diff --git a/src/compiler/commandLineParser.ts b/src/compiler/commandLineParser.ts
index 842e73d00f553..b39a802a0b528 100644
--- a/src/compiler/commandLineParser.ts
+++ b/src/compiler/commandLineParser.ts
@@ -1,6 +1,7 @@
 /// <reference path="sys.ts"/>
 /// <reference path="types.ts"/>
 /// <reference path="core.ts"/>
+/// <reference path="diagnosticInformationMap.generated.ts"/>
 /// <reference path="scanner.ts"/>
 
 namespace ts {
@@ -150,6 +151,12 @@ namespace ts {
             type: "boolean",
             description: Diagnostics.Do_not_erase_const_enum_declarations_in_generated_code
         },
+        {
+            name: "pretty",
+            paramType: Diagnostics.KIND,
+            description: Diagnostics.Stylize_errors_and_messages_using_colors_if_available_experimental,
+            type: "boolean"
+        },
         {
             name: "project",
             shortName: "p",
diff --git a/src/compiler/diagnosticMessages.json b/src/compiler/diagnosticMessages.json
index dd7fbe14d6eab..401cbaf8ddaed 100644
--- a/src/compiler/diagnosticMessages.json
+++ b/src/compiler/diagnosticMessages.json
@@ -2258,14 +2258,6 @@
         "code": 6063
     },
 
-    "Specify JSX code generation: 'preserve' or 'react'": {
-        "category": "Message",
-        "code": 6080
-    },
-    "Argument for '--jsx' must be 'preserve' or 'react'.": {
-        "category": "Message",
-        "code": 6081
-    },
     "Enables experimental support for ES7 decorators.": {
         "category": "Message",
         "code": 6065
@@ -2293,8 +2285,8 @@
     "Suppress excess property checks for object literals.": {
         "category": "Message",
         "code": 6072
-    },
-    "Disallow inconsistently-cased references to the same file.": {
+    },
+    "Stylize errors and messages using colors if available. (experimental)": {
         "category": "Message",
         "code": 6073
     },
@@ -2314,6 +2306,20 @@
         "category": "Message",
         "code": 6077
     },
+    "Disallow inconsistently-cased references to the same file.": {
+        "category": "Message",
+        "code": 6078
+    },
+
+    "Specify JSX code generation: 'preserve' or 'react'": {
+        "category": "Message",
+        "code": 6080
+    },
+    "Argument for '--jsx' must be 'preserve' or 'react'.": {
+        "category": "Message",
+        "code": 6081
+    },
+
     "Variable '{0}' implicitly has an '{1}' type.": {
         "category": "Error",
         "code": 7005
diff --git a/src/compiler/sys.ts b/src/compiler/sys.ts
index 3eeb126c065b6..6263f7237f609 100644
--- a/src/compiler/sys.ts
+++ b/src/compiler/sys.ts
@@ -198,6 +198,7 @@ namespace ts {
             const _fs = require("fs");
             const _path = require("path");
             const _os = require("os");
+            const _tty = require("tty");
 
             // average async stat takes about 30 microseconds
             // set chunk size to do 30 files in < 1 millisecond
@@ -375,15 +376,7 @@ namespace ts {
                 newLine: _os.EOL,
                 useCaseSensitiveFileNames: useCaseSensitiveFileNames,
                 write(s: string): void {
-                    const buffer = new Buffer(s, "utf8");
-                    let offset = 0;
-                    let toWrite: number = buffer.length;
-                    let written = 0;
-                    // 1 is a standard descriptor for stdout
-                    while ((written = _fs.writeSync(1, buffer, offset, toWrite)) < toWrite) {
-                        offset += written;
-                        toWrite -= written;
-                    }
+                    process.stdout.write(s);
                 },
                 readFile,
                 writeFile,
diff --git a/src/compiler/tsc.ts b/src/compiler/tsc.ts
index 232360116f34e..083df70be0f76 100644
--- a/src/compiler/tsc.ts
+++ b/src/compiler/tsc.ts
@@ -6,6 +6,14 @@ namespace ts {
         fileWatcher?: FileWatcher;
     }
 
+    let reportDiagnostic = reportDiagnosticSimply;
+
+    function reportDiagnostics(diagnostics: Diagnostic[], host: CompilerHost): void {
+        for (let diagnostic of diagnostics) {
+            reportDiagnostic(diagnostic, host);
+        }
+    }
+
     /**
      * Checks to see if the locale is in the appropriate format,
      * and if it is, attempts to set the appropriate language.
@@ -81,16 +89,16 @@ namespace ts {
         return <string>diagnostic.messageText;
     }
 
-    function reportDiagnostic(diagnostic: Diagnostic, host: CompilerHost) {
+    function reportDiagnosticSimply(diagnostic: Diagnostic, host: CompilerHost): void {
         let output = "";
 
         if (diagnostic.file) {
-            let loc = getLineAndCharacterOfPosition(diagnostic.file, diagnostic.start);
+            const { line, character } = getLineAndCharacterOfPosition(diagnostic.file, diagnostic.start);
             const relativeFileName = host
                 ? convertToRelativePath(diagnostic.file.fileName, host.getCurrentDirectory(), fileName => host.getCanonicalFileName(fileName))
                 : diagnostic.file.fileName;
 
-            output += `${ relativeFileName }(${ loc.line + 1 },${ loc.character + 1 }): `;
+            output += `${ diagnostic.file.fileName }(${ line + 1 },${ character + 1 }): `;
         }
 
         let category = DiagnosticCategory[diagnostic.category].toLowerCase();
@@ -99,10 +107,91 @@ namespace ts {
         sys.write(output);
     }
 
-    function reportDiagnostics(diagnostics: Diagnostic[], host: CompilerHost) {
-        for (let i = 0; i < diagnostics.length; i++) {
-            reportDiagnostic(diagnostics[i], host);
+
+    const redForegroundEscapeSequence = "\u001b[91m";
+    const yellowForegroundEscapeSequence = "\u001b[93m";
+    const blueForegroundEscapeSequence = "\u001b[93m";
+    const gutterStyleSequence = "\u001b[100;30m";
+    const gutterSeparator = " ";
+    const resetEscapeSequence = "\u001b[0m";
+    const elipsis = "...";
+    const categoryFormatMap: Map<string> = {
+        [DiagnosticCategory.Warning]: yellowForegroundEscapeSequence,
+        [DiagnosticCategory.Error]: redForegroundEscapeSequence,
+        [DiagnosticCategory.Message]: blueForegroundEscapeSequence,
+    };
+
+    function formatAndReset(text: string, formatStyle: string) {
+        return formatStyle + text + resetEscapeSequence;
+    }
+
+    function reportDiagnosticWithColorAndContext(diagnostic: Diagnostic, host: CompilerHost): void {
+        let output = "";
+
+        if (diagnostic.file) {
+            let { start, length, file } = diagnostic;
+            let { line: firstLine, character: firstLineChar } = getLineAndCharacterOfPosition(file, start);
+            let { line: lastLine, character: lastLineChar } = getLineAndCharacterOfPosition(file, start + length);
+            const lastLineInFile = getLineAndCharacterOfPosition(file, file.text.length).line;
+
+            let hasMoreThanFiveLines = (lastLine - firstLine) >= 4;
+            let gutterWidth = (lastLine + 1 + "").length;
+            if (hasMoreThanFiveLines) {
+                gutterWidth = Math.max(elipsis.length, gutterWidth);
+            }
+
+            output += sys.newLine;
+            for (let i = firstLine; i <= lastLine; i++) {
+                // If the error spans over 5 lines, we'll only show the first 2 and last 2 lines,
+                // so we'll skip ahead to the second-to-last line.
+                if (hasMoreThanFiveLines && firstLine + 1 < i && i < lastLine - 1) {
+                    output += formatAndReset(padLeft(elipsis, gutterWidth), gutterStyleSequence) + gutterSeparator + sys.newLine;
+                    i = lastLine - 1;
+                }
+
+                let lineStart = getPositionOfLineAndCharacter(file, i, 0);
+                let lineEnd = i < lastLineInFile ? getPositionOfLineAndCharacter(file, i + 1, 0) : file.text.length;
+                let lineContent = file.text.slice(lineStart, lineEnd);
+                lineContent = lineContent.replace(/\s+$/g, "");  // trim from end
+                lineContent = lineContent.replace("\t", " ");    // convert tabs to single spaces
+
+                // Output the gutter and the actual contents of the line.
+                output += formatAndReset(padLeft(i + 1 + "", gutterWidth), gutterStyleSequence) + gutterSeparator;
+                output += lineContent + sys.newLine;
+
+                // Output the gutter and the error span for the line using tildes.
+                output += formatAndReset(padLeft("", gutterWidth), gutterStyleSequence) + gutterSeparator;
+                output += redForegroundEscapeSequence;
+                if (i === firstLine) {
+                    // If we're on the last line, then limit it to the last character of the last line.
+                    // Otherwise, we'll just squiggle the rest of the line, giving 'slice' no end position.
+                    const lastCharForLine = i === lastLine ? lastLineChar : undefined;
+
+                    output += lineContent.slice(0, firstLineChar).replace(/\S/g, " ");
+                    output += lineContent.slice(firstLineChar, lastCharForLine).replace(/./g, "~");
+                }
+                else if (i === lastLine) {
+                    output += lineContent.slice(0, lastLineChar).replace(/./g, "~");
+                }
+                else {
+                    // Squiggle the entire line.
+                    output += lineContent.replace(/./g, "~");
+                }
+                output += resetEscapeSequence;
+
+                output += sys.newLine;
+            }
+
+            output += sys.newLine;
+            output += `${ file.fileName }(${ firstLine + 1 },${ firstLineChar + 1 }): `;
         }
+
+        const categoryColor = categoryFormatMap[diagnostic.category];
+        const category = DiagnosticCategory[diagnostic.category].toLowerCase();
+        output += `${ formatAndReset(category, categoryColor) } TS${ diagnostic.code }: ${ flattenDiagnosticMessageText(diagnostic.messageText, sys.newLine) }`;
+        output += sys.newLine + sys.newLine;
+
+        sys.write(output);
     }
 
     function reportWatchDiagnostic(diagnostic: Diagnostic) {
@@ -288,6 +377,10 @@ namespace ts {
                 compilerHost.fileExists = cachedFileExists;
             }
 
+            if (compilerOptions.pretty) {
+                reportDiagnostic = reportDiagnosticWithColorAndContext;
+            }
+
             // reset the cache of existing files
             cachedExistingFiles = {};
 
diff --git a/src/compiler/tsconfig.json b/src/compiler/tsconfig.json
index fd541a8ca80c1..ca297c087cf0c 100644
--- a/src/compiler/tsconfig.json
+++ b/src/compiler/tsconfig.json
@@ -11,6 +11,7 @@
         "core.ts",
         "sys.ts",
         "types.ts",
+        "diagnosticInformationMap.generated.ts",
         "scanner.ts",
         "parser.ts",
         "utilities.ts",
@@ -19,7 +20,6 @@
         "emitter.ts",
         "program.ts",
         "commandLineParser.ts",
-        "tsc.ts",
-        "diagnosticInformationMap.generated.ts"
+        "tsc.ts"
     ]
 }
diff --git a/src/compiler/types.ts b/src/compiler/types.ts
index 4044f90b9706c..f536a1e469307 100644
--- a/src/compiler/types.ts
+++ b/src/compiler/types.ts
@@ -2087,6 +2087,7 @@ namespace ts {
         outFile?: string;
         outDir?: string;
         preserveConstEnums?: boolean;
+        /* @internal */ pretty?: DiagnosticStyle;
         project?: string;
         removeComments?: boolean;
         rootDir?: string;
@@ -2156,6 +2157,12 @@ namespace ts {
         JSX,
     }
 
+    /* @internal */
+    export const enum DiagnosticStyle {
+        Simple,
+        Pretty,
+    }
+
     export interface ParsedCommandLine {
         options: CompilerOptions;
         fileNames: string[];