diff --git a/src/Watcher.zig b/src/Watcher.zig
index c62a9aab0f..5cb78f9244 100644
--- a/src/Watcher.zig
+++ b/src/Watcher.zig
@@ -4,6 +4,7 @@ const Watcher = @This();
 
 const DebugLogScope = bun.Output.Scoped(.watcher, .visible);
 const log = DebugLogScope.log;
+const WatcherTrace = @import("./watcher/WatcherTrace.zig");
 
 // This will always be [max_count]WatchEvent,
 // We avoid statically allocating because it increases the binary size.
@@ -95,9 +96,18 @@ pub fn init(comptime T: type, ctx: *T, fs: *bun.fs.FileSystem, allocator: std.me
 
     try Platform.init(&watcher.platform, fs.top_level_dir);
 
+    // Initialize trace file if BUN_WATCHER_TRACE env var is set
+    WatcherTrace.init();
+
     return watcher;
 }
 
+/// Write trace events to the trace file if enabled.
+/// This runs on the watcher thread, so no locking is needed.
+pub fn writeTraceEvents(this: *Watcher, events: []WatchEvent, changed_files: []?[:0]u8) void {
+    WatcherTrace.writeEvents(this, events, changed_files);
+}
+
 pub fn start(this: *Watcher) !void {
     bun.assert(this.watchloop_handle == null);
     this.thread = try std.Thread.spawn(.{}, threadMain, .{this});
@@ -244,6 +254,9 @@ fn threadMain(this: *Watcher) !void {
     }
     this.watchlist.deinit(this.allocator);
 
+    // Close trace file if open
+    WatcherTrace.deinit();
+
     const allocator = this.allocator;
     allocator.destroy(this);
 }
diff --git a/src/watcher/INotifyWatcher.zig b/src/watcher/INotifyWatcher.zig
index d468d4f30b..b4996fa5b2 100644
--- a/src/watcher/INotifyWatcher.zig
+++ b/src/watcher/INotifyWatcher.zig
@@ -352,6 +352,7 @@ fn processINotifyEventBatch(this: *bun.Watcher, event_count: usize, temp_name_li
     defer this.mutex.unlock();
     if (this.running) {
         // all_events.len == 0 is checked above, so last_event_index + 1 is safe
+        this.writeTraceEvents(all_events[0 .. last_event_index + 1], this.changed_filepaths[0..name_off]);
         this.onFileUpdate(this.ctx, all_events[0 .. last_event_index + 1], this.changed_filepaths[0..name_off], this.watchlist);
     }
 
diff --git a/src/watcher/KEventWatcher.zig b/src/watcher/KEventWatcher.zig
index 7886e265aa..c8ac49087d 100644
--- a/src/watcher/KEventWatcher.zig
+++ b/src/watcher/KEventWatcher.zig
@@ -93,6 +93,7 @@ pub fn watchLoopCycle(this: *Watcher) bun.sys.Maybe(void) {
     this.mutex.lock();
     defer this.mutex.unlock();
     if (this.running) {
+        this.writeTraceEvents(watchevents, this.changed_filepaths[0..watchevents.len]);
         this.onFileUpdate(this.ctx, watchevents, this.changed_filepaths[0..watchevents.len], this.watchlist);
     }
 
diff --git a/src/watcher/WatcherTrace.zig b/src/watcher/WatcherTrace.zig
new file mode 100644
index 0000000000..68d66076fb
--- /dev/null
+++ b/src/watcher/WatcherTrace.zig
@@ -0,0 +1,108 @@
+const std = @import("std");
+const bun = @import("../bun.zig");
+const Watcher = @import("../Watcher.zig");
+
+/// Optional trace file for debugging watcher events
+var trace_file: ?bun.FileDescriptor = null;
+
+/// Initialize trace file if BUN_WATCHER_TRACE env var is set.
+/// Only checks once on first call.
+pub fn init() void {
+    if (trace_file != null) return;
+
+    if (bun.getenvZ("BUN_WATCHER_TRACE")) |trace_path| {
+        if (trace_path.len > 0) {
+            const flags = bun.O.WRONLY | bun.O.CREAT | bun.O.APPEND;
+            const mode = 0o644;
+            switch (bun.sys.openA(trace_path, flags, mode)) {
+                .result => |fd| {
+                    trace_file = fd;
+                },
+                .err => {
+                    // Silently ignore errors opening trace file
+                },
+            }
+        }
+    }
+}
+
+/// Write trace events to the trace file if enabled.
+/// This is called from the watcher thread, so no locking is needed.
+pub fn writeEvents(watcher: *Watcher, events: []Watcher.WatchEvent, changed_files: []?[:0]u8) void {
+    const fd = trace_file orelse return;
+
+    var buf: [16384]u8 = undefined;
+    var stream = std.io.fixedBufferStream(&buf);
+    const writer = stream.writer();
+
+    // Get current timestamp
+    const timestamp = std.time.milliTimestamp();
+
+    for (events) |event| {
+        stream.reset();
+
+        const watchlist_slice = watcher.watchlist.slice();
+        const file_paths = watchlist_slice.items(.file_path);
+        const file_path = if (event.index < file_paths.len) file_paths[event.index] else "(unknown)";
+
+        // Write JSON manually for each event
+        writer.writeAll("{\"timestamp\":") catch return;
+        writer.print("{d}", .{timestamp}) catch return;
+        writer.writeAll(",\"index\":") catch return;
+        writer.print("{d}", .{event.index}) catch return;
+        writer.writeAll(",\"path\":\"") catch return;
+
+        // Escape quotes and backslashes in path
+        for (file_path) |c| {
+            if (c == '"' or c == '\\') {
+                writer.writeByte('\\') catch return;
+            }
+            writer.writeByte(c) catch return;
+        }
+        writer.writeAll("\"") catch return;
+
+        // Write individual operation flags
+        writer.writeAll(",\"delete\":") catch return;
+        writer.writeAll(if (event.op.delete) "true" else "false") catch return;
+        writer.writeAll(",\"write\":") catch return;
+        writer.writeAll(if (event.op.write) "true" else "false") catch return;
+        writer.writeAll(",\"rename\":") catch return;
+        writer.writeAll(if (event.op.rename) "true" else "false") catch return;
+        writer.writeAll(",\"metadata\":") catch return;
+        writer.writeAll(if (event.op.metadata) "true" else "false") catch return;
+        writer.writeAll(",\"move_to\":") catch return;
+        writer.writeAll(if (event.op.move_to) "true" else "false") catch return;
+
+        // Add changed file names if any
+        const names = event.names(changed_files);
+        writer.writeAll(",\"changed_files\":[") catch return;
+        var first = true;
+        for (names) |name_opt| {
+            if (name_opt) |name| {
+                if (!first) writer.writeAll(",") catch return;
+                first = false;
+                writer.writeAll("\"") catch return;
+                // Escape quotes and backslashes in filename
+                for (name) |c| {
+                    if (c == '"' or c == '\\') {
+                        writer.writeByte('\\') catch return;
+                    }
+                    writer.writeByte(c) catch return;
+                }
+                writer.writeAll("\"") catch return;
+            }
+        }
+        writer.writeAll("]}\n") catch return;
+
+        const written = stream.getWritten();
+        _ = bun.sys.write(fd, written);
+    }
+}
+
+/// Close the trace file if open
+pub fn deinit() void {
+    if (trace_file) |fd| {
+        fd.close();
+        trace_file = null;
+    }
+}
diff --git a/src/watcher/WindowsWatcher.zig b/src/watcher/WindowsWatcher.zig
index a2b8459c38..e1319389a1 100644
--- a/src/watcher/WindowsWatcher.zig
+++ b/src/watcher/WindowsWatcher.zig
@@ -293,6 +293,7 @@ fn processWatchEventBatch(this: *bun.Watcher, event_count: usize) bun.sys.Maybe(
 
     log("calling onFileUpdate (all_events.len = {d})", .{all_events.len});
 
+    this.writeTraceEvents(all_events, this.changed_filepaths[0 .. last_event_index + 1]);
     this.onFileUpdate(this.ctx, all_events, this.changed_filepaths[0 .. last_event_index + 1], this.watchlist);
 
     return .success;
diff --git a/test/cli/watch/watcher-trace.test.ts b/test/cli/watch/watcher-trace.test.ts
new file mode 100644
index 0000000000..e324734440
--- /dev/null
+++ b/test/cli/watch/watcher-trace.test.ts
@@ -0,0 +1,281 @@
+import { expect, test } from "bun:test";
+import { bunEnv, bunExe, tempDir } from "harness";
+import { existsSync, readFileSync } from "node:fs";
+import { join } from "node:path";
+
+test("BUN_WATCHER_TRACE creates trace file with watch events", async () => {
+  using dir = tempDir("watcher-trace", {
+    "index.js": `console.log("hello");`,
+    "watcher.js": `
+      import { watch } from "fs";
+      const watcher = watch(".", { recursive: true }, (eventType, filename) => {
+        console.log("WATCHER_EVENT", eventType, filename);
+      });
+      // Keep the process alive for a bit
+      setTimeout(() => {
+        watcher.close();
+        process.exit(0);
+      }, 3000);
+    `,
+  });
+
+  const traceFile = join(String(dir), "trace.log");
+  const env = { ...bunEnv, BUN_WATCHER_TRACE: traceFile };
+
+  await using proc = Bun.spawn({
+    cmd: [bunExe(), "watcher.js"],
+    env,
+    cwd: String(dir),
+    stdout: "pipe",
+    stderr: "pipe",
+  });
+
+  // Give watcher time to initialize
+  await Bun.sleep(500);
+
+  // Write to a file to trigger a watch event
+  await Bun.write(join(String(dir), "test.txt"), "test content");
+  await Bun.sleep(500);
+
+  // Modify the file
+  await Bun.write(join(String(dir), "test.txt"), "modified content");
+  await Bun.sleep(500);
+
+  // Delete the file
+  await Bun.write(join(String(dir), "delete.txt"), "to be deleted");
+  await Bun.sleep(300);
+  await Bun.$`rm ${join(String(dir), "delete.txt")}`.quiet();
+  await Bun.sleep(500);
+
+  const exitCode = await proc.exited;
+
+  // Check that trace file was created
+  expect(existsSync(traceFile)).toBe(true);
+
+  const traceContent = readFileSync(traceFile, "utf-8");
+  const lines = traceContent.trim().split("\n");
+
+  // Should have at least one event
+  expect(lines.length).toBeGreaterThan(0);
+
+  // Parse and validate JSON structure
+  for (const line of lines) {
+    if (line.trim()) {
+      const event = JSON.parse(line);
+
+      // Check required fields exist
+      expect(event).toHaveProperty("timestamp");
+      expect(event).toHaveProperty("index");
+      expect(event).toHaveProperty("path");
+      expect(event).toHaveProperty("delete");
+      expect(event).toHaveProperty("write");
+      expect(event).toHaveProperty("rename");
+      expect(event).toHaveProperty("metadata");
+      expect(event).toHaveProperty("move_to");
+      expect(event).toHaveProperty("changed_files");
+
+      // Validate types
+      expect(typeof event.timestamp).toBe("number");
+      expect(typeof event.index).toBe("number");
+      expect(typeof event.path).toBe("string");
+      expect(typeof event.delete).toBe("boolean");
+      expect(typeof event.write).toBe("boolean");
+      expect(typeof event.rename).toBe("boolean");
+      expect(typeof event.metadata).toBe("boolean");
+      expect(typeof event.move_to).toBe("boolean");
+      expect(Array.isArray(event.changed_files)).toBe(true);
+    }
+  }
+}, 10000);
+
+test("BUN_WATCHER_TRACE with --watch flag", async () => {
+  using dir = tempDir("watcher-trace-watch", {
+    "script.js": `console.log("run", 0);`,
+  });
+
+  const traceFile = join(String(dir), "watch-trace.log");
+  const env = { ...bunEnv, BUN_WATCHER_TRACE: traceFile };
+
+  const proc = Bun.spawn({
+    cmd: [bunExe(), "--watch", "script.js"],
+    env,
+    cwd: String(dir),
+    stdout: "pipe",
+    stderr: "inherit",
+    stdin: "ignore",
+  });
+
+  let i = 0;
+  for await (const line of proc.stdout) {
+    const str = new TextDecoder().decode(line);
+    if (str.includes(`run ${i}`)) {
+      i++;
+      if (i === 3) break; // Stop after 3 runs
+      await Bun.write(join(String(dir), "script.js"), `console.log("run", ${i});`);
+    }
+  }
+
+  proc.kill();
+  await proc.exited;
+
+  // Check that trace file was created
+  expect(existsSync(traceFile)).toBe(true);
+
+  const traceContent = readFileSync(traceFile, "utf-8");
+  const lines = traceContent
+    .trim()
+    .split("\n")
+    .filter(l => l.trim());
+
+  // Should have events from watching script.js
+  expect(lines.length).toBeGreaterThan(0);
+
+  // Validate JSON structure and find script.js events
+  let foundScriptEvent = false;
+  for (const line of lines) {
+    const event = JSON.parse(line);
+
+    // Check required fields exist
+    expect(event).toHaveProperty("timestamp");
+    expect(event).toHaveProperty("index");
+    expect(event).toHaveProperty("path");
+    expect(event).toHaveProperty("delete");
+    expect(event).toHaveProperty("write");
+    expect(event).toHaveProperty("rename");
+    expect(event).toHaveProperty("metadata");
+    expect(event).toHaveProperty("move_to");
+    expect(event).toHaveProperty("changed_files");
+
+    // Validate types
+    expect(typeof event.timestamp).toBe("number");
+    expect(typeof event.index).toBe("number");
+    expect(typeof event.path).toBe("string");
+    expect(typeof event.delete).toBe("boolean");
+    expect(typeof event.write).toBe("boolean");
+    expect(typeof event.rename).toBe("boolean");
+    expect(typeof event.metadata).toBe("boolean");
+    expect(typeof event.move_to).toBe("boolean");
+    expect(Array.isArray(event.changed_files)).toBe(true);
+
+    if (event.path.includes("script.js") || event.changed_files.some((f: string) => f?.includes("script.js"))) {
+      foundScriptEvent = true;
+      // Should have write flag set
+      expect(event.write).toBe(true);
+    }
+  }
+
+  expect(foundScriptEvent).toBe(true);
+}, 10000);
+
+test("BUN_WATCHER_TRACE with empty path does not create trace", async () => {
+  using dir = tempDir("watcher-trace-empty", {
+    "test.js": `console.log("ready");`,
+  });
+
+  const env = { ...bunEnv, BUN_WATCHER_TRACE: "" };
+
+  const proc = Bun.spawn({
+    cmd: [bunExe(), "--watch", "test.js"],
+    env,
+    cwd: String(dir),
+    stdout: "pipe",
+    stderr: "inherit",
+    stdin: "ignore",
+  });
+
+  // Wait for first run, then exit
+  for await (const line of proc.stdout) {
+    const str = new TextDecoder().decode(line);
+    if (str.includes("ready")) {
+      break;
+    }
+  }
+
+  proc.kill();
+  await proc.exited;
+
+  // Should not create any trace file in the directory
+  const files = Array.from(new Bun.Glob("*.log").scanSync({ cwd: String(dir) }));
+  expect(files.length).toBe(0);
+});
+
+test("BUN_WATCHER_TRACE appends across reloads", async () => {
+  using dir = tempDir("watcher-trace-append", {
+    "app.js": `console.log("first-0");`,
+  });
+
+  const traceFile = join(String(dir), "append-trace.log");
+  const env = { ...bunEnv, BUN_WATCHER_TRACE: traceFile };
+
+  // First run
+  const proc1 = Bun.spawn({
+    cmd: [bunExe(), "--watch", "app.js"],
+    env,
+    cwd: String(dir),
+    stdout: "pipe",
+    stderr: "inherit",
+    stdin: "ignore",
+  });
+
+  let i = 0;
+  for await (const line of proc1.stdout) {
+    const str = new TextDecoder().decode(line);
+    if (str.includes(`first-${i}`)) {
+      i++;
+      if (i === 2) break; // Stop after 2 runs
+      await Bun.write(join(String(dir), "app.js"), `console.log("first-${i}");`);
+    }
+  }
+
+  proc1.kill();
+  await proc1.exited;
+
+  const firstContent = readFileSync(traceFile, "utf-8");
+  const firstLines = firstContent
+    .trim()
+    .split("\n")
+    .filter(l => l.trim());
+  expect(firstLines.length).toBeGreaterThan(0);
+
+  // Second run - should append to the same file
+  const proc2 = Bun.spawn({
+    cmd: [bunExe(), "--watch", "app.js"],
+    env,
+    cwd: String(dir),
+    stdout: "pipe",
+    stderr: "inherit",
+    stdin: "ignore",
+  });
+
+  let j = 0;
+  for await (const line of proc2.stdout) {
+    const str = new TextDecoder().decode(line);
+    if (str.includes(`second-${j}`)) {
+      j++;
+      if (j === 2) break; // Stop after 2 runs
+      await Bun.write(join(String(dir), "app.js"), `console.log("second-${j}");`);
+    } else if (str.includes("first-1")) {
+      // Initial run, start modifying
+      await Bun.write(join(String(dir), "app.js"), `console.log("second-0");`);
+    }
+  }
+
+  proc2.kill();
+  await proc2.exited;
+
+  const secondContent = readFileSync(traceFile, "utf-8");
+  const secondLines = secondContent
+    .trim()
+    .split("\n")
+    .filter(l => l.trim());
+
+  // Should have more lines after second run
+  expect(secondLines.length).toBeGreaterThan(firstLines.length);
+
+  // All lines should be valid JSON
+  for (const line of secondLines) {
+    const event = JSON.parse(line);
+    expect(event).toHaveProperty("timestamp");
+    expect(event).toHaveProperty("path");
+  }
+}, 10000);