diff --git a/src/libmain/shared.cc b/src/libmain/shared.cc
index ec639052b5..a93d6cb501 100644
--- a/src/libmain/shared.cc
+++ b/src/libmain/shared.cc
@@ -18,6 +18,15 @@ void sigintHandler(int signo)
 }
 
 
+void setLogType(string lt)
+{
+    if (lt == "pretty") logType = ltPretty;
+    else if (lt == "escapes") logType = ltEscapes;
+    else if (lt == "flat") logType = ltFlat;
+    else throw UsageError("unknown log type");
+}
+
+
 /* Initialize and reorder arguments, then call the actual argument
    processor. */
 static void initAndRun(int argc, char * * argv)
@@ -44,6 +53,10 @@ static void initAndRun(int argc, char * * argv)
     if (sigaction(SIGINT, &act, &oact))
         throw SysError("installing handler for SIGINT");
 
+    /* Process the NIX_LOG_TYPE environment variable. */
+    char * lt = getenv("NIX_LOG_TYPE");
+    if (lt) setLogType(lt);
+
     /* Put the arguments in a vector. */
     Strings args, remaining;
     while (argc--) args.push_back(*argv++);
@@ -72,7 +85,11 @@ static void initAndRun(int argc, char * * argv)
         string arg = *i;
         if (arg == "--verbose" || arg == "-v")
             verbosity = (Verbosity) ((int) verbosity + 1);
-        else if (arg == "--build-output" || arg == "-B")
+        else if (arg == "--log-type") {
+            ++i;
+            if (i == args.end()) throw UsageError("`--log-type' requires an argument");
+            setLogType(*i);
+        } else if (arg == "--build-output" || arg == "-B")
             buildVerbosity = lvlError; /* lowest */
         else if (arg == "--help") {
             printHelp();
diff --git a/src/libutil/util.cc b/src/libutil/util.cc
index 3a6914cba1..768acf811c 100644
--- a/src/libutil/util.cc
+++ b/src/libutil/util.cc
@@ -1,6 +1,7 @@
 #include <iostream>
 #include <cerrno>
 #include <cstdio>
+#include <sstream>
 
 #include <sys/types.h>
 #include <sys/stat.h>
@@ -223,6 +224,7 @@ void writeStringToFile(const Path & path, const string & s)
 }
 
 
+LogType logType = ltPretty;
 Verbosity verbosity = lvlError;
 
 static int nestingLevel = 0;
@@ -236,13 +238,28 @@ Nest::Nest()
 
 Nest::~Nest()
 {
-    if (nest) nestingLevel--;
+    if (nest) {
+        nestingLevel--;
+        if (logType == ltEscapes)
+            cerr << "\033[q";
+    }
+}
+
+
+static string escVerbosity(Verbosity level)
+{
+    int l = (int) level;
+    ostringstream st;
+    st << l;
+    return st.str();
 }
 
 
 void Nest::open(Verbosity level, const format & f)
 {
     if (level <= verbosity) {
+        if (logType == ltEscapes)
+            cerr << "\033[" << escVerbosity(level) << "p";
         printMsg_(level, f);
         nest = true;
         nestingLevel++;
@@ -254,10 +271,13 @@ void printMsg_(Verbosity level, const format & f)
 {
     checkInterrupt();
     if (level > verbosity) return;
-    string spaces;
-    for (int i = 0; i < nestingLevel; i++)
-        spaces += "|   ";
-    cerr << format("%1%%2%\n") % spaces % f.str();
+    string prefix;
+    if (logType == ltPretty)
+        for (int i = 0; i < nestingLevel; i++)
+            prefix += "|   ";
+    else if (logType == ltEscapes && level != lvlInfo)
+        prefix = "\033[" + escVerbosity(level) + "s";
+    cerr << format("%1%%2%\n") % prefix % f.str();
 }
 
 
diff --git a/src/libutil/util.hh b/src/libutil/util.hh
index 34fff003b8..ac96d7fc1a 100644
--- a/src/libutil/util.hh
+++ b/src/libutil/util.hh
@@ -100,6 +100,13 @@ void writeStringToFile(const Path & path, const string & s);
 
 /* Messages. */
 
+
+typedef enum {
+    ltPretty,   /* nice, nested output */
+    ltEscapes,  /* nesting indicated using escape codes (for log2xml) */
+    ltFlat      /* no nesting */
+} LogType;
+
 typedef enum { 
     lvlError,
     lvlInfo,
@@ -109,7 +116,8 @@ typedef enum {
     lvlVomit
 } Verbosity;
 
-extern Verbosity verbosity; /* supress msgs > this */
+extern LogType logType;
+extern Verbosity verbosity; /* suppress msgs > this */
 
 class Nest
 {