diff --git a/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CProjectDescriptionStorageManager.java b/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CProjectDescriptionStorageManager.java
index 34897c916cd..5bb689b6b00 100644
--- a/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CProjectDescriptionStorageManager.java
+++ b/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CProjectDescriptionStorageManager.java
@@ -37,6 +37,7 @@ import javax.xml.transform.stream.StreamResult;
 import org.eclipse.cdt.core.CCorePlugin;
 import org.eclipse.cdt.core.settings.model.ICProjectDescription;
 import org.eclipse.cdt.internal.core.CConfigBasedDescriptorManager;
+import org.eclipse.cdt.internal.core.XmlUtil;
 import org.eclipse.cdt.internal.core.settings.model.ICProjectDescriptionStorageType.CProjectDescriptionStorageTypeProxy;
 import org.eclipse.cdt.internal.core.settings.model.xml.XmlProjectDescriptionStorage;
 import org.eclipse.cdt.internal.core.settings.model.xml2.XmlProjectDescriptionStorage2;
@@ -160,6 +161,7 @@ public class CProjectDescriptionStorageManager {
 			Element el = doc.createElement(ICProjectDescriptionStorageType.STORAGE_ROOT_ELEMENT_NAME);
 			el.setAttribute(ICProjectDescriptionStorageType.STORAGE_TYPE_ATTRIBUTE, type.id);
 			doc.appendChild(el);
+			XmlUtil.prettyFormat(doc);
 
 			ByteArrayOutputStream stream = new ByteArrayOutputStream();
 			Transformer transformer = TransformerFactory.newInstance().newTransformer();
diff --git a/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/xml/XmlProjectDescriptionStorage.java b/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/xml/XmlProjectDescriptionStorage.java
index 890131e99c2..ccfc43fee95 100644
--- a/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/xml/XmlProjectDescriptionStorage.java
+++ b/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/xml/XmlProjectDescriptionStorage.java
@@ -40,6 +40,7 @@ import org.eclipse.cdt.core.settings.model.ICSettingsStorage;
 import org.eclipse.cdt.core.settings.model.ICStorageElement;
 import org.eclipse.cdt.core.settings.model.extension.ICProjectConverter;
 import org.eclipse.cdt.core.settings.model.util.CDataUtil;
+import org.eclipse.cdt.internal.core.XmlUtil;
 import org.eclipse.cdt.internal.core.envvar.ContributedEnvironment;
 import org.eclipse.cdt.internal.core.settings.model.AbstractCProjectDescriptionStorage;
 import org.eclipse.cdt.internal.core.settings.model.CProjectDescription;
@@ -463,6 +464,7 @@ public class XmlProjectDescriptionStorage extends AbstractCProjectDescriptionSto
 	 */
 	private ByteArrayOutputStream write(ICStorageElement element) throws CoreException {
 		Document doc = ((InternalXmlStorageElement) element).fElement.getOwnerDocument();
+		XmlUtil.prettyFormat(doc);
 
 		ByteArrayOutputStream stream = new ByteArrayOutputStream();
 		try {
diff --git a/core/org.eclipse.cdt.core/utils/org/eclipse/cdt/internal/core/XmlUtil.java b/core/org.eclipse.cdt.core/utils/org/eclipse/cdt/internal/core/XmlUtil.java
new file mode 100644
index 00000000000..7e220e90431
--- /dev/null
+++ b/core/org.eclipse.cdt.core/utils/org/eclipse/cdt/internal/core/XmlUtil.java
@@ -0,0 +1,104 @@
+/*******************************************************************************
+ * Copyright (c) 2009, 2009 Andrew Gvozdev (Quoin Inc.).
+ * All rights reserved. This program and the accompanying materials
+ * are made available under the terms of the Eclipse Public License v1.0
+ * which accompanies this distribution, and is available at
+ * http://www.eclipse.org/legal/epl-v10.html
+ *
+ * Contributors:
+ *     Andrew Gvozdev (Quoin Inc.)
+ *******************************************************************************/
+package org.eclipse.cdt.internal.core;
+
+import org.w3c.dom.Document;
+import org.w3c.dom.Node;
+import org.w3c.dom.NodeList;
+
+/**
+ * XML utilities.
+ *
+ */
+public class XmlUtil {
+	private static final String EOL_XML = "\n"; //$NON-NLS-1$
+	private static final String DEFAULT_IDENT = "\t"; //$NON-NLS-1$
+
+	/**
+	 * As a workaround for {@code javax.xml.transform.Transformer} not being able
+	 * to pretty print XML. This method prepares DOM {@code Document} for the transformer
+	 * to be pretty printed, i.e. providing proper indentations for enclosed tags.
+	 *
+	 * @param doc - DOM document to be pretty printed
+	 */
+	public static void prettyFormat(Document doc) {
+		prettyFormat(doc, DEFAULT_IDENT);
+	}
+
+	/**
+	 * As a workaround for {@code javax.xml.transform.Transformer} not being able
+	 * to pretty print XML. This method prepares DOM {@code Document} for the transformer
+	 * to be pretty printed, i.e. providing proper indentations for enclosed tags.
+	 *
+	 * @param doc - DOM document to be pretty printed
+	 * @param ident - custom indentation as a string of white spaces
+	 */
+	public static void prettyFormat(Document doc, String ident) {
+		doc.normalize();
+		prettyFormat(doc.getDocumentElement(), "", ident); //$NON-NLS-1$
+	}
+
+	/**
+	 * The method inserts end-of-line+indentation Text nodes where indentation is necessary.
+	 * 
+	 * @param node - node to be pretty formatted
+	 * @param identLevel - initial indentation level of the node
+	 * @param ident - additional indentation inside the node
+	 */
+	private static void prettyFormat(Node node, String identLevel, String ident) {
+		NodeList nodelist = node.getChildNodes();
+		int iStart=0;
+		Node item = nodelist.item(0);
+		if (item!=null) {
+			short type = item.getNodeType();
+			if (type==Node.ELEMENT_NODE || type==Node.COMMENT_NODE) {
+				Node newChild = node.getOwnerDocument().createTextNode(EOL_XML + identLevel + ident);
+				node.insertBefore(newChild, item);
+				iStart=1;
+			}
+		}
+		for (int i=iStart;i<nodelist.getLength();i++) {
+			item = nodelist.item(i);
+			if (item!=null) {
+				short type = item.getNodeType();
+				if (type==Node.TEXT_NODE && item.getNodeValue().trim().length()==0) {
+					if (i+1<nodelist.getLength()) {
+						item.setNodeValue(EOL_XML + identLevel + ident);
+					} else {
+						item.setNodeValue(EOL_XML + identLevel);
+					}
+				} else if (type==Node.ELEMENT_NODE) {
+					prettyFormat(item, identLevel + ident, ident);
+					if (i+1<nodelist.getLength()) {
+						Node nextItem = nodelist.item(i+1);
+						if (nextItem!=null) {
+							short nextType = nextItem.getNodeType();
+							if (nextType==Node.ELEMENT_NODE || nextType==Node.COMMENT_NODE) {
+								Node newChild = node.getOwnerDocument().createTextNode(EOL_XML + identLevel + ident);
+								node.insertBefore(newChild, nextItem);
+								i++;
+								continue;
+							}
+						}
+					} else {
+						Node newChild = node.getOwnerDocument().createTextNode(EOL_XML + identLevel);
+						node.appendChild(newChild);
+						i++;
+						continue;
+					}
+				}
+			}
+		}
+
+	}
+}
+
+