diff --git a/src/rebar_base_compiler.erl b/src/rebar_base_compiler.erl
index b4308e5..220cbd5 100644
--- a/src/rebar_base_compiler.erl
+++ b/src/rebar_base_compiler.erl
@@ -116,23 +116,29 @@ compile(Source, Config, CompileFn) ->
         ok ->
             ok;
         skipped ->
-            skipped
+            skipped;
+        Error ->
+            Error
     end.
 
-
 compile_each([], _Config, _CompileFn) ->
     ok;
 compile_each([Source | Rest], Config, CompileFn) ->
     case compile(Source, Config, CompileFn) of
         ok ->
             ?CONSOLE("Compiled ~s\n", [Source]);
+        {ok, Warnings} ->
+            report(Warnings),
+            ?CONSOLE("Compiled ~s\n", [Source]);
         skipped ->
-            ?INFO("Skipped ~s\n", [Source])
+            ?INFO("Skipped ~s\n", [Source]);
+        Error ->
+            maybe_report(Error),
+            ?DEBUG("Compilation failed: ~p\n", [Error]),
+            ?ABORT
     end,
     compile_each(Rest, Config, CompileFn).
 
-
-
 compile_queue([], []) ->
     ok;
 compile_queue(Pids, Targets) ->
@@ -148,9 +154,15 @@ compile_queue(Pids, Targets) ->
             end;
 
         {fail, Error} ->
+            maybe_report(Error),
             ?DEBUG("Worker compilation failed: ~p\n", [Error]),
             ?ABORT;
 
+        {compiled, Source, Warnings} ->
+            report(Warnings),
+            ?CONSOLE("Compiled ~s\n", [Source]),
+            compile_queue(Pids, Targets);
+
         {compiled, Source} ->
             ?CONSOLE("Compiled ~s\n", [Source]),
             compile_queue(Pids, Targets);
@@ -174,6 +186,9 @@ compile_worker(QueuePid, Config, CompileFn) ->
     receive
         {compile, Source} ->
             case catch(compile(Source, Config, CompileFn)) of
+                {ok, Ws} ->
+                    QueuePid ! {compiled, Source, Ws},
+                    compile_worker(QueuePid, Config, CompileFn);
                 ok ->
                     QueuePid ! {compiled, Source},
                     compile_worker(QueuePid, Config, CompileFn);
@@ -189,3 +204,14 @@ compile_worker(QueuePid, Config, CompileFn) ->
         empty ->
             ok
     end.
+
+maybe_report([{error, {error, _Es, _Ws}=ErrorsAndWarnings}, {source, _}]) ->
+    maybe_report(ErrorsAndWarnings);
+maybe_report({error, Es, Ws}) ->
+    report(Es),
+    report(Ws);
+maybe_report(_) ->
+    ok.
+
+report(Messages) ->
+    lists:foreach(fun(Msg) -> io:format("~s~n", [Msg]) end, Messages).
diff --git a/src/rebar_core.erl b/src/rebar_core.erl
index 9abd233..99d3c38 100644
--- a/src/rebar_core.erl
+++ b/src/rebar_core.erl
@@ -119,17 +119,6 @@ process_dir(Dir, ParentConfig, Command, DirSet) ->
             DirSet;
 
         true ->
-            AbsDir = filename:absname(Dir),
-            ShouldPrintDir = not (is_skip_dir(Dir)
-                                  orelse processing_base_dir(Dir)),
-
-            case ShouldPrintDir of
-                true ->
-                    ?CONSOLE("==> Entering directory `~s'\n", [AbsDir]);
-                _ ->
-                    ok
-            end,
-
             ok = file:set_cwd(Dir),
             Config = maybe_load_local_config(Dir, ParentConfig),
 
@@ -144,17 +133,8 @@ process_dir(Dir, ParentConfig, Command, DirSet) ->
             %% to process this dir.
             {ok, AvailModuleSets} = application:get_env(rebar, modules),
             ModuleSet = choose_module_set(AvailModuleSets, Dir),
-            Res = maybe_process_dir(ModuleSet, Config, CurrentCodePath,
-                                    Dir, Command, DirSet),
-
-            case ShouldPrintDir of
-                true ->
-                    ?CONSOLE("==> Leaving directory `~s'\n", [AbsDir]);
-                false ->
-                    ok
-            end,
-
-            Res
+            maybe_process_dir(ModuleSet, Config, CurrentCodePath,
+                              Dir, Command, DirSet)
     end.
 
 maybe_process_dir({[], undefined}=ModuleSet, Config, CurrentCodePath,
diff --git a/src/rebar_erlc_compiler.erl b/src/rebar_erlc_compiler.erl
index 30db023..acb8491 100644
--- a/src/rebar_erlc_compiler.erl
+++ b/src/rebar_erlc_compiler.erl
@@ -257,17 +257,32 @@ internal_erl_compile(Source, Config, Outdir, ErlOpts) ->
     case needs_compile(Source, Target, Hrls) of
         true ->
             Opts = [{outdir, filename:dirname(Target)}] ++
-                ErlOpts ++ [{i, "include"}, report],
+                ErlOpts ++ [{i, "include"}, return],
             case compile:file(Source, Opts) of
-                {ok, _} ->
+                {ok, _Mod} ->
                     ok;
-                _ ->
-                    ?ABORT
+                {ok, _Mod, Ws} ->
+                    {ok, format_errors(Source, "Warning: ", Ws)};
+                {error, Es, Ws} ->
+                    {error, format_errors(Source, Es),
+                     format_errors(Source, "Warning: ", Ws)}
             end;
         false ->
             skipped
     end.
 
+format_errors(Source, Errors) ->
+    format_errors(Source, "", Errors).
+
+format_errors(Source, Extra, Errors) ->
+    AbsSource = filename:absname(Source),
+    [lists:append([format_error(AbsSource, Extra, Desc) || Desc <- Descs])
+     || {_, Descs} <- Errors].
+
+format_error(AbsSource, Extra, {Line, Mod, Desc}) ->
+    ErrorDesc = Mod:format_error(Desc),
+    ?FMT("~s:~b: ~s~s", [AbsSource, Line, Extra, ErrorDesc]).
+
 -spec compile_mib(Source::file:filename(), Target::file:filename(),
                   Config::rebar_config:config()) -> 'ok'.
 compile_mib(Source, Target, Config) ->