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There is no way to write a program in Python capable to process large/unlimited output coming from a subprocess stream without deadlocks.
http://docs.python.org/library/subprocess.html#subprocess.Popen.communicate
 "Note The data read is buffered in memory, so do not use this method if the data size is large or unlimited."
http://docs.python.org/library/subprocess.html#subprocess.Popen.stdin
http://docs.python.org/library/subprocess.html#subprocess.Popen.stdout
http://docs.python.org/library/subprocess.html#subprocess.Popen.stderr
 "Warning Use communicate() rather than .stdin.write, .stdout.read or .stderr.read to avoid deadlocks due to any of the other OS pipe buffers filling up and blocking the child process."
So, what should I use?

I think the note for communicate() just means that you might get MemoryError (or some other exception) if the output is too big. But I agree it is ambiguous.
communicate() uses select() on Unix and threads on Windows, so deadlocks should not be possible.
> So, what should I use?
Use communicate() (on a machine with infinite memory;-)

what sort of machine has infinite memory?

Well if you're *certain* that the process is only using one stream, then you can just use read/write on that stream.
If not, it probably means you have to use either threads or select/poll.
This is a known issue with subprocess; there are a few proposals on the tracker about this. See issue1191964 for example.

The problem with memory is more actual for machines with SSD where swap is usually turned off and /tmp files are located on memory disk. Hitting memory limit often means hard reset.
My process is pretty generic that uses all streams, and I don't know how to use threads/polls crossplatform way.
issue1191964 looks interesting.

See also issue1260171.
Closing as a duplicate of that.