diff --git a/crates/xy/src/daemon/mod.rs b/crates/xy/src/daemon/mod.rs
index 02a546e..ddcd70a 100644
--- a/crates/xy/src/daemon/mod.rs
+++ b/crates/xy/src/daemon/mod.rs
@@ -66,8 +66,6 @@ pub fn spawn_supervisor(paths: &Paths, cfg: ServerConfig) -> Result<SupervisorHa
 }
 
 pub async fn run(paths: Paths) -> Result<()> {
-    paths.ensure_dirs().context("create state dirs")?;
-
     let _pid =
         PidFile::acquire(&paths.pidfile).context("another xy daemon appears to be running")?;
 
diff --git a/crates/xy/src/logging.rs b/crates/xy/src/logging.rs
new file mode 100644
index 0000000..cfd6512
--- /dev/null
+++ b/crates/xy/src/logging.rs
@@ -0,0 +1,32 @@
+use std::path::Path;
+use std::sync::{Arc, Mutex};
+use xy_supervisor::logs::RotatingLogWriter;
+
+const LOG_FILE_MAX_BYTES: u64 = 10 * 1024 * 1024;
+const LOG_FILE_KEEP: usize = 5;
+
+pub(crate) fn daemon_writer(log_dir: &Path) -> std::io::Result<Arc<Mutex<RotatingLogWriter>>> {
+    let writer =
+        RotatingLogWriter::open(&log_dir.join("xy.log"), LOG_FILE_MAX_BYTES, LOG_FILE_KEEP)?;
+
+    Ok(Arc::new(Mutex::new(writer)))
+}
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+
+    #[test]
+    fn daemon_writer_creates_and_appends_to_xy_log() {
+        use std::io::Write;
+
+        let tmp = tempfile::tempdir().unwrap();
+
+        let writer = daemon_writer(tmp.path()).unwrap();
+
+        writer.lock().unwrap().write_all(b"line\n").unwrap();
+
+        let contents = std::fs::read_to_string(tmp.path().join("xy.log")).unwrap();
+        assert_eq!(contents, "line\n");
+    }
+}
diff --git a/crates/xy/src/main.rs b/crates/xy/src/main.rs
index 53ad0db..00e05b0 100644
--- a/crates/xy/src/main.rs
+++ b/crates/xy/src/main.rs
@@ -1,7 +1,9 @@
 use clap::{Parser, Subcommand};
+use std::sync::Arc;
 
 mod cli;
 mod daemon;
+mod logging;
 mod paths;
 mod pidfile;
 
@@ -55,23 +57,49 @@ enum Cmd {
 
 #[tokio::main]
 async fn main() -> std::process::ExitCode {
-    tracing_subscriber::fmt()
-        .with_env_filter(
-            tracing_subscriber::EnvFilter::try_from_default_env()
-                .unwrap_or_else(|_| tracing_subscriber::EnvFilter::new("info")),
-        )
-        .with_writer(std::io::stderr)
-        .init();
-
     let cli = Cli::parse();
+
     let paths = match paths::Paths::resolve() {
         Ok(p) => p,
-        Err(e) => {
-            eprintln!("xy: failed to resolve XDG paths: {e}");
+        Err(err) => {
+            eprintln!("xy: failed to resolve XDG paths: {err}");
             return std::process::ExitCode::from(3);
         }
     };
 
+    let filter = tracing_subscriber::EnvFilter::try_from_default_env()
+        .unwrap_or_else(|_| tracing_subscriber::EnvFilter::new("info"));
+
+    if matches!(cli.cmd, Cmd::Daemon) {
+        use tracing_subscriber::fmt::writer::MakeWriterExt;
+
+        if let Err(err) = paths.ensure_dirs() {
+            eprintln!("xy: failed to create state dirs: {err}");
+            return std::process::ExitCode::from(3);
+        }
+
+        let file = match logging::daemon_writer(&paths.log_dir) {
+            Ok(writer) => writer,
+            Err(err) => {
+                eprintln!("xy: failed to open daemon log: {err}");
+                return std::process::ExitCode::from(3);
+            }
+        };
+
+        let file = Arc::into_inner(file).expect("daemon_writer arc has one owner");
+
+        tracing_subscriber::fmt()
+            .with_env_filter(filter)
+            .with_ansi(false)
+            .with_writer(std::io::stderr.and(file))
+            .init();
+    } else {
+        tracing_subscriber::fmt()
+            .with_env_filter(filter)
+            .with_writer(std::io::stderr)
+            .init();
+    }
+
     let result: anyhow::Result<i32> = match cli.cmd {
         Cmd::Daemon => daemon::run(paths).await.map(|_| 0),
         Cmd::List => cli::list(paths).await,