diff --git a/Library/Homebrew/cmd/update.rb b/Library/Homebrew/cmd/update.rb
index 4e29221ac4..b78aacf1b1 100644
--- a/Library/Homebrew/cmd/update.rb
+++ b/Library/Homebrew/cmd/update.rb
@@ -425,10 +425,33 @@ class Report
 
   def dump_formula_report(key, title)
     formula = select_formula(key)
-    formula.map! { |oldname, newname| "#{oldname} -> #{newname}" } if key == :R
     unless formula.empty?
+      # Determine list item indices of installed formulae.
+      formula_installed_index = formula.each_index.select do |index|
+        name, newname = formula[index]
+        installed?(name) || (newname && installed?(newname))
+      end
+
+      # Format list items of renamed formulae.
+      if key == :R
+        formula.map! { |oldname, newname| "#{oldname} -> #{newname}" }
+      end
+
+      # Append suffix '(installed)' to list items of installed formulae.
+      formula_installed_index.each do |index|
+        formula[index] += " (installed)"
+      end
+
+      # Fetch list items of installed formulae for highlighting.
+      formula_installed = formula.values_at(*formula_installed_index)
+
+      # Dump formula list.
       ohai title
-      puts_columns formula
+      puts_columns(formula, formula_installed)
     end
   end
+
+  def installed?(formula)
+    (HOMEBREW_CELLAR/formula.split("/").last).directory?
+  end
 end