diff --git a/crates/xy/src/main.rs b/crates/xy/src/main.rs
index ade518d..ca94c02 100644
--- a/crates/xy/src/main.rs
+++ b/crates/xy/src/main.rs
@@ -92,7 +92,9 @@ async fn main() -> std::process::ExitCode {
     let filter = tracing_subscriber::EnvFilter::try_from_default_env()
         .unwrap_or_else(|_| tracing_subscriber::EnvFilter::new("info"));
 
-    if matches!(cli.cmd, Cmd::Daemon) {
+    let is_daemon = matches!(cli.cmd, Cmd::Daemon);
+
+    if is_daemon {
         use tracing_subscriber::fmt::writer::MakeWriterExt;
 
         if let Err(err) = paths.ensure_dirs() {
@@ -134,8 +136,15 @@ async fn main() -> std::process::ExitCode {
 
     match result {
         Ok(code) => std::process::ExitCode::from(code as u8),
-        Err(e) => {
-            eprintln!("xy: {e:#}");
+        Err(err) => {
+            // Under launchd the daemon's stderr is discarded, so a fatal
+            // startup error is only diagnosable if it reaches the log file.
+            if is_daemon {
+                tracing::error!("{err:#}");
+            } else {
+                eprintln!("xy: {err:#}");
+            }
+
             std::process::ExitCode::from(1)
         }
     }
diff --git a/crates/xy/tests/daemon_log.rs b/crates/xy/tests/daemon_log.rs
new file mode 100644
index 0000000..a51d212
--- /dev/null
+++ b/crates/xy/tests/daemon_log.rs
@@ -0,0 +1,30 @@
+mod common;
+use common::*;
+
+#[tokio::test]
+async fn fatal_startup_error_is_written_to_daemon_log() {
+    let xy = xy_bin();
+    let mut h = Harness::new();
+
+    h.start_daemon(&xy).await;
+
+    let log = h.state_dir.join("logs/daemon.log");
+
+    let before = std::fs::read_to_string(&log).unwrap_or_default();
+
+    assert!(
+        !before.contains("another xy daemon"),
+        "log already reports contention before the second daemon ran: {before}"
+    );
+
+    let (code, _out, _err) = h.run_cli(&xy, &["daemon"]).await;
+
+    assert_eq!(code, 1, "second daemon should exit 1 on pidfile contention");
+
+    let after = std::fs::read_to_string(&log).expect("daemon.log should exist");
+
+    assert!(
+        after.contains("another xy daemon"),
+        "daemon.log must record why the daemon refused to start, got: {after:?}"
+    );
+}