The agile development method does not represent a single approach, but rather defines a number of recommendations used in Extreme Programming (XP), SCRUM, Test Driven Development (TDD), and other methodologies that implement an agile software development system. Besides studies of the Integrated Development Environment (IDE) and automated test tools promoted by Extreme Programming and Test Driven Development, it is not easy to find information in the current literature about an effective software development environment where different tools are combined to automate software development tasks, and replace error-prone and time-consuming manual work. This paper is an attempt to fill this gap, and to draw attention to the fact that an effective development environment requires adequate tools. After presenting different tools that can be used for application lifecycle management, change management, collaboration, development, test, build and deployment automation, and continuing integration, this paper offers a model that recommends a set of tools that can work together to provide an effective development environment.