diff --git a/packages/angular-cli/blueprints/ng2/files/karma.conf.js b/packages/angular-cli/blueprints/ng2/files/karma.conf.js
index 5c349bd00abd..bdbaf86a8a90 100644
--- a/packages/angular-cli/blueprints/ng2/files/karma.conf.js
+++ b/packages/angular-cli/blueprints/ng2/files/karma.conf.js
@@ -27,7 +27,7 @@ module.exports = function (config) {
       config: './angular-cli.json',
       environment: 'dev'
     },
-    reporters: ['progress', 'karma-remap-istanbul'],
+    reporters: config.debug ? ['progress'] : ['progress', 'karma-remap-istanbul'],
     port: 9876,
     colors: true,
     logLevel: config.LOG_INFO,
diff --git a/packages/angular-cli/commands/test.ts b/packages/angular-cli/commands/test.ts
index 74049b943c1c..264d9d0e1080 100644
--- a/packages/angular-cli/commands/test.ts
+++ b/packages/angular-cli/commands/test.ts
@@ -5,6 +5,7 @@ import {CliConfig} from '../models/config';
 const NgCliTestCommand = TestCommand.extend({
   availableOptions: [
     { name: 'watch', type: Boolean, default: true, aliases: ['w'] },
+    { name: 'debug', type: Boolean, default: false, aliases: ['d'] },
     { name: 'browsers', type: String },
     { name: 'colors', type: Boolean },
     { name: 'log-level', type: String },
diff --git a/packages/angular-cli/models/webpack-build-test.js b/packages/angular-cli/models/webpack-build-test.js
index dfb6deba34ff..8946e75a10f2 100644
--- a/packages/angular-cli/models/webpack-build-test.js
+++ b/packages/angular-cli/models/webpack-build-test.js
@@ -3,9 +3,10 @@
 const path = require('path');
 const webpack = require('webpack');
 
-const getWebpackTestConfig = function (projectRoot, environment, appConfig) {
+const getWebpackTestConfig = function (projectRoot, environment, appConfig, debug) {
 
   const appRoot = path.resolve(projectRoot, appConfig.root);
+  var debug = typeof debug !== 'undefined' ?  debug : false;
 
   return {
     devtool: 'inline-source-map',
@@ -66,7 +67,7 @@ const getWebpackTestConfig = function (projectRoot, environment, appConfig) {
         { test: /\.(jpg|png)$/, loader: 'url-loader?limit=128000' },
         { test: /\.html$/, loader: 'raw-loader', exclude: [path.resolve(appRoot, appConfig.index)] }
       ],
-      postLoaders: [
+      postLoaders: debug ? [] : [
         {
           test: /\.(js|ts)$/, loader: 'sourcemap-istanbul-instrumenter-loader',
           exclude: [
diff --git a/packages/angular-cli/plugins/karma.js b/packages/angular-cli/plugins/karma.js
index 1c17e28e3771..23c6cb594bcd 100644
--- a/packages/angular-cli/plugins/karma.js
+++ b/packages/angular-cli/plugins/karma.js
@@ -12,7 +12,7 @@ const init = (config) => {
   const environment = config.angularCli.environment || 'dev';
 
   // add webpack config
-  const webpackConfig = getWebpackTestConfig(config.basePath, environment, appConfig);
+  config.webpack = getWebpackTestConfig(config.basePath, environment, appConfig, config.debug);
   const webpackMiddlewareConfig = {
     noInfo: true, // Hide webpack output because its noisy.
     stats: { // Also prevent chunk and module display output, cleaner look. Only emit errors.
@@ -25,7 +25,6 @@ const init = (config) => {
       chunkModules: false
     }
   };
-  config.webpack = Object.assign(webpackConfig, config.webpack);
   config.webpackMiddleware = Object.assign(webpackMiddlewareConfig, config.webpackMiddleware);
 
   // replace the angular-cli preprocessor with webpack+sourcemap
@@ -45,4 +44,4 @@ preprocessor.$inject = []
 module.exports = Object.assign({
   'framework:angular-cli': ['factory', init],
   'preprocessor:angular-cli': ['factory', preprocessor]
-}, require('karma-webpack'), require('karma-sourcemap-loader'));
\ No newline at end of file
+}, require('karma-webpack'), require('karma-sourcemap-loader'));