diff --git a/Library/Homebrew/formula.rb b/Library/Homebrew/formula.rb
index 0693634f5b..11a90a91b9 100644
--- a/Library/Homebrew/formula.rb
+++ b/Library/Homebrew/formula.rb
@@ -142,7 +142,7 @@ class Formula
   def kext_prefix; prefix+'Library/Extensions' end
 
   # configuration needs to be preserved past upgrades
-  def etc; HOMEBREW_PREFIX+'etc' end
+  def etc; HOMEBREW_GIT_ETC ? prefix+'etc' : HOMEBREW_PREFIX+'etc' end
   # generally we don't want var stuff inside the keg
   def var; HOMEBREW_PREFIX+'var' end
 
diff --git a/Library/Homebrew/formula_installer.rb b/Library/Homebrew/formula_installer.rb
index 789e3b5aa3..b2de046d0b 100644
--- a/Library/Homebrew/formula_installer.rb
+++ b/Library/Homebrew/formula_installer.rb
@@ -71,6 +71,58 @@ class FormulaInstaller
     raise
   end
 
+  def git_etc_preinstall
+    return unless quiet_system 'git', '--version'
+
+    etc = HOMEBREW_PREFIX+'etc'
+    etc.cd do
+      quiet_system 'git', 'init' unless (etc+'.git').directory?
+      quiet_system 'git', 'checkout', '-B', "#{f.name}-last"
+      system 'git', 'add', '.'
+      system 'git', 'commit', '-m', "#{f.name}-#{f.version}: preinstall"
+    end
+  end
+
+  def git_etc_postinstall
+    return unless quiet_system 'git', '--version'
+
+    etc = HOMEBREW_PREFIX+'etc'
+    keg_etc_files = Dir[f.etc+'*']
+    last_branch = "#{f.name}-last"
+    default_branch = "#{f.name}-default"
+    merged = false
+    etc.cd do
+      FileUtils.cp_r keg_etc_files, etc
+
+      system 'git', 'add', '.'
+      if quiet_system 'git', 'diff', '--exit-code', default_branch
+        quiet_system 'git', 'reset', '--hard'
+      else
+        if quiet_system 'git', 'rev-parse', 'master'
+          quiet_system 'git', 'checkout', '-f', 'master'
+          FileUtils.cp_r keg_etc_files, etc
+          quiet_system 'git', 'add', '.'
+        else
+          quiet_system 'git', 'checkout', '-b' 'master'
+        end
+        system 'git', 'commit', '-m', "#{f.name}-#{f.version}: default"
+        quiet_system 'git', 'branch', '-f', default_branch
+
+        merged = true unless quiet_system 'git' 'merge-base', '--is-ancestor',
+                                          last_branch, 'master'
+        system 'git', 'merge', '--no-ff', '--no-edit',
+               '-X', 'theirs', last_branch
+      end
+
+      if merged
+        ohai "Configuration Files"
+        puts "Your configuration files for #{f.name} in etc were merged:"
+        puts "To reverse this merge: git reset --hard #{last_branch}"
+        puts "To restore defaults:   git reset --hard #{default_branch}"
+      end
+    end
+  end
+
   def install
     # not in initialize so upgrade can unlink the active keg before calling this
     # function but after instantiating this class so that it can avoid having to
@@ -110,7 +162,10 @@ class FormulaInstaller
 
     @@attempted << f
 
+    git_etc_preinstall if HOMEBREW_GIT_ETC
+
     @poured_bottle = false
+
     begin
       if pour_bottle? true
         pour
@@ -136,6 +191,8 @@ class FormulaInstaller
       opoo "#{f.name} post_install failed. Rerun with `brew postinstall #{f.name}`."
     end
 
+    git_etc_postinstall if HOMEBREW_GIT_ETC
+
     opoo "Nothing was installed to #{f.prefix}" unless f.installed?
   end
 
diff --git a/Library/Homebrew/global.rb b/Library/Homebrew/global.rb
index 18934c6ca8..52e9149e59 100644
--- a/Library/Homebrew/global.rb
+++ b/Library/Homebrew/global.rb
@@ -84,6 +84,8 @@ HOMEBREW_USER_AGENT = "Homebrew #{HOMEBREW_VERSION} (Ruby #{RUBY_VERSION}-#{RUBY
 
 HOMEBREW_CURL_ARGS = '-f#LA'
 
+HOMEBREW_GIT_ETC = !ENV['HOMEBREW_GIT_ETC'].nil?
+
 module Homebrew extend self
   include FileUtils
 
diff --git a/Library/Homebrew/keg.rb b/Library/Homebrew/keg.rb
index 4a3fd2dddc..6a1784acfd 100644
--- a/Library/Homebrew/keg.rb
+++ b/Library/Homebrew/keg.rb
@@ -114,7 +114,7 @@ class Keg < Pathname
 
     # yeah indeed, you have to force anything you need in the main tree into
     # these dirs REMEMBER that *NOT* everything needs to be in the main tree
-    link_dir('etc', mode) {:mkpath}
+    link_dir('etc', mode) {:mkpath} unless HOMEBREW_GIT_ETC
     link_dir('bin', mode) {:skip_dir}
     link_dir('sbin', mode) {:skip_dir}
     link_dir('include', mode) {:link}
diff --git a/Library/Homebrew/test/testing_env.rb b/Library/Homebrew/test/testing_env.rb
index 9bc5d871fb..e9532bb963 100644
--- a/Library/Homebrew/test/testing_env.rb
+++ b/Library/Homebrew/test/testing_env.rb
@@ -25,6 +25,7 @@ HOMEBREW_USER_AGENT    = 'Homebrew'
 HOMEBREW_WWW           = 'http://example.com'
 HOMEBREW_CURL_ARGS     = '-fsLA'
 HOMEBREW_VERSION       = '0.9-test'
+HOMEBREW_GIT_ETC       = false
 
 RUBY_BIN = Pathname.new(RbConfig::CONFIG['bindir'])
 RUBY_PATH = RUBY_BIN + RbConfig::CONFIG['ruby_install_name'] + RbConfig::CONFIG['EXEEXT']