diff --git a/src/Watcher.zig b/src/Watcher.zig
index c62a9aab0f..310acf364a 100644
--- a/src/Watcher.zig
+++ b/src/Watcher.zig
@@ -95,9 +95,18 @@ 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 +253,9 @@ fn threadMain(this: *Watcher) !void {
     }
     this.watchlist.deinit(this.allocator);
 
+    // Close trace file if open
+    WatcherTrace.deinit();
+
     const allocator = this.allocator;
     allocator.destroy(this);
 }
@@ -676,6 +688,7 @@ pub fn onMaybeWatchDirectory(watch: *Watcher, file_path: string, dir_fd: bun.Sto
 
 const string = []const u8;
 
+const WatcherTrace = @import("./watcher/WatcherTrace.zig");
 const WindowsWatcher = @import("./watcher/WindowsWatcher.zig");
 const options = @import("./options.zig");
 const std = @import("std");
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..d2beeb1e4e
--- /dev/null
+++ b/src/watcher/WatcherTrace.zig
@@ -0,0 +1,111 @@
+/// Optional trace file for debugging watcher events
+var trace_file: ?bun.sys.File = 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 = bun.sys.File{ .handle = 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.
+/// Events are assumed to be already deduped by path.
+pub fn writeEvents(watcher: *Watcher, events: []Watcher.WatchEvent, changed_files: []?[:0]u8) void {
+    const file = trace_file orelse return;
+
+    var buffered = std.io.bufferedWriter(file.writer());
+    defer buffered.flush() catch |err| {
+        bun.Output.err(err, "Failed to flush watcher trace file", .{});
+    };
+    const writer = buffered.writer();
+
+    // Get current timestamp
+    const timestamp = std.time.milliTimestamp();
+
+    // Write: { "timestamp": number, "files": { ... } }
+    writer.writeAll("{\"timestamp\":") catch return;
+    writer.print("{d}", .{timestamp}) catch return;
+    writer.writeAll(",\"files\":{") catch return;
+
+    const watchlist_slice = watcher.watchlist.slice();
+    const file_paths = watchlist_slice.items(.file_path);
+
+    var first_file = true;
+    for (events) |event| {
+        const file_path = if (event.index < file_paths.len) file_paths[event.index] else "(unknown)";
+        const names = event.names(changed_files);
+
+        if (!first_file) writer.writeAll(",") catch return;
+        first_file = false;
+
+        // Write path as key
+        writer.print("{}", .{bun.fmt.formatJSONStringUTF8(file_path, .{})}) catch return;
+        writer.writeAll(":{\"events\":[") catch return;
+
+        // Write array of event types using comptime reflection
+        const fields = std.meta.fields(@TypeOf(event.op));
+        var first = true;
+        inline for (fields) |field| {
+            // Only process bool fields (skip _padding and other non-bool fields)
+            if (field.type == bool and @field(event.op, field.name)) {
+                if (!first) writer.writeAll(",") catch return;
+                writer.print("\"{s}\"", .{field.name}) catch return;
+                first = false;
+            }
+        }
+        writer.writeAll("]") catch return;
+
+        // Only write "changed" field if there are changed files
+        var has_changed = false;
+        for (names) |name_opt| {
+            if (name_opt != null) {
+                has_changed = true;
+                break;
+            }
+        }
+
+        if (has_changed) {
+            writer.writeAll(",\"changed\":[") catch return;
+            first = true;
+            for (names) |name_opt| {
+                if (name_opt) |name| {
+                    if (!first) writer.writeAll(",") catch return;
+                    first = false;
+                    writer.print("{}", .{bun.fmt.formatJSONStringUTF8(name, .{})}) catch return;
+                }
+            }
+            writer.writeAll("]") catch return;
+        }
+
+        writer.writeAll("}") catch return;
+    }
+
+    writer.writeAll("}}\n") catch return;
+}
+
+/// Close the trace file if open
+pub fn deinit() void {
+    if (trace_file) |file| {
+        file.close();
+        trace_file = null;
+    }
+}
+
+const Watcher = @import("../Watcher.zig");
+const bun = @import("bun");
+const std = @import("std");
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..e3e19daa2a
--- /dev/null
+++ b/test/cli/watch/watcher-trace.test.ts
@@ -0,0 +1,263 @@
+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", {
+    "script.js": `console.log("ready");`,
+  });
+
+  const traceFile = join(String(dir), "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",
+  });
+
+  const decoder = new TextDecoder();
+  let wroteModification = false;
+  // Wait for the initial run, trigger a change, then wait for the reload
+  for await (const chunk of proc.stdout) {
+    const str = decoder.decode(chunk);
+    if (!wroteModification && str.includes("ready")) {
+      wroteModification = true;
+      await Bun.write(join(String(dir), "script.js"), `console.log("modified");`);
+      continue;
+    }
+    if (wroteModification && str.includes("modified")) {
+      break;
+    }
+  }
+
+  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 at least one event
+  expect(lines.length).toBeGreaterThan(0);
+
+  // Parse and validate JSON structure
+  for (const line of lines) {
+    const event = JSON.parse(line);
+
+    // Check required fields exist
+    expect(event).toHaveProperty("timestamp");
+    expect(event).toHaveProperty("files");
+
+    // Validate types
+    expect(typeof event.timestamp).toBe("number");
+    expect(typeof event.files).toBe("object");
+
+    // Validate files object structure
+    for (const [path, fileEvent] of Object.entries(event.files)) {
+      expect(typeof path).toBe("string");
+      expect(fileEvent).toHaveProperty("events");
+      expect(Array.isArray(fileEvent.events)).toBe(true);
+      // "changed" field is optional
+      if (fileEvent.changed) {
+        expect(Array.isArray(fileEvent.changed)).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 chunk of proc.stdout) {
+    const str = new TextDecoder().decode(chunk);
+    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("files");
+
+    // Validate types
+    expect(typeof event.timestamp).toBe("number");
+    expect(typeof event.files).toBe("object");
+
+    // Check for script.js events
+    for (const [path, fileEvent] of Object.entries(event.files)) {
+      expect(fileEvent).toHaveProperty("events");
+      expect(Array.isArray(fileEvent.events)).toBe(true);
+
+      if (
+        path.includes("script.js") ||
+        (Array.isArray(fileEvent.changed) && fileEvent.changed.some((f: string) => f?.includes("script.js")))
+      ) {
+        foundScriptEvent = true;
+        // Should have write event
+        expect(fileEvent.events).toContain("write");
+      }
+    }
+  }
+
+  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 chunk of proc.stdout) {
+    const str = new TextDecoder().decode(chunk);
+    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 chunk of proc1.stdout) {
+    const str = new TextDecoder().decode(chunk);
+    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-${i}");`);
+    }
+  }
+
+  proc1.kill();
+  await proc1.exited;
+
+  const firstContent = readFileSync(traceFile, "utf-8");
+  const firstLines = firstContent
+    .trim()
+    .split("\n")
+    .filter(l => l.trim());
+  expect(firstLines.length).toBeGreaterThan(0);
+
+  // Second run - should append to the same file
+  const proc2 = Bun.spawn({
+    cmd: [bunExe(), "--watch", "app.js"],
+    env,
+    cwd: String(dir),
+    stdout: "pipe",
+    stderr: "inherit",
+    stdin: "ignore",
+  });
+
+  let j = 0;
+  for await (const chunk of proc2.stdout) {
+    const str = new TextDecoder().decode(chunk);
+    if (str.includes(`second-${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")) {
+      // Second process starts with previous file content ("first-1"), trigger first modification
+      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("files");
+  }
+}, 10000);