diff --git a/cmd/compose/up.go b/cmd/compose/up.go
index 9fed9951a4..084e010fad 100644
--- a/cmd/compose/up.go
+++ b/cmd/compose/up.go
@@ -24,11 +24,10 @@ import (
 	"strings"
 	"time"
 
-	xprogress "github.com/moby/buildkit/util/progress/progressui"
-
 	"github.com/compose-spec/compose-go/v2/types"
 	"github.com/docker/cli/cli/command"
 	"github.com/docker/compose/v2/cmd/formatter"
+	xprogress "github.com/moby/buildkit/util/progress/progressui"
 	"github.com/spf13/cobra"
 
 	"github.com/docker/compose/v2/pkg/api"
@@ -55,6 +54,7 @@ type upOptions struct {
 	timestamp          bool
 	wait               bool
 	waitTimeout        int
+	watch              bool
 }
 
 func (opts upOptions) apply(project *types.Project, services []string) (*types.Project, error) {
@@ -126,6 +126,7 @@ func upCommand(p *ProjectOptions, dockerCli command.Cli, backend api.Service) *c
 	flags.BoolVar(&up.attachDependencies, "attach-dependencies", false, "Automatically attach to log output of dependent services")
 	flags.BoolVar(&up.wait, "wait", false, "Wait for services to be running|healthy. Implies detached mode.")
 	flags.IntVar(&up.waitTimeout, "wait-timeout", 0, "Maximum duration to wait for the project to be running|healthy")
+	flags.BoolVarP(&up.watch, "watch", "w", false, "Watch source code and rebuild/refresh containers when files are updated.")
 
 	return upCmd
 }
@@ -257,6 +258,7 @@ func runUp(
 			CascadeStop:  upOptions.cascadeStop,
 			Wait:         upOptions.wait,
 			WaitTimeout:  timeout,
+			Watch:        upOptions.watch,
 			Services:     services,
 		},
 	})
diff --git a/cmd/compose/watch.go b/cmd/compose/watch.go
index e4f9427263..880711a205 100644
--- a/cmd/compose/watch.go
+++ b/cmd/compose/watch.go
@@ -21,6 +21,7 @@ import (
 	"fmt"
 
 	"github.com/compose-spec/compose-go/v2/types"
+	"github.com/docker/compose/v2/cmd/formatter"
 
 	"github.com/docker/cli/cli/command"
 	"github.com/docker/compose/v2/internal/locker"
@@ -31,8 +32,7 @@ import (
 
 type watchOptions struct {
 	*ProjectOptions
-	quiet bool
-	noUp  bool
+	noUp bool
 }
 
 func watchCommand(p *ProjectOptions, dockerCli command.Cli, backend api.Service) *cobra.Command {
@@ -57,7 +57,7 @@ func watchCommand(p *ProjectOptions, dockerCli command.Cli, backend api.Service)
 		ValidArgsFunction: completeServiceNames(dockerCli, p),
 	}
 
-	cmd.Flags().BoolVar(&watchOpts.quiet, "quiet", false, "hide build output")
+	cmd.Flags().BoolVar(&buildOpts.quiet, "quiet", false, "hide build output")
 	cmd.Flags().BoolVar(&watchOpts.noUp, "no-up", false, "Do not build & start services before watching")
 	return cmd
 }
@@ -101,7 +101,7 @@ func runWatch(ctx context.Context, dockerCli command.Cli, backend api.Service, w
 				Recreate:             api.RecreateDiverged,
 				RecreateDependencies: api.RecreateNever,
 				Inherit:              true,
-				QuietPull:            watchOpts.quiet,
+				QuietPull:            buildOpts.quiet,
 			},
 			Start: api.StartOptions{
 				Project:     project,
@@ -114,7 +114,10 @@ func runWatch(ctx context.Context, dockerCli command.Cli, backend api.Service, w
 			return err
 		}
 	}
+
+	consumer := formatter.NewLogConsumer(ctx, dockerCli.Out(), dockerCli.Err(), false, false, false)
 	return backend.Watch(ctx, project, services, api.WatchOptions{
-		Build: build,
+		Build: &build,
+		LogTo: consumer,
 	})
 }
diff --git a/cmd/formatter/logs.go b/cmd/formatter/logs.go
index c6b8baa320..465aa229a9 100644
--- a/cmd/formatter/logs.go
+++ b/cmd/formatter/logs.go
@@ -62,7 +62,11 @@ func (l *logConsumer) Register(name string) {
 func (l *logConsumer) register(name string) *presenter {
 	cf := monochrome
 	if l.color {
-		cf = nextColor()
+		if name == api.WatchLogger {
+			cf = makeColorFunc("92")
+		} else {
+			cf = nextColor()
+		}
 	}
 	p := &presenter{
 		colors: cf,
@@ -138,5 +142,9 @@ type presenter struct {
 }
 
 func (p *presenter) setPrefix(width int) {
+	if p.name == api.WatchLogger {
+		p.prefix = p.colors(strings.Repeat(" ", width) + " ⦿ ")
+		return
+	}
 	p.prefix = p.colors(fmt.Sprintf("%-"+strconv.Itoa(width)+"s | ", p.name))
 }
diff --git a/docs/reference/compose_up.md b/docs/reference/compose_up.md
index 38d678d00f..a34766c484 100644
--- a/docs/reference/compose_up.md
+++ b/docs/reference/compose_up.md
@@ -32,6 +32,7 @@ Create and start containers
 | `--timestamps`               |               |          | Show timestamps                                                                                         |
 | `--wait`                     |               |          | Wait for services to be running\|healthy. Implies detached mode.                                        |
 | `--wait-timeout`             | `int`         | `0`      | Maximum duration to wait for the project to be running\|healthy                                         |
+| `-w`, `--watch`              |               |          | Watch source code and rebuild/refresh containers when files are updated.                                |
 
 
 <!---MARKER_GEN_END-->
diff --git a/docs/reference/docker_compose_up.yaml b/docs/reference/docker_compose_up.yaml
index 0ed06a09b2..ec269c8b85 100644
--- a/docs/reference/docker_compose_up.yaml
+++ b/docs/reference/docker_compose_up.yaml
@@ -274,6 +274,18 @@ options:
       experimentalcli: false
       kubernetes: false
       swarm: false
+    - option: watch
+      shorthand: w
+      value_type: bool
+      default_value: "false"
+      description: |
+        Watch source code and rebuild/refresh containers when files are updated.
+      deprecated: false
+      hidden: false
+      experimental: false
+      experimentalcli: false
+      kubernetes: false
+      swarm: false
 inherited_options:
     - option: dry-run
       value_type: bool
diff --git a/pkg/api/api.go b/pkg/api/api.go
index 3b8f091611..8be16449ef 100644
--- a/pkg/api/api.go
+++ b/pkg/api/api.go
@@ -116,9 +116,13 @@ type VizOptions struct {
 	Indentation string
 }
 
+// WatchLogger is a reserved name to log watch events
+const WatchLogger = "#watch"
+
 // WatchOptions group options of the Watch API
 type WatchOptions struct {
-	Build BuildOptions
+	Build *BuildOptions
+	LogTo LogConsumer
 }
 
 // BuildOptions group options of the Build API
@@ -216,6 +220,7 @@ type StartOptions struct {
 	WaitTimeout time.Duration
 	// Services passed in the command line to be started
 	Services []string
+	Watch    bool
 }
 
 // RestartOptions group options of the Restart API
diff --git a/pkg/compose/build.go b/pkg/compose/build.go
index 41a5920d2b..8dacba1ba4 100644
--- a/pkg/compose/build.go
+++ b/pkg/compose/build.go
@@ -127,6 +127,9 @@ func (s *composeService) build(ctx context.Context, project *types.Project, opti
 		progressCtx, cancel := context.WithCancel(context.Background())
 		defer cancel()
 
+		if options.Quiet {
+			options.Progress = progress.ModeQuiet
+		}
 		w, err = xprogress.NewPrinter(progressCtx, os.Stdout, progressui.DisplayMode(options.Progress),
 			xprogress.WithDesc(
 				fmt.Sprintf("building with %q instance using %s driver", b.Name, b.Driver),
diff --git a/pkg/compose/up.go b/pkg/compose/up.go
index c1dafb5947..b91a4ef73d 100644
--- a/pkg/compose/up.go
+++ b/pkg/compose/up.go
@@ -125,6 +125,15 @@ func (s *composeService) Up(ctx context.Context, project *types.Project, options
 		return err
 	})
 
+	if options.Start.Watch {
+		eg.Go(func() error {
+			return s.Watch(ctx, project, options.Start.Services, api.WatchOptions{
+				Build: options.Create.Build,
+				LogTo: options.Start.Attach,
+			})
+		})
+	}
+
 	// We don't use parent (cancelable) context as we manage sigterm to stop the stack
 	err = s.start(context.Background(), project.Name, options.Start, printer.HandleEvent)
 	if err != nil && !isTerminated { // Ignore error if the process is terminated
diff --git a/pkg/compose/watch.go b/pkg/compose/watch.go
index 2e783026e1..dca4d7c153 100644
--- a/pkg/compose/watch.go
+++ b/pkg/compose/watch.go
@@ -76,6 +76,7 @@ func (s *composeService) Watch(ctx context.Context, project *types.Project, serv
 	}
 	eg, ctx := errgroup.WithContext(ctx)
 	watching := false
+	options.LogTo.Register(api.WatchLogger)
 	for i := range project.Services {
 		service := project.Services[i]
 		config, err := loadDevelopmentConfig(service, project)
@@ -91,9 +92,15 @@ func (s *composeService) Watch(ctx context.Context, project *types.Project, serv
 			continue
 		}
 
-		if len(config.Watch) > 0 && service.Build == nil {
-			// service configured with watchers but no build section
-			return fmt.Errorf("can't watch service %q without a build context", service.Name)
+		for _, trigger := range config.Watch {
+			if trigger.Action == types.WatchActionRebuild {
+				if service.Build == nil {
+					return fmt.Errorf("can't watch service %q with action %s without a build context", service.Name, types.WatchActionRebuild)
+				}
+				if options.Build == nil {
+					return fmt.Errorf("--no-build is incompatible with watch action %s in service %s", types.WatchActionRebuild, service.Name)
+				}
+			}
 		}
 
 		if len(services) > 0 && service.Build == nil {
@@ -142,9 +149,7 @@ func (s *composeService) Watch(ctx context.Context, project *types.Project, serv
 			return err
 		}
 
-		fmt.Fprintf(
-			s.stdinfo(),
-			"Watch configuration for service %q:%s\n",
+		logrus.Debugf("Watch configuration for service %q:%s\n",
 			service.Name,
 			strings.Join(append([]string{""}, pathLogs...), "\n  - "),
 		)
@@ -163,6 +168,7 @@ func (s *composeService) Watch(ctx context.Context, project *types.Project, serv
 	if !watching {
 		return fmt.Errorf("none of the selected services is configured for watch, consider setting an 'develop' section")
 	}
+	options.LogTo.Log(api.WatchLogger, "watch enabled")
 
 	return eg.Wait()
 }
@@ -190,7 +196,7 @@ func (s *composeService) watch(ctx context.Context, project *types.Project, name
 			case batch := <-batchEvents:
 				start := time.Now()
 				logrus.Debugf("batch start: service[%s] count[%d]", name, len(batch))
-				if err := s.handleWatchBatch(ctx, project, name, options.Build, batch, syncer); err != nil {
+				if err := s.handleWatchBatch(ctx, project, name, options, batch, syncer); err != nil {
 					logrus.Warnf("Error handling changed files for service %s: %v", name, err)
 				}
 				logrus.Debugf("batch complete: service[%s] duration[%s] count[%d]",
@@ -431,32 +437,38 @@ func (t tarDockerClient) Untar(ctx context.Context, id string, archive io.ReadCl
 	})
 }
 
-func (s *composeService) handleWatchBatch(ctx context.Context, project *types.Project, serviceName string, build api.BuildOptions, batch []fileEvent, syncer sync.Syncer) error {
+func (s *composeService) handleWatchBatch(ctx context.Context, project *types.Project, serviceName string, options api.WatchOptions, batch []fileEvent, syncer sync.Syncer) error {
 	pathMappings := make([]sync.PathMapping, len(batch))
 	restartService := false
 	for i := range batch {
 		if batch[i].Action == types.WatchActionRebuild {
-			fmt.Fprintf(
-				s.stdinfo(),
-				"Rebuilding service %q after changes were detected:%s\n",
-				serviceName,
-				strings.Join(append([]string{""}, batch[i].HostPath), "\n  - "),
-			)
+			options.LogTo.Log(api.WatchLogger, fmt.Sprintf("Rebuilding service %q after changes were detected...", serviceName))
 			// restrict the build to ONLY this service, not any of its dependencies
-			build.Services = []string{serviceName}
-			err := s.Up(ctx, project, api.UpOptions{
-				Create: api.CreateOptions{
-					Build:    &build,
-					Services: []string{serviceName},
-					Inherit:  true,
-				},
-				Start: api.StartOptions{
-					Services: []string{serviceName},
-					Project:  project,
-				},
+			options.Build.Services = []string{serviceName}
+			options.Build.Quiet = true
+			_, err := s.build(ctx, project, *options.Build, nil)
+			if err != nil {
+				options.LogTo.Log(api.WatchLogger, fmt.Sprintf("Build failed. Error: %v", err))
+				return err
+			}
+			options.LogTo.Log(api.WatchLogger, fmt.Sprintf("service %q successfully built", serviceName))
+
+			err = s.create(ctx, project, api.CreateOptions{
+				Services: []string{serviceName},
+				Inherit:  true,
+				Recreate: api.RecreateForce,
 			})
 			if err != nil {
-				fmt.Fprintf(s.stderr(), "Application failed to start after update. Error: %v\n", err)
+				options.LogTo.Log(api.WatchLogger, fmt.Sprintf("Failed to recreate service after update. Error: %v", err))
+				return err
+			}
+
+			err = s.start(ctx, project.Name, api.StartOptions{
+				Project:  project,
+				Services: []string{serviceName},
+			}, nil)
+			if err != nil {
+				options.LogTo.Log(api.WatchLogger, fmt.Sprintf("Application failed to start after update. Error: %v", err))
 			}
 			return nil
 		}
@@ -466,7 +478,7 @@ func (s *composeService) handleWatchBatch(ctx context.Context, project *types.Pr
 		pathMappings[i] = batch[i].PathMapping
 	}
 
-	writeWatchSyncMessage(s.stdinfo(), serviceName, pathMappings)
+	writeWatchSyncMessage(options.LogTo, serviceName, pathMappings)
 
 	service, err := project.GetService(serviceName)
 	if err != nil {
@@ -486,29 +498,19 @@ func (s *composeService) handleWatchBatch(ctx context.Context, project *types.Pr
 }
 
 // writeWatchSyncMessage prints out a message about the sync for the changed paths.
-func writeWatchSyncMessage(w io.Writer, serviceName string, pathMappings []sync.PathMapping) {
+func writeWatchSyncMessage(log api.LogConsumer, serviceName string, pathMappings []sync.PathMapping) {
 	const maxPathsToShow = 10
 	if len(pathMappings) <= maxPathsToShow || logrus.IsLevelEnabled(logrus.DebugLevel) {
 		hostPathsToSync := make([]string, len(pathMappings))
 		for i := range pathMappings {
 			hostPathsToSync[i] = pathMappings[i].HostPath
 		}
-		fmt.Fprintf(
-			w,
-			"Syncing %q after changes were detected:%s\n",
-			serviceName,
-			strings.Join(append([]string{""}, hostPathsToSync...), "\n  - "),
-		)
+		log.Log(api.WatchLogger, fmt.Sprintf("Syncing %q after changes were detected", serviceName))
 	} else {
 		hostPathsToSync := make([]string, len(pathMappings))
 		for i := range pathMappings {
 			hostPathsToSync[i] = pathMappings[i].HostPath
 		}
-		fmt.Fprintf(
-			w,
-			"Syncing service %q after %d changes were detected\n",
-			serviceName,
-			len(pathMappings),
-		)
+		log.Log(api.WatchLogger, fmt.Sprintf("Syncing service %q after %d changes were detected", serviceName, len(pathMappings)))
 	}
 }
diff --git a/pkg/compose/watch_test.go b/pkg/compose/watch_test.go
index fc39ee7d34..39fbf2bcb2 100644
--- a/pkg/compose/watch_test.go
+++ b/pkg/compose/watch_test.go
@@ -16,6 +16,7 @@ package compose
 
 import (
 	"context"
+	"fmt"
 	"os"
 	"testing"
 	"time"
@@ -91,10 +92,29 @@ func (t testWatcher) Errors() chan error {
 	return t.errors
 }
 
+type stdLogger struct{}
+
+func (s stdLogger) Log(containerName, message string) {
+	fmt.Printf("%s: %s\n", containerName, message)
+}
+
+func (s stdLogger) Err(containerName, message string) {
+	fmt.Fprintf(os.Stderr, "%s: %s\n", containerName, message)
+}
+
+func (s stdLogger) Status(container, msg string) {
+	fmt.Printf("%s: %s\n", container, msg)
+}
+
+func (s stdLogger) Register(container string) {
+
+}
+
 func TestWatch_Sync(t *testing.T) {
 	mockCtrl := gomock.NewController(t)
 	cli := mocks.NewMockCli(mockCtrl)
 	cli.EXPECT().Err().Return(os.Stderr).AnyTimes()
+	cli.EXPECT().BuildKitEnabled().Return(true, nil)
 	apiClient := mocks.NewMockAPIClient(mockCtrl)
 	apiClient.EXPECT().ContainerList(gomock.Any(), gomock.Any()).Return([]moby.Container{
 		testContainer("test", "123", false),
@@ -124,7 +144,10 @@ func TestWatch_Sync(t *testing.T) {
 			dockerCli: cli,
 			clock:     clock,
 		}
-		err := service.watch(ctx, &proj, "test", api.WatchOptions{}, watcher, syncer, []types.Trigger{
+		err := service.watch(ctx, &proj, "test", api.WatchOptions{
+			Build: &api.BuildOptions{},
+			LogTo: stdLogger{},
+		}, watcher, syncer, []types.Trigger{
 			{
 				Path:   "/sync",
 				Action: "sync",