro/extras/extensions/__init__.py b/kedro/extras/extensions/__init__.py
new file mode 100644
index 0000000000..128cff94e7
--- /dev/null
+++ b/kedro/extras/extensions/__init__.py
@@ -0,0 +1,30 @@
+# Copyright 2020 QuantumBlack Visual Analytics Limited
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND,
+# EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES
+# OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
+# NONINFRINGEMENT. IN NO EVENT WILL THE LICENSOR OR OTHER CONTRIBUTORS
+# BE LIABLE FOR ANY CLAIM, DAMAGES, OR OTHER LIABILITY, WHETHER IN AN
+# ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF, OR IN
+# CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.
+#
+# The QuantumBlack Visual Analytics Limited ("QuantumBlack") name and logo
+# (either separately or in combination, "QuantumBlack Trademarks") are
+# trademarks of QuantumBlack. The License does not grant you any right or
+# license to the QuantumBlack Trademarks. You may not use the QuantumBlack
+# Trademarks or any confusingly similar mark as a trademark for your product,
+# or use the QuantumBlack Trademarks in any other manner that might cause
+# confusion in the marketplace, including but not limited to in advertising,
+# on websites, or on software.
+#
+# See the License for the specific language governing permissions and
+# limitations under the License.
+"""
+This module contains an IPython extension.
+"""
diff --git a/kedro/extras/extensions/ipython.py b/kedro/extras/extensions/ipython.py
new file mode 100644
index 0000000000..e72a4d9903
--- /dev/null
+++ b/kedro/extras/extensions/ipython.py
@@ -0,0 +1,133 @@
+# Copyright 2020 QuantumBlack Visual Analytics Limited
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND,
+# EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES
+# OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
+# NONINFRINGEMENT. IN NO EVENT WILL THE LICENSOR OR OTHER CONTRIBUTORS
+# BE LIABLE FOR ANY CLAIM, DAMAGES, OR OTHER LIABILITY, WHETHER IN AN
+# ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF, OR IN
+# CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.
+#
+# The QuantumBlack Visual Analytics Limited ("QuantumBlack") name and logo
+# (either separately or in combination, "QuantumBlack Trademarks") are
+# trademarks of QuantumBlack. The License does not grant you any right or
+# license to the QuantumBlack Trademarks. You may not use the QuantumBlack
+# Trademarks or any confusingly similar mark as a trademark for your product,
+# or use the QuantumBlack Trademarks in any other manner that might cause
+# confusion in the marketplace, including but not limited to in advertising,
+# on websites, or on software.
+#
+# See the License for the specific language governing permissions and
+# limitations under the License.
+# pylint: disable=import-outside-toplevel,global-statement,invalid-name
+"""
+This script creates an IPython extension to load Kedro-related variables in
+local scope.
+"""
+import logging.config
+import sys
+from pathlib import Path
+
+from IPython import get_ipython
+from IPython.core.magic import needs_local_scope, register_line_magic
+
+project_path = Path.cwd()
+catalog = None
+context = None
+session = None
+
+
+def _remove_cached_modules(package_name):
+    to_remove = [mod for mod in sys.modules if mod.startswith(package_name)]
+    # `del` is used instead of `reload()` because: If the new version of a module does not
+    # define a name that was defined by the old version, the old definition remains.
+    for module in to_remove:
+        del sys.modules[module]  # pragma: no cover
+
+
+def _clear_hook_manager():
+    from kedro.framework.hooks import get_hook_manager
+
+    hook_manager = get_hook_manager()
+    name_plugin_pairs = hook_manager.list_name_plugin()
+    for name, plugin in name_plugin_pairs:
+        hook_manager.unregister(name=name, plugin=plugin)  # pragma: no cover
+
+
+def load_kedro_objects(path, line=None):  # pylint: disable=unused-argument
+    """Line magic which reloads all Kedro default variables."""
+
+    import kedro.config.default_logger  # noqa: F401 # pylint: disable=unused-import
+    from kedro.framework.cli import load_entry_points
+    from kedro.framework.context.context import _add_src_to_path
+    from kedro.framework.project.metadata import _get_project_metadata
+    from kedro.framework.session import KedroSession
+    from kedro.framework.session.session import _activate_session
+
+    global context
+    global catalog
+    global session
+
+    path = path or project_path
+    project_metadata = _get_project_metadata(path)
+    _add_src_to_path(project_metadata.source_dir, path)
+
+    session = KedroSession.create(path)
+    _activate_session(session)
+
+    _remove_cached_modules(project_metadata.package_name)
+
+    # clear hook manager; hook implementations will be re-registered when the
+    # context is instantiated again in `session.context` below
+    _clear_hook_manager()
+
+    logging.debug("Loading the context from %s", str(path))
+    # Reload context to fix `pickle` related error (it is unable to serialize reloaded objects)
+    # Some details can be found here:
+    # https://modwsgi.readthedocs.io/en/develop/user-guides/issues-with-pickle-module.html#packing-and-script-reloading
+    context = session.load_context()
+    catalog = context.catalog
+    get_ipython().push(
+        variables={"context": context, "catalog": catalog, "session": session}
+    )
+
+    logging.info("** Kedro project %s", str(project_metadata.project_name))
+    logging.info("Defined global variable `context`, `session` and `catalog`")
+
+    for line_magic in load_entry_points("line_magic"):
+        register_line_magic(needs_local_scope(line_magic))
+        logging.info("Registered line magic `%s`", line_magic.__name__)
+
+
+def init_kedro(path=""):
+    """Line magic to set path to Kedro project.
+    `%reload_kedro` will default to this location.
+    """
+    global project_path
+    if path:
+        project_path = Path(path).expanduser().resolve()
+        logging.info("Updated path to Kedro project: %s", str(project_path))
+    else:
+        logging.info("No path argument was provided. Using: %s", str(project_path))
+
+
+def load_ipython_extension(ipython):
+    """Main entry point when %load_ext is executed"""
+    ipython.register_magic_function(init_kedro, "line")
+    ipython.register_magic_function(load_kedro_objects, "line", "reload_kedro")
+
+    try:
+        load_kedro_objects(project_path)
+    except (ImportError, ModuleNotFoundError):
+        logging.error("Kedro appears not to be installed in your current environment.")
+    except Exception:  # pylint: disable=broad-except
+        logging.error(
+            "Could not register Kedro extension. Make sure you're in a valid Kedro project.",
+            exc_info=True,
+        )
diff --git a/requirements.txt b/requirements.txt
index ca9b904898..e040f1eb15 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -11,4 +11,5 @@ pluggy~=0.13.0
 python-json-logger~=0.1.9
 PyYAML>=4.2, <6.0
 setuptools>=38.0
+toml~=0.10
 toposort~=1.5  # Needs to be at least 1.5 to be able to raise CircularDependencyError
diff --git a/setup.cfg b/setup.cfg
index f9890ff35c..f3860c722a 100644
--- a/setup.cfg
+++ b/setup.cfg
@@ -29,7 +29,7 @@ layers =
     framework.context
     framework.project
     runner
-    extras
+    extras.datasets
     io
     pipeline
     config
@@ -53,7 +53,7 @@ forbidden_modules =
     kedro.runner
     kedro.io
     kedro.pipeline
-    kedro.extras
+    kedro.extras.datasets
 
 [importlinter:contract:4]
 name = Runner et al cannot import Config
@@ -62,7 +62,7 @@ source_modules =
     kedro.runner
     kedro.io
     kedro.pipeline
-    kedro.extras
+    kedro.extras.datasets
 forbidden_modules =
     kedro.config
 ignore_imports=
diff --git a/setup.py b/setup.py
index 932679ee99..3a7126f695 100644
--- a/setup.py
+++ b/setup.py
@@ -136,6 +136,7 @@ def _collect_requirements(requires):
         "ipykernel>=4.8.1, <5.0",
     ],
     "geopandas": _collect_requirements(geopandas_require),
+    "ipython": ["ipython~=7.0"],
     "matplotlib": _collect_requirements(matplotlib_require),
     "holoviews": _collect_requirements(holoviews_require),
     "networkx": _collect_requirements(networkx_require),
diff --git a/tests/extras/extensions/__init__.py b/tests/extras/extensions/__init__.py
new file mode 100644
index 0000000000..e69de29bb2
diff --git a/tests/extras/extensions/test_ipython.py b/tests/extras/extensions/test_ipython.py
new file mode 100644
index 0000000000..616d8b037d
--- /dev/null
+++ b/tests/extras/extensions/test_ipython.py
@@ -0,0 +1,173 @@
+# Copyright 2020 QuantumBlack Visual Analytics Limited
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND,
+# EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES
+# OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
+# NONINFRINGEMENT. IN NO EVENT WILL THE LICENSOR OR OTHER CONTRIBUTORS
+# BE LIABLE FOR ANY CLAIM, DAMAGES, OR OTHER LIABILITY, WHETHER IN AN
+# ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF, OR IN
+# CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.
+#
+# The QuantumBlack Visual Analytics Limited ("QuantumBlack") name and logo
+# (either separately or in combination, "QuantumBlack Trademarks") are
+# trademarks of QuantumBlack. The License does not grant you any right or
+# license to the QuantumBlack Trademarks. You may not use the QuantumBlack
+# Trademarks or any confusingly similar mark as a trademark for your product,
+# or use the QuantumBlack Trademarks in any other manner that might cause
+# confusion in the marketplace, including but not limited to in advertising,
+# on websites, or on software.
+#
+# See the License for the specific language governing permissions and
+# limitations under the License.
+# pylint: disable=import-outside-toplevel,reimported
+import pytest
+
+from kedro.extras.extensions.ipython import (
+    init_kedro,
+    load_ipython_extension,
+    load_kedro_objects,
+)
+from kedro.framework.project import ProjectMetadata
+from kedro.framework.session.session import _deactivate_session
+
+
+@pytest.fixture(autouse=True)
+def project_path(mocker, tmp_path):
+    path = tmp_path
+    mocker.patch("kedro.extras.extensions.ipython.project_path", path)
+
+
+@pytest.fixture(autouse=True)
+def cleanup_session():
+    yield
+    _deactivate_session()
+
+
+class TestInitKedro:
+    def test_init_kedro(self, tmp_path, caplog):
+        from kedro.extras.extensions.ipython import project_path
+
+        assert project_path == tmp_path
+
+        kedro_path = tmp_path / "here"
+        init_kedro(str(kedro_path))
+        expected_path = kedro_path.expanduser().resolve()
+        expected_message = f"Updated path to Kedro project: {expected_path}"
+
+        log_messages = [record.getMessage() for record in caplog.records]
+        assert expected_message in log_messages
+        from kedro.extras.extensions.ipython import project_path
+
+        # make sure global variable updated
+        assert project_path == expected_path
+
+    def test_init_kedro_no_path(self, tmp_path, caplog):
+        from kedro.extras.extensions.ipython import project_path
+
+        assert project_path == tmp_path
+
+        init_kedro()
+        expected_message = f"No path argument was provided. Using: {tmp_path}"
+
+        log_messages = [record.getMessage() for record in caplog.records]
+        assert expected_message in log_messages
+        from kedro.extras.extensions.ipython import project_path
+
+        # make sure global variable stayed the same
+        assert project_path == tmp_path
+
+
+class TestLoadKedroObjects:
+    def test_load_kedro_objects(self, tmp_path, mocker):
+        fake_metadata = ProjectMetadata(
+            source_dir=tmp_path / "src",  # default
+            config_file=tmp_path / "pyproject.toml",
+            package_name="fake_package_name",
+            project_name="fake_project_name",
+            project_version="0.1",
+            context_path="hello.there",
+        )
+        mocker.patch(
+            "kedro.framework.project.metadata._get_project_metadata",
+            return_value=fake_metadata,
+        )
+        mocker.patch(
+            "kedro.framework.session.session._get_project_metadata",
+            return_value=fake_metadata,
+        )
+        mocker.patch("kedro.framework.context.context._add_src_to_path")
+        mock_line_magic = mocker.MagicMock()
+        mock_line_magic.__name__ = "abc"
+        mocker.patch(
+            "kedro.framework.cli.load_entry_points", return_value=[mock_line_magic]
+        )
+        mock_register_line_magic = mocker.patch(
+            "kedro.extras.extensions.ipython.register_line_magic"
+        )
+        mock_context = mocker.patch("kedro.framework.session.KedroSession.load_context")
+        mock_ipython = mocker.patch("kedro.extras.extensions.ipython.get_ipython")
+
+        load_kedro_objects(tmp_path)
+
+        mock_ipython().push.assert_called_once_with(
+            variables={
+                "context": mock_context(),
+                "catalog": mock_context().catalog,
+                "session": mocker.ANY,
+            }
+        )
+        assert mock_register_line_magic.call_count == 1
+
+    def test_load_kedro_objects_not_in_kedro_project(self, tmp_path, mocker):
+        mocker.patch(
+            "kedro.framework.project.metadata._get_project_metadata",
+            side_effect=[RuntimeError],
+        )
+        mock_ipython = mocker.patch("kedro.extras.extensions.ipython.get_ipython")
+
+        with pytest.raises(RuntimeError):
+            load_kedro_objects(tmp_path)
+        assert not mock_ipython().called
+        assert not mock_ipython().push.called
+
+
+class TestLoadIPythonExtension:
+    @pytest.mark.parametrize(
+        "error,expected_log_message",
+        [
+            (
+                ImportError,
+                "Kedro appears not to be installed in your current environment.",
+            ),
+            (
+                RuntimeError,
+                "Could not register Kedro extension. Make sure you're in a valid Kedro project.",
+            ),
+        ],
+    )
+    def test_load_extension_not_in_kedro_env_or_project(
+        self, error, expected_log_message, mocker, caplog
+    ):
+        mocker.patch(
+            "kedro.framework.project.metadata._get_project_metadata",
+            side_effect=[error],
+        )
+        mock_ipython = mocker.patch("kedro.extras.extensions.ipython.get_ipython")
+
+        load_ipython_extension(mocker.MagicMock())
+
+        assert not mock_ipython().called
+        assert not mock_ipython().push.called
+
+        log_messages = [
+            record.getMessage()
+            for record in caplog.records
+            if record.levelname == "ERROR"
+        ]
+        assert log_messages == [expected_log_message]
diff --git a/tests/framework/session/test_store.py b/tests/framework/session/test_store.py
index acda2f47ae..62dc615487 100644
--- a/tests/framework/session/test_store.py
+++ b/tests/framework/session/test_store.py
@@ -129,7 +129,7 @@ def test_from_config_uncaught_error(self, mocker):
         with pytest.raises(ValueError, match=re.escape(pattern)):
             BaseSessionStore.from_config(config)
 
-        assert mocked_init.called_once_with(**config)
+        mocked_init.assert_called_once_with(**config)
 
 
 @pytest.fixture