diff --git a/src/hydra-queue-runner/build-result.cc b/src/hydra-queue-runner/build-result.cc
index e7a2fda3..78b9b25c 100644
--- a/src/hydra-queue-runner/build-result.cc
+++ b/src/hydra-queue-runner/build-result.cc
@@ -27,6 +27,9 @@ BuildResult getBuildResult(std::shared_ptr<StoreAPI> store, const Derivation & d
     bool explicitProducts = false;
 
     for (auto & output : outputs) {
+        Path failedFile = output + "/nix-support/failed";
+        if (pathExists(failedFile)) res.failed = true;
+
         Path productsFile = output + "/nix-support/hydra-build-products";
         if (!pathExists(productsFile)) continue;
         explicitProducts = true;
diff --git a/src/hydra-queue-runner/build-result.hh b/src/hydra-queue-runner/build-result.hh
index bbe6fd7a..c8965345 100644
--- a/src/hydra-queue-runner/build-result.hh
+++ b/src/hydra-queue-runner/build-result.hh
@@ -17,6 +17,11 @@ struct BuildProduct
 
 struct BuildResult
 {
+    /* Whether this build has failed with output, i.e., the build
+       finished with exit code 0 but produced a file
+       $out/nix-support/failed. */
+    bool failed = false;
+
     std::string releaseName;
 
     unsigned long long closureSize = 0, size = 0;
diff --git a/src/hydra-queue-runner/hydra-queue-runner.cc b/src/hydra-queue-runner/hydra-queue-runner.cc
index 492b44a0..c5f657f4 100644
--- a/src/hydra-queue-runner/hydra-queue-runner.cc
+++ b/src/hydra-queue-runner/hydra-queue-runner.cc
@@ -930,10 +930,6 @@ MachineReservation::ptr State::findMachine(Step::ptr step)
         return std::make_shared<MachineReservation>(machine);
     }
 
-    /* FIXME: distinguish between permanent failures (a matching
-       machine doesn't exist) and temporary failures (a matching
-       machine is not available). */
-
     return 0;
 }
 
@@ -1048,8 +1044,6 @@ bool State::doBuildStep(std::shared_ptr<StoreAPI> store, Step::ptr step,
         }
 
         if (result.status == RemoteResult::rrSuccess) res = getBuildResult(store, step->drv);
-
-        // FIXME: handle failed-with-output
     }
 
     if (!result.stopTime) result.stopTime = time(0);
@@ -1181,7 +1175,7 @@ void State::markSucceededBuild(pqxx::work & txn, Build::ptr build,
     txn.parameterized
         ("update Builds set finished = 1, busy = 0, buildStatus = $2, startTime = $3, stopTime = $4, size = $5, closureSize = $6, releaseName = $7, isCachedBuild = $8 where id = $1")
         (build->id)
-        ((int) bsSuccess)
+        ((int) (res.failed ? bsFailedWithOutput : bsSuccess))
         (startTime)
         (stopTime)
         (res.size)
diff --git a/src/root/common.tt b/src/root/common.tt
index f02ed838..44f962bd 100644
--- a/src/root/common.tt
+++ b/src/root/common.tt
@@ -203,7 +203,7 @@ BLOCK renderBuildStatusIcon;
     [% ELSIF buildstatus == 4 %]
       <img src="[% c.uri_for("/static/images/forbidden_${size}.png") %]" alt="Cancelled" class="build-status" />
     [% ELSIF buildstatus == 6 %]
-      <img src="[% c.uri_for("/static/images/error_${size}.png") %]" alt="Failed (with result)" class="build-status" />
+      <img src="[% c.uri_for("/static/images/error_${size}.png") %]" alt="Failed with output" class="build-status" />
     [% ELSIF buildstatus == 7 %]
       <img src="[% c.uri_for("/static/images/warning_${size}.png") %]" alt="Timed out" class="build-status" />
     [% ELSE %]
@@ -230,7 +230,7 @@ BLOCK renderStatus;
     [% ELSIF buildstatus == 4 %]
       <span class="error">Cancelled by user</span>
     [% ELSIF buildstatus == 6 %]
-      <span class="error">Build failed (with result)</span>
+      <span class="error">Build failed with output</span>
     [% ELSIF buildstatus == 7 %]
       <span class="error">Timed out</span>
     [% ELSIF buildstatus == 9 %]