diff --git a/pydantic_ai_slim/pydantic_ai/prompt.py b/pydantic_ai_slim/pydantic_ai/prompt.py
index 67c849d7..6dc2d336 100644
--- a/pydantic_ai_slim/pydantic_ai/prompt.py
+++ b/pydantic_ai_slim/pydantic_ai/prompt.py
@@ -189,29 +189,46 @@ def __init__(self, tag: str, content: Any):
         self._tag = tag
         self._content = prepare_content(content)
 
-    def build(self) -> str:
+    def build(self, indent: bool = True) -> str:
         """Build the XML string representation of the content.
 
+        Args:
+            indent: If True, format the output with 2-space indentation.
+                   Default is True.
+
         Returns:
             A string containing the XML representation of the content.
             Special characters are properly escaped, and boolean values are
             converted to lowercase 'true'/'false'.
 
         Examples:
-            >>> XMLTagBuilder('user', {'name': 'John'}).build()
-            '<user><name>John</name></user>'
+            >>> print(XMLTagBuilder('user', {'name': 'John'}).build(indent=False))
+            <user><name>John</name></user>
+
+            >>> print(XMLTagBuilder('user', {'name': 'John'}).build())
+            <user>
+              <name>John</name>
+            </user>
 
-            >>> XMLTagBuilder('items', [1, 2]).build()
-            '<items>1</items><items>2</items>'
+            >>> print(XMLTagBuilder('items', [1, 2]).build())
+            <items>1</items>
+            <items>2</items>
         """
         elements = self._build_element(self._tag, self._content)
 
         if isinstance(elements, list):
+            if indent:
+                return '\n'.join(
+                    ET.indent(element, space='  ') or ET.tostring(element, encoding='unicode', method='xml').strip()
+                    for element in cast(list[ET.Element], elements)
+                )
             return ''.join(
                 ET.tostring(element, encoding='unicode', method='xml').strip()
                 for element in cast(list[ET.Element], elements)
             )
 
+        if indent:
+            ET.indent(elements, space='  ')
         return ET.tostring(elements, encoding='unicode', method='xml').strip()
 
     def _build_element(self, tag: str, content: Content) -> XMLContent:
diff --git a/tests/test_prompt.py b/tests/test_prompt.py
index d81c7940..8ccc004d 100644
--- a/tests/test_prompt.py
+++ b/tests/test_prompt.py
@@ -233,7 +233,7 @@ class TestXMLContentFormatting:
     )
     def test_simple_schema(self, content: Any) -> None:
         builder = XMLTagBuilder('context', content)
-        got = builder.build()
+        got = builder.build(indent=False)
 
         assert got == '<context><age>42</age><location><country>UK</country><city>London</city></location></context>'
 
@@ -256,7 +256,7 @@ def test_simple_schema(self, content: Any) -> None:
     )
     def test_list(self, content: Any) -> None:
         builder = XMLTagBuilder('examples', content)
-        got = builder.build()
+        got = builder.build(indent=False)
 
         assert (
             got
@@ -268,23 +268,54 @@ def test_dict_with_list(self) -> None:
             'context',
             {'users': ['John', 'Jane']},
         )
-        got = builder.build()
+        got = builder.build(indent=False)
 
         assert got == '<context><users>John</users><users>Jane</users></context>'
 
     def test_str(self) -> None:
         rules = ['Rule #1', 'Rule #2']
         builder = XMLTagBuilder('rules', '\n'.join(f'- {rule}' for rule in rules))
-        got = builder.build()
+        got = builder.build(indent=False)
 
         assert got == '<rules>- Rule #1\n- Rule #2</rules>'
 
     def test_escaping(self) -> None:
         builder = XMLTagBuilder('user', {'name': '</name>John & Jane', 'age': 30})
-        got = builder.build()
+        got = builder.build(indent=False)
 
         assert got == '<user><name>&lt;/name&gt;John &amp; Jane</name><age>30</age></user>'
 
+    def test_indent(self) -> None:
+        builder = XMLTagBuilder('user', {'name': 'John', 'age': 30})
+        got = builder.build(indent=True)
+
+        assert got == '\n'.join(
+            line
+            for line in (
+                '<user>',
+                '  <name>John</name>',
+                '  <age>30</age>',
+                '</user>',
+            )
+        )
+
+    def test_indent_list(self) -> None:
+        builder = XMLTagBuilder(
+            'context',
+            {'users': ['John', 'Jane']},
+        )
+        got = builder.build(indent=True)
+
+        assert got == '\n'.join(
+            line
+            for line in (
+                '<context>',
+                '  <users>John</users>',
+                '  <users>Jane</users>',
+                '</context>',
+            )
+        )
+
 
 @pytest.mark.parametrize(
     ['tag', 'function'],