diff --git a/Library/Homebrew/build.rb b/Library/Homebrew/build.rb
index fe39a709d1..85ff88705b 100755
--- a/Library/Homebrew/build.rb
+++ b/Library/Homebrew/build.rb
@@ -13,6 +13,7 @@ at_exit do
 end
 
 require 'global'
+require 'debrew' if ARGV.debug?
 
 def main
   # The main Homebrew process expects to eventually see EOF on the error
@@ -42,6 +43,7 @@ def main
   install(Formula.factory($0))
 rescue Exception => e
   unless error_pipe.nil?
+    e.continuation = nil if ARGV.debug?
     Marshal.dump(e, error_pipe)
     error_pipe.close
     exit! 1
@@ -130,7 +132,16 @@ def install f
       interactive_shell f
     else
       f.prefix.mkpath
-      f.install
+
+      begin
+        f.install
+      rescue Exception => e
+        if ARGV.debug?
+          debrew e, f
+        else
+          raise e
+        end
+      end
 
       # Find and link metafiles
       FORMULA_META_FILES.each do |filename|
diff --git a/Library/Homebrew/debrew.rb b/Library/Homebrew/debrew.rb
new file mode 100644
index 0000000000..93fabfc52b
--- /dev/null
+++ b/Library/Homebrew/debrew.rb
@@ -0,0 +1,163 @@
+require 'irb'
+begin
+  require 'continuation' # needed on 1.9
+rescue LoadError
+end
+
+class Menu
+  attr_accessor :prompt
+  attr_accessor :entries
+
+  def initialize
+    @entries = []
+  end
+
+  def choice(name, &action)
+    entries << { :name => name, :action => action }
+  end
+end
+
+def choose
+  menu = Menu.new
+  yield menu
+
+  choice = nil
+  while choice.nil?
+    menu.entries.each_with_index do |entry, i|
+      puts "#{i+1}. #{entry[:name]}"
+    end
+    puts menu.prompt unless menu.prompt.nil?
+    reply = $stdin.gets.chomp
+
+    i = reply.to_i
+    if i > 0
+      choice = menu.entries[i-1]
+    else
+      possible = menu.entries.find_all {|e| e[:name].to_s.start_with? reply }
+      case possible.size
+        when 0 then puts "No such option"
+        when 1 then choice = possible.first
+        else puts "Multiple options match: #{possible.map{|e| e[:name]}.join(' ')}"
+      end
+    end
+  end
+  choice[:action].call
+end
+
+
+module IRB
+  @setup_done = false
+
+  def IRB.start_within(binding)
+    unless @setup_done
+      # make IRB ignore our command line arguments
+      saved_args = ARGV.shift(ARGV.size)
+      IRB.setup(nil)
+      ARGV.concat(saved_args)
+      @setup_done = true
+    end
+
+    workspace = WorkSpace.new(binding)
+    irb = Irb.new(workspace)
+
+    @CONF[:IRB_RC].call(irb.context) if @CONF[:IRB_RC]
+    @CONF[:MAIN_CONTEXT] = irb.context
+
+    trap("SIGINT") do
+      irb.signal_handle
+    end
+
+    begin
+      catch(:IRB_EXIT) do
+        irb.eval_input
+      end
+    ensure
+      irb_at_exit
+    end
+  end
+end
+
+class Exception
+  attr_accessor :continuation
+
+  def restart(&block)
+    continuation.call block
+  end
+end
+
+def has_debugger?
+  begin
+    require 'rubygems'
+    require 'ruby-debug'
+    true
+  rescue LoadError
+    false
+  end
+end
+
+def debrew(exception, formula=nil)
+  puts "#{exception.backtrace.first}"
+  puts "#{Tty.red}#{exception.class.to_s}#{Tty.reset}: #{exception.to_s}"
+
+  begin
+    again = false
+    choose do |menu|
+      menu.prompt = "Choose an action:"
+      menu.choice(:raise) { original_raise exception }
+      menu.choice(:ignore) { exception.restart }
+      menu.choice(:backtrace) { puts exception.backtrace; again = true }
+      menu.choice(:debug) do
+        puts "When you exit the debugger, execution will continue."
+        exception.restart { debugger }
+      end if has_debugger?
+      menu.choice(:irb) do
+        puts "When you exit this IRB session, execution will continue."
+        exception.restart do
+          # we need to capture the binding after returning from raise
+          set_trace_func proc { |event, file, line, id, binding, classname|
+            if event == 'return'
+              set_trace_func nil
+              IRB.start_within(binding)
+            end
+          }
+        end
+      end
+      menu.choice(:shell) do
+        puts "When you exit this shell, you will return to the menu."
+        interactive_shell formula
+        again=true
+      end
+    end
+  end while again
+end
+
+module RaisePlus
+  alias :original_raise :raise
+
+  def raise(*args)
+    exception = case
+      when args.size == 0 then ($!.nil? ? RuntimeError.exception : $!)
+      when (args.size == 1 and args[0].is_a?(String)) then RuntimeError.exception(args[0])
+      else args[0].exception(args[1]) # this does the right thing if args[1] is missing
+    end
+    # passing something other than a String or Exception is illegal, but if someone does it anyway,
+    # that object won't have backtrace or continuation methods. in that case, let's pass it on to
+    # the original raise, which will reject it
+    return super exception unless exception.is_a?(Exception)
+
+    # keep original backtrace if reraising
+    exception.set_backtrace(args.size >= 3 ? args[2] : caller) if exception.backtrace.nil?
+
+    blk = callcc do |cc|
+      exception.continuation = cc
+      super exception
+    end
+    blk.call unless blk.nil?
+  end
+
+  alias :fail :raise
+end
+
+class Object
+  include RaisePlus
+end
diff --git a/Library/Homebrew/formula.rb b/Library/Homebrew/formula.rb
index 4339c471d9..76d1d271f2 100644
--- a/Library/Homebrew/formula.rb
+++ b/Library/Homebrew/formula.rb
@@ -224,21 +224,10 @@ class Formula
         # so load any deps before this point! And exit asap afterwards
         yield self
       rescue RuntimeError, SystemCallError => e
-        if not ARGV.debug?
-          %w(config.log CMakeCache.txt).each do |fn|
-            (HOMEBREW_LOGS/name).install(fn) if File.file?(fn)
-          end
-          raise
+        %w(config.log CMakeCache.txt).each do |fn|
+          (HOMEBREW_LOGS/name).install(fn) if File.file?(fn)
         end
-
-        onoe e.inspect
-        puts e.backtrace unless e.kind_of? BuildError
-        ohai "Rescuing build..."
-        puts "When you exit this shell Homebrew will attempt to finalise the installation."
-        puts "If nothing is installed or the shell exits with a non-zero error code,"
-        puts "Homebrew will abort. The installation prefix is:"
-        puts prefix
-        interactive_shell self
+        raise
       end
     end
   end