diff --git a/go.mod b/go.mod
index 4e664b2759..cb01074d54 100644
--- a/go.mod
+++ b/go.mod
@@ -10,6 +10,7 @@ require (
 	github.com/boumenot/gocover-cobertura v1.2.0
 	github.com/cbroglie/mustache v1.4.0
 	github.com/cespare/xxhash/v2 v2.3.0
+	github.com/creack/pty v1.1.21
 	github.com/dustin/go-humanize v1.0.1
 	github.com/elastic/elastic-integration-corpus-generator-tool v0.10.0
 	github.com/elastic/go-elasticsearch/v7 v7.17.10
diff --git a/go.sum b/go.sum
index 19b5e54d66..59cdaf44dc 100644
--- a/go.sum
+++ b/go.sum
@@ -71,8 +71,8 @@ github.com/cloudflare/circl v1.3.7/go.mod h1:sRTcRWXGLrKw6yIGJ+l7amYJFfAXbZG0kBS
 github.com/cpuguy83/go-md2man/v2 v2.0.3/go.mod h1:tgQtvFlXSQOSOSIRvRPT7W67SCa46tRHOmNcaadrF8o=
 github.com/creack/pty v1.1.9/go.mod h1:oKZEueFk5CKHvIhNR5MUki03XCEU+Q6VDXinZuGJ33E=
 github.com/creack/pty v1.1.17/go.mod h1:MOBLtS5ELjhRRrroQr9kyvTxUAFNvYEK993ew/Vr4O4=
-github.com/creack/pty v1.1.18 h1:n56/Zwd5o6whRC5PMGretI4IdRLlmBXYNjScPaBgsbY=
-github.com/creack/pty v1.1.18/go.mod h1:MOBLtS5ELjhRRrroQr9kyvTxUAFNvYEK993ew/Vr4O4=
+github.com/creack/pty v1.1.21 h1:1/QdRyBaHHJP61QkWMXlOIBfsgdDeeKfK8SYVUWJKf0=
+github.com/creack/pty v1.1.21/go.mod h1:MOBLtS5ELjhRRrroQr9kyvTxUAFNvYEK993ew/Vr4O4=
 github.com/creasty/defaults v1.7.0 h1:eNdqZvc5B509z18lD8yc212CAqJNvfT1Jq6L8WowdBA=
 github.com/creasty/defaults v1.7.0/go.mod h1:iGzKe6pbEHnpMPtfDXZEr0NVxWnPTjb1bbDy08fPzYM=
 github.com/cyphar/filepath-securejoin v0.2.4 h1:Ugdm7cg7i6ZK6x3xDF1oEu1nfkyfH53EtKeQYTC3kyg=
diff --git a/internal/compose/compose.go b/internal/compose/compose.go
index 41f156da21..81163f6d30 100644
--- a/internal/compose/compose.go
+++ b/internal/compose/compose.go
@@ -5,6 +5,7 @@
 package compose
 
 import (
+	"bufio"
 	"bytes"
 	"context"
 	"errors"
@@ -12,12 +13,15 @@ import (
 	"io"
 	"os"
 	"os/exec"
+	"regexp"
 	"runtime"
 	"strconv"
 	"strings"
+	"sync"
 	"time"
 
 	"github.com/Masterminds/semver/v3"
+	"github.com/creack/pty"
 
 	"gopkg.in/yaml.v3"
 
@@ -486,16 +490,66 @@ func (p *Project) runDockerComposeCmd(ctx context.Context, opts dockerComposeOpt
 	}
 	cmd.Env = append(os.Environ(), opts.env...)
 
+	ptty, tty, err := pty.Open()
+	if err != nil {
+		return fmt.Errorf("failed to open pseudo-tty to capture stderr: %w", err)
+	}
+
+	var errBuffer bytes.Buffer
+	cmd.Stderr = tty
+	var stderr io.Writer = &errBuffer
 	if logger.IsDebugMode() {
 		cmd.Stdout = os.Stdout
-		cmd.Stderr = os.Stderr
+		stderr = io.MultiWriter(&errBuffer, os.Stderr)
 	}
 	if opts.stdout != nil {
 		cmd.Stdout = opts.stdout
 	}
 
+	var wg sync.WaitGroup
+	wg.Add(1)
+	go func() {
+		defer wg.Done()
+		io.Copy(stderr, ptty)
+	}()
+
 	logger.Debugf("running command: %s", cmd)
-	return cmd.Run()
+	err = cmd.Run()
+	ptty.Close()
+	tty.Close()
+	wg.Wait()
+	if err != nil {
+		if msg := cleanComposeError(errBuffer.String()); len(msg) > 0 {
+			return fmt.Errorf("%w: %s", err, msg)
+		}
+	}
+	return err
+}
+
+const daemonResponse = `Error response from daemon:`
+
+// This regexp must match prefixes like WARN[0000], which may include escape sequences for colored letters
+// or structured logs, starting with key=value pairs.
+var composeLoggerPrefix = regexp.MustCompile(`^[^\s]+\[[0-9]+\]`)
+
+func cleanComposeError(msg string) string {
+	// If there is a daemon response, just return it.
+	if i := strings.Index(msg, daemonResponse); i >= 0 {
+		return strings.TrimSpace(msg[i+len(daemonResponse):])
+	}
+
+	// Filter out lines coming from the docker compose structured logger.
+	var cleanError strings.Builder
+	scanner := bufio.NewScanner(strings.NewReader(msg))
+	for scanner.Scan() {
+		line := strings.TrimSpace(scanner.Text())
+		if composeLoggerPrefix.MatchString(line) {
+			continue
+		}
+		fmt.Fprintln(&cleanError, line)
+	}
+
+	return strings.TrimSpace(cleanError.String())
 }
 
 func (p *Project) dockerComposeBaseCommand() (name string, args []string) {
diff --git a/internal/stack/update.go b/internal/stack/update.go
index 991622e641..ee7f6dfd80 100644
--- a/internal/stack/update.go
+++ b/internal/stack/update.go
@@ -25,7 +25,7 @@ func Update(ctx context.Context, options Options) error {
 
 	err = dockerComposePull(ctx, options)
 	if err != nil {
-		return fmt.Errorf("updating docker images failed: %w", err)
+		return fmt.Errorf("pulling docker images failed: %w", err)
 	}
 	return nil
 }