diff --git a/main/src/main/scala/sbt/Defaults.scala b/main/src/main/scala/sbt/Defaults.scala
index 243f10602..eaf771149 100644
--- a/main/src/main/scala/sbt/Defaults.scala
+++ b/main/src/main/scala/sbt/Defaults.scala
@@ -27,6 +27,7 @@ import sbt.ScopeAxis.{ Select, This, Zero }
 import sbt.State.StateOpsImpl
 import sbt.coursierint.*
 import sbt.internal.CommandStrings.ExportStream
+import sbt.internal.CompileDebugLogger
 import sbt.internal.*
 import sbt.internal.classpath.AlternativeZincUtil
 import sbt.internal.inc.JavaInterfaceUtil.*
@@ -2217,9 +2218,16 @@ object Defaults extends BuildCommon {
     )
   )
 
+  private def projectIdFromScope(s: TaskStreams): String =
+    s.key.scope.project match {
+      case Select(ref: ProjectRef) => ref.project
+      case _                       => "root"
+    }
+
   private val cachedCompileIncrementalTask = Def
     .cachedTask {
       val s = streams.value
+      val projectId = projectIdFromScope(s)
       val ci = (compile / compileInputs).value
       val bspTask = (compile / bspCompileTask).value
       // This is a cacheable version
@@ -2229,7 +2237,7 @@ object Defaults extends BuildCommon {
       val store = analysisStore(compileAnalysisFile)
       val c = fileConverter.value
       // TODO - Should readAnalysis + saveAnalysis be scoped by the compile task too?
-      val analysisResult = Retry.io(compileIncrementalTaskImpl(bspTask, s, ci, ping))
+      val analysisResult = Retry.io(compileIncrementalTaskImpl(bspTask, s, ci, ping, projectId))
       val analysisOut = c.toVirtualFile(setup.cachePath())
       val contents = AnalysisContents.create(analysisResult.analysis(), analysisResult.setup())
       store.set(contents)
@@ -2245,15 +2253,17 @@ object Defaults extends BuildCommon {
   private val incCompiler = ZincUtil.defaultIncrementalCompiler
   private[sbt] def compileJavaTask: Initialize[Task[CompileResult]] = Def.task {
     val s = streams.value
+    val projectId = thisProject.value.id
     val r = compileScalaBackend.value
     val in0 = (compileJava / compileInputs).value
     val in = in0.withPreviousResult(PreviousResult.of(r.analysis, r.setup))
     val reporter = (compile / bspReporter).value
+    val log = CompileDebugLogger(projectId, s.log)
     try {
       if (r.hasModified) {
         val result0 = incCompiler
           .asInstanceOf[sbt.internal.inc.IncrementalCompilerImpl]
-          .compileAllJava(in, s.log)
+          .compileAllJava(in, log)
         reporter.sendSuccessReport(result0.analysis())
         result0.withHasModified(result0.hasModified || r.hasModified)
       } else r
@@ -2268,7 +2278,8 @@ object Defaults extends BuildCommon {
       task: BspCompileTask,
       s: TaskStreams,
       ci: Inputs,
-      promise: PromiseWrap[Boolean]
+      promise: PromiseWrap[Boolean],
+      projectId: String
   ): CompileResult = {
     lazy val x = s.text(ExportStream)
     def onArgs(cs: Compilers) =
@@ -2283,7 +2294,8 @@ object Defaults extends BuildCommon {
     val compilers: Compilers = ci.compilers
     val setup: Setup = ci.setup
     val i = ci.withCompilers(onArgs(compilers)).withSetup(onProgress(setup))
-    try incCompiler.compile(i, s.log)
+    val log = CompileDebugLogger(projectId, s.log)
+    try incCompiler.compile(i, log)
     catch
       case e: Throwable =>
         if !promise.isCompleted then
diff --git a/main/src/main/scala/sbt/internal/CompileDebugLogger.scala b/main/src/main/scala/sbt/internal/CompileDebugLogger.scala
new file mode 100644
index 000000000..a3fc26268
--- /dev/null
+++ b/main/src/main/scala/sbt/internal/CompileDebugLogger.scala
@@ -0,0 +1,39 @@
+/*
+ * sbt
+ * Copyright 2023, Scala center
+ * Copyright 2011 - 2022, Lightbend, Inc.
+ * Copyright 2008 - 2010, Mark Harrah
+ * Licensed under Apache License 2.0 (see LICENSE)
+ */
+
+package sbt.internal
+
+import java.util.function.Supplier
+import sbt.util.{ Level, Logger }
+
+/**
+ * Wraps a Logger and prefixes info and debug messages with a tag (e.g. project id).
+ * Used so that incremental compiler output (e.g. "compiling X sources", invalidations)
+ * can be attributed to a project in multi-project builds (fixes #408).
+ */
+private[sbt] object CompileDebugLogger {
+  def apply(prefix: String, delegate: Logger): Logger =
+    new Logger {
+      private def prefixed(msg: String): String =
+        if (msg == null || msg.isEmpty) s"[$prefix]"
+        else s"[$prefix] $msg"
+
+      override def log(level: Level.Value, message: => String): Unit =
+        if (level == Level.Debug || level == Level.Info)
+          delegate.log(level, prefixed(message))
+        else delegate.log(level, message)
+
+      override def log(level: Level.Value, msg: Supplier[String]): Unit =
+        if (level == Level.Debug || level == Level.Info)
+          delegate.log(level, () => prefixed(msg.get()))
+        else delegate.log(level, msg)
+
+      def trace(t: => Throwable): Unit = delegate.trace(t)
+      def success(message: => String): Unit = delegate.success(message)
+    }
+}
diff --git a/main/src/test/scala/sbt/internal/CompileDebugLoggerSpec.scala b/main/src/test/scala/sbt/internal/CompileDebugLoggerSpec.scala
new file mode 100644
index 000000000..72b0c85ce
--- /dev/null
+++ b/main/src/test/scala/sbt/internal/CompileDebugLoggerSpec.scala
@@ -0,0 +1,54 @@
+/*
+ * sbt
+ * Copyright 2023, Scala center
+ * Copyright 2011 - 2022, Lightbend, Inc.
+ * Copyright 2008 - 2010, Mark Harrah
+ * Licensed under Apache License 2.0 (see LICENSE)
+ */
+
+package sbt.internal
+
+import java.util.concurrent.CopyOnWriteArrayList
+import scala.jdk.CollectionConverters.*
+import sbt.util.{ Level, Logger }
+
+object CompileDebugLoggerSpec extends verify.BasicTestSuite {
+
+  test("CompileDebugLogger prefixes debug and info messages with project id (#408)") {
+    val messages = new CopyOnWriteArrayList[(Level.Value, String)]()
+    val delegate: Logger = new Logger {
+      def log(level: Level.Value, message: => String): Unit =
+        if (level == Level.Debug || level == Level.Info) messages.add((level, message))
+      def trace(t: => Throwable): Unit = ()
+      def success(message: => String): Unit = ()
+    }
+    val prefixed = CompileDebugLogger("myProject", delegate)
+    prefixed.debug("Initial source changes: ")
+    prefixed.debug("removed:Set()")
+    prefixed.info("compiling 1 Scala source to ...")
+    assert(messages.size() >= 3)
+    assert(messages.get(0) == (Level.Debug, "[myProject] Initial source changes: "))
+    assert(messages.get(1) == (Level.Debug, "[myProject] removed:Set()"))
+    assert(messages.get(2) == (Level.Info, "[myProject] compiling 1 Scala source to ..."))
+  }
+
+  test("CompileDebugLogger does not prefix warn/error") {
+    val allMessages = new CopyOnWriteArrayList[(Level.Value, String)]()
+    val delegate: Logger = new Logger {
+      def log(level: Level.Value, message: => String): Unit =
+        allMessages.add((level, message))
+      def trace(t: => Throwable): Unit = ()
+      def success(message: => String): Unit = ()
+    }
+    val prefixed = CompileDebugLogger("p", delegate)
+    prefixed.debug("debug msg")
+    prefixed.info("info msg")
+    prefixed.warn("warn msg")
+    prefixed.error("error msg")
+    val list = allMessages.asScala.toSeq
+    val prefixedLevels = list.filter { case (_, msg) => msg.startsWith("[p] ") }.map(_._1)
+    val notPrefixed = list.filter { case (_, msg) => !msg.startsWith("[p] ") }
+    assert(prefixedLevels.forall(l => l == Level.Debug || l == Level.Info))
+    assert(notPrefixed.map(_._1).forall(l => l == Level.Warn || l == Level.Error))
+  }
+}
diff --git a/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/a/src/main/scala/A.scala b/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/a/src/main/scala/A.scala
new file mode 100644
index 000000000..c636727e7
--- /dev/null
+++ b/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/a/src/main/scala/A.scala
@@ -0,0 +1 @@
+object A { def value: Int = 1 }
diff --git a/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/b/src/main/scala/B.scala b/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/b/src/main/scala/B.scala
new file mode 100644
index 000000000..837d74e9e
--- /dev/null
+++ b/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/b/src/main/scala/B.scala
@@ -0,0 +1 @@
+object B { def use: Int = A.value }
diff --git a/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/build.sbt b/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/build.sbt
new file mode 100644
index 000000000..fc9604be3
--- /dev/null
+++ b/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/build.sbt
@@ -0,0 +1,16 @@
+// #408: incremental compile debug output should indicate project in multi-project builds.
+// project/build.properties uses sbt 2.0.0-RC9-bin-SNAPSHOT so scripted runs with the built sbt,
+// where CompileDebugLogger prefixes debug/info lines with [projectId] (e.g. [a], [b]).
+scalaVersion := "2.12.21"
+resolvers += Resolver.mavenLocal
+
+lazy val root = (project in file("."))
+  .aggregate(a, b)
+  .settings(name := "root")
+
+lazy val a = (project in file("a"))
+  .settings(name := "a")
+
+lazy val b = (project in file("b"))
+  .dependsOn(a)
+  .settings(name := "b")
diff --git a/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/modified/A_scala b/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/modified/A_scala
new file mode 100644
index 000000000..6e0a06ee6
--- /dev/null
+++ b/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/modified/A_scala
@@ -0,0 +1,2 @@
+object A { def value: Int = 1 }
+// trigger incremental
diff --git a/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/modified/B_scala b/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/modified/B_scala
new file mode 100644
index 000000000..91962cca4
--- /dev/null
+++ b/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/modified/B_scala
@@ -0,0 +1,2 @@
+object B { def use: Int = A.value }
+// trigger incremental
diff --git a/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/test b/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/test
new file mode 100644
index 000000000..86cc51697
--- /dev/null
+++ b/sbt-app/src/sbt-test/tests/i408-debug-invalidation-prefix/test
@@ -0,0 +1,13 @@
+# #408: With logLevel Debug, incremental compile debug output should show project id per block.
+# project/build.properties sets sbt.version=2.0.0-RC9-bin-SNAPSHOT so scripted runs built sbt.
+# First compile (full), then change sources and compile again to trigger incremental compilation
+# so Zinc emits debug lines (Initial source changes, changed = Set(...), invalidated, etc.)
+# with our projectId prefix. See HOWTO-SEE-PROJECT-ID.md to view the logs.
+
+> set ThisBuild / logLevel := Level.Debug
+> a/compile
+> b/compile
+$ copy-file modified/A_scala a/src/main/scala/A.scala
+$ copy-file modified/B_scala b/src/main/scala/B.scala
+> a/compile
+> b/compile
\ No newline at end of file
diff --git a/scripted-sbt/src/main/scala/sbt/scriptedtest/ScriptedTests.scala b/scripted-sbt/src/main/scala/sbt/scriptedtest/ScriptedTests.scala
index 4c81e47b9..3750163ea 100644
--- a/scripted-sbt/src/main/scala/sbt/scriptedtest/ScriptedTests.scala
+++ b/scripted-sbt/src/main/scala/sbt/scriptedtest/ScriptedTests.scala
@@ -347,7 +347,10 @@ final class ScriptedTests(
         log.clear()
         log.error(" Pending test passed. Mark as passing to remove this failure.")
         Some(label)
-      } else None
+      } else {
+        log.play()
+        None
+      }
     }
   }
 }