diff --git a/doc/api/util.markdown b/doc/api/util.markdown
index 66ce52ddcc0a2f..1a914e51f17bac 100644
--- a/doc/api/util.markdown
+++ b/doc/api/util.markdown
@@ -66,28 +66,28 @@ Output with timestamp on `stdout`.
     require('util').log('Timestamped message.');
 
 
-## util.inspect(object, [showHidden], [depth], [colors])
+## util.inspect(object, [options])
 
 Return a string representation of `object`, which is useful for debugging.
 
-If `showHidden` is `true`, then the object's non-enumerable properties will be
-shown too. Defaults to `false`.
+An optional *options* object may be passed that alters certain aspects of the
+formatted string:
 
-If `depth` is provided, it tells `inspect` how many times to recurse while
-formatting the object. This is useful for inspecting large complicated objects.
+ - `showHidden` - if `true` then the object's non-enumerable properties will be
+   shown too. Defaults to `false`.
 
-The default is to only recurse twice.  To make it recurse indefinitely, pass
-in `null` for `depth`.
+ - `depth` - tells `inspect` how many times to recurse while formatting the
+   object. This is useful for inspecting large complicated objects. Defaults to
+   `2`. To make it recurse indefinitely pass `null`.
 
-If `colors` is `true`, the output will be styled with ANSI color codes.
-Defaults to `false`.
-Colors are customizable, see below.
+ - `colors` - if `true`, then the output will be styled with ANSI color codes.
+   Defaults to `false`. Colors are customizable, see below.
 
 Example of inspecting all properties of the `util` object:
 
     var util = require('util');
 
-    console.log(util.inspect(util, true, null));
+    console.log(util.inspect(util, { showHidden: true, depth: null }));
 
 ### Customizing `util.inspect` colors
 
diff --git a/lib/util.js b/lib/util.js
index ebb18810ccbbdc..86acd8ba0d6e20 100644
--- a/lib/util.js
+++ b/lib/util.js
@@ -110,19 +110,30 @@ var error = exports.error = function(x) {
  * in the best way possible given the different types.
  *
  * @param {Object} obj The object to print out.
- * @param {Boolean} showHidden Flag that shows hidden (not enumerable)
- *    properties of objects.
- * @param {Number} depth Depth in which to descend in object. Default is 2.
- * @param {Boolean} colors Flag to turn on ANSI escape codes to color the
- *    output. Default is false (no coloring).
+ * @param {Object} opts Optional options object that alters the output.
  */
-function inspect(obj, showHidden, depth, colors) {
+function inspect(obj, opts/* legacy: showHidden, depth, colors*/) {
+  // default options
   var ctx = {
-    showHidden: showHidden,
     seen: [],
-    stylize: colors ? stylizeWithColor : stylizeNoColor
+    stylize: stylizeNoColor
   };
-  return formatValue(ctx, obj, (typeof depth === 'undefined' ? 2 : depth));
+  // legacy...
+  if (arguments.length >= 3) ctx.depth = arguments[2];
+  if (arguments.length >= 4) ctx.colors = arguments[3];
+  if (typeof opts === 'boolean') {
+    // legacy...
+    ctx.showHidden = opts;
+  } else if (opts) {
+    // got an "options" object
+    exports._extend(ctx, opts);
+  }
+  // set default options
+  if (typeof ctx.showHidden === 'undefined') ctx.showHidden = false;
+  if (typeof ctx.depth === 'undefined') ctx.depth = 2;
+  if (typeof ctx.colors === 'undefined') ctx.colors = false;
+  if (ctx.colors) ctx.stylize = stylizeWithColor;
+  return formatValue(ctx, obj, ctx.depth);
 }
 exports.inspect = inspect;
 
diff --git a/test/simple/test-util-inspect.js b/test/simple/test-util-inspect.js
index 0877c76d6ff682..65f8548f12138b 100644
--- a/test/simple/test-util-inspect.js
+++ b/test/simple/test-util-inspect.js
@@ -137,3 +137,15 @@ assert.doesNotThrow(function() {
     hasOwnProperty: null
   });
 });
+
+// new API, accepts an "options" object
+var subject = { foo: 'bar', hello: 31, a: { b: { c: { d: 0 } } } };
+Object.defineProperty(subject, 'hidden', { enumerable: false, value: null });
+
+assert(util.inspect(subject, { showHidden: false }).indexOf('hidden') === -1);
+assert(util.inspect(subject, { showHidden: true }).indexOf('hidden') !== -1);
+assert(util.inspect(subject, { colors: false }).indexOf('\u001b[32m') === -1);
+assert(util.inspect(subject, { colors: true }).indexOf('\u001b[32m') !== -1);
+assert(util.inspect(subject, { depth: 2 }).indexOf('c: [Object]') !== -1);
+assert(util.inspect(subject, { depth: 0 }).indexOf('a: [Object]') !== -1);
+assert(util.inspect(subject, { depth: null }).indexOf('{ d: 0 }') !== -1);