environment variable for django settings?

I've been using Django for over a year and have never needed to 'define the environment variable DJANGO_SETTINGS_MODULE as I am asked to do in the following error message:

E
======================================================================
ERROR: setUpClass (__main__.SmokeTest)
----------------------------------------------------------------------
Traceback (most recent call last):
  File "C:Python27libsite-packagesdjangotesttestcases.py", line 1026, in setUpClass
    if not connections_support_transactions():
  File "C:Python27libsite-packagesdjangotesttestcases.py", line 991, in connections_support_transactions
    for conn in connections.all())
  File "C:Python27libsite-packagesdjangodbutils.py", line 227, in all
    return [self[alias] for alias in self]
  File "C:Python27libsite-packagesdjangodbutils.py", line 224, in __iter__
    return iter(self.databases)
  File "C:Python27libsite-packagesdjangoutilsfunctional.py", line 33, in __get__
    res = instance.__dict__[self.name] = self.func(instance)
  File "C:Python27libsite-packagesdjangodbutils.py", line 157, in databases
    self._databases = settings.DATABASES
  File "C:Python27libsite-packagesdjangoconf__init__.py", line 55, in __getattr__
    self._setup(name)
  File "C:Python27libsite-packagesdjangoconf__init__.py", line 41, in _setup
    % (desc, ENVIRONMENT_VARIABLE))
ImproperlyConfigured: Requested setting DATABASES, but settings are not configured. You must either define the environment variable DJANGO_SETTINGS_MODULE or call settings.configure() before accessing settings.

I am using Windows command line.

I tried running

from django.conf import settings

settings.configure()

as explained here, but this didn't help.

Does anyone know how to get this to work?