diff --git a/AUTHORS b/AUTHORS
index 33ee644ea68..f6f97e8a1b7 100644
--- a/AUTHORS
+++ b/AUTHORS
@@ -519,6 +519,7 @@ Xuan Luong
 Xuecong Liao
 Yannick Péroux
 Yao Xiao
+Yihui Zhuang
 Yoav Caspi
 Yuliang Shao
 Yusuke Kadowaki
diff --git a/changelog/13580.feature.rst b/changelog/13580.feature.rst
new file mode 100644
index 00000000000..5025fb48c28
--- /dev/null
+++ b/changelog/13580.feature.rst
@@ -0,0 +1 @@
+File paths in tracebacks can now be rendered as clickable OSC 8 terminal hyperlinks via the new ``--hyperlinks`` option (``yes``/``no``/``auto``, default ``auto``).
diff --git a/src/_pytest/_code/code.py b/src/_pytest/_code/code.py
index 3c453b15dd7..4e61171f086 100644
--- a/src/_pytest/_code/code.py
+++ b/src/_pytest/_code/code.py
@@ -1499,10 +1499,33 @@ def toterminal(self, tw: TerminalWriter) -> None:
         i = msg.find("\n")
         if i != -1:
             msg = msg[:i]
-        tw.write(self.path, bold=True, red=True)
+        path = _format_path_hyperlink(tw, self.path, self.lineno)
+        tw.write(path, bold=True, red=True)
         tw.line(f":{self.lineno}: {msg}")
 
 
+def _format_path_hyperlink(
+    tw: TerminalWriter, path: str, lineno: int | None = None
+) -> str:
+    """Wrap ``path`` in an OSC 8 terminal hyperlink when enabled.
+
+    Uses :meth:`pathlib.Path.as_uri` so the URL is a proper ``file://`` URI:
+    it percent-encodes spaces and yields ``file:///C:/...`` on Windows — a
+    hand-rolled ``f"file://{path}"`` would misparse the drive letter or spaces
+    as a hostname.
+    """
+    # getattr: mock TerminalWriters may not expose `hyperlinks`; treat absence
+    # as off so we never crash a caller that predates this feature.
+    if not getattr(tw, "hyperlinks", False):
+        return path
+    url = Path(path).absolute().as_uri()
+    if lineno is not None:
+        # `:line` is a de-facto convention (iTerm2, VSCode, kitty), not RFC 8089 —
+        # mainstream OSC 8 handlers split it off and jump to the line.
+        url = f"{url}:{lineno}"
+    return f"\x1b]8;;{url}\x1b\\{path}\x1b]8;;\x1b\\"
+
+
 @dataclasses.dataclass(eq=False)
 class ReprLocals(TerminalRepr):
     """Function local variables (pre-formatted)."""
diff --git a/src/_pytest/_io/terminalwriter.py b/src/_pytest/_io/terminalwriter.py
index 9191b4edace..4fa864b7add 100644
--- a/src/_pytest/_io/terminalwriter.py
+++ b/src/_pytest/_io/terminalwriter.py
@@ -88,6 +88,18 @@ def __init__(self, file: TextIO | None = None) -> None:
         self._current_line = ""
         self._terminal_width: int | None = None
         self.code_highlight = True
+        # OSC 8 hyperlinks: only meaningful when the terminal can render
+        # escape sequences. `create_terminal_writer` refines this from the
+        # `--hyperlinks` option; default False keeps output bare.
+        self.hyperlinks = False
+
+    @property
+    def isatty(self) -> bool:
+        """True iff the underlying file is a tty. Unlike :attr:`hasmarkup`,
+        ``--color=yes`` does not force this True, so OSC 8 auto-mode can detect
+        non-tty sinks (e.g. the pastebin plugin's StringIO)."""
+        file = self._file
+        return bool(getattr(file, "isatty", None)) and file.isatty()
 
     @property
     def fullwidth(self) -> int:
diff --git a/src/_pytest/config/__init__.py b/src/_pytest/config/__init__.py
index 96b3dd6a86a..4913c8507e3 100644
--- a/src/_pytest/config/__init__.py
+++ b/src/_pytest/config/__init__.py
@@ -2097,6 +2097,13 @@ def create_terminal_writer(
     elif config.option.code_highlight == "no":
         tw.code_highlight = False
 
+    # auto gates on tw.isatty (the actual file, not sys.stdout) so a StringIO
+    # sink like the pastebin plugin stays clean; "yes" is unconditional like
+    # --color=yes, so callers reusing output as plain text must clear
+    # tw.hyperlinks themselves. Mirrors terminalprogress per #13896.
+    want = config.option.hyperlinks
+    tw.hyperlinks = want == "yes" or (want == "auto" and tw.hasmarkup and tw.isatty)
+
     return tw
 
 
diff --git a/src/_pytest/pastebin.py b/src/_pytest/pastebin.py
index e6a1430220a..4e0b273e6e0 100644
--- a/src/_pytest/pastebin.py
+++ b/src/_pytest/pastebin.py
@@ -114,6 +114,10 @@ def pytest_terminal_summary(terminalreporter: TerminalReporter) -> None:
                 msg = terminalreporter._getfailureheadline(rep)
             file = StringIO()
             tw = create_terminal_writer(terminalreporter.config, file)
+            # The captured text is pasted as plain text, so never emit OSC 8
+            # hyperlinks (or any markup) into it — even with --hyperlinks=yes.
+            tw.hyperlinks = False
+            tw.hasmarkup = False
             rep.toterminal(tw)
             s = file.getvalue()
             assert len(s)
diff --git a/src/_pytest/terminal.py b/src/_pytest/terminal.py
index b9a65ff191e..dc8c45d4d5e 100644
--- a/src/_pytest/terminal.py
+++ b/src/_pytest/terminal.py
@@ -270,6 +270,16 @@ def pytest_addoption(parser: Parser) -> None:
         help="Whether code should be highlighted (only if --color is also enabled). "
         "Default: yes.",
     )
+    group.addoption(
+        "--hyperlinks",
+        metavar="hyperlinks",
+        action="store",
+        dest="hyperlinks",
+        default="auto",
+        choices=["yes", "no", "auto"],
+        help="Render file paths as OSC 8 terminal hyperlinks (yes/no/auto). "
+        "Auto enables them only when the terminal supports markup. Default: auto.",
+    )
 
     parser.addini(
         "console_output_style",
diff --git a/testing/test_terminal.py b/testing/test_terminal.py
index 3053f5ef9a1..09a69740e1e 100644
--- a/testing/test_terminal.py
+++ b/testing/test_terminal.py
@@ -19,6 +19,7 @@
 from _pytest._io.wcwidth import wcswidth
 import _pytest.config
 from _pytest.config import Config
+from _pytest.config import create_terminal_writer
 from _pytest.config import ExitCode
 from _pytest.monkeypatch import MonkeyPatch
 from _pytest.pytester import Pytester
@@ -3548,3 +3549,112 @@ def test_session_lifecycle(
         # Session finish - should remove progress.
         plugin.pytest_sessionfinish()
         assert "\x1b]9;4;0;\x1b\\" in mock_file.getvalue()
+
+
+def test_hyperlinks_yes_emits_osc8(pytester: Pytester) -> None:
+    """--hyperlinks=yes wraps file paths in OSC 8 escape sequences."""
+    pytester.makepyfile(
+        """
+        def test_fail():
+            assert 0
+        """
+    )
+    result = pytester.runpytest("--hyperlinks=yes", "--color=yes")
+    # OSC 8 hyperlink wrapper: \x1b]8;;URL\x1b\\TEXT\x1b]8;;\x1b\\
+    output = result.stdout.str()
+    assert "\x1b]8;;file://" in output
+    assert "\x1b\\test_hyperlinks_yes_emits_osc8.py\x1b]8;;\x1b\\" in output
+
+
+def test_hyperlinks_yes_percent_encodes_spaces(pytester: Pytester) -> None:
+    """Paths with spaces are percent-encoded in the file:// URL (#13580)."""
+    # Put the test file in a directory whose name has a space, so the absolute
+    # path passed to Path.as_uri() contains a space that must be encoded.
+    spaced = pytester.path / "with space"
+    spaced.mkdir()
+    (spaced / "test_fail.py").write_text(
+        "def test_fail():\n    assert 0\n", encoding="utf-8"
+    )
+    result = pytester.runpytest(
+        "--hyperlinks=yes", "--color=yes", str(spaced / "test_fail.py")
+    )
+    output = result.stdout.str()
+    # The URL must encode the space; a raw space would make the URI invalid and
+    # terminals would truncate the link at the space.
+    assert "file://" in output
+    assert "%20" in output
+
+
+def test_hyperlinks_no_no_osc8(pytester: Pytester) -> None:
+    """--hyperlinks=no never emits OSC 8 sequences, even with color on."""
+    pytester.makepyfile(
+        """
+        def test_fail():
+            assert 0
+        """
+    )
+    result = pytester.runpytest("--hyperlinks=no", "--color=yes")
+    assert "\x1b]8;;" not in result.stdout.str()
+
+
+def test_hyperlinks_auto_off_when_not_tty(pytester: Pytester) -> None:
+    """Auto (the default) emits no OSC 8 when stdout is captured/not a tty.
+
+    pytester.runpytest captures the subprocess stdout, so it is not a tty —
+    auto mode must not emit hyperlinks, keeping CI/captured output clean.
+    """
+    pytester.makepyfile(
+        """
+        def test_fail():
+            assert 0
+        """
+    )
+    result = pytester.runpytest("--color=yes")  # --hyperlinks defaults to auto
+    assert "\x1b]8;;" not in result.stdout.str()
+
+
+def test_hyperlinks_auto_off_for_non_tty_sink(pytester: Pytester) -> None:
+    """Auto must gate on isatty, not hasmarkup — --color=yes forces hasmarkup
+    True even for a StringIO, so hasmarkup-only gating would leak OSC 8."""
+    config = pytester.parseconfigure("--color=yes")  # --hyperlinks defaults to auto
+    tw = create_terminal_writer(config, StringIO())
+    assert tw.hasmarkup  # --color=yes forces markup on
+    assert not tw.isatty  # but StringIO is not a tty
+    assert not tw.hyperlinks  # so auto must keep hyperlinks off
+
+
+def test_hyperlinks_yes_forces_on(pytester: Pytester) -> None:
+    """--hyperlinks=yes forces on even for a non-tty sink, unlike auto.
+
+    ``yes`` is unconditional like ``--color=yes``: a user who explicitly asks
+    for hyperlinks gets them regardless of isatty/hasmarkup. Callers that
+    capture output for plain-text reuse (the pastebin plugin) must clear
+    ``tw.hyperlinks`` themselves — see pastebin.py.
+    """
+    config = pytester.parseconfigure("--hyperlinks=yes", "--color=no")
+    tw = create_terminal_writer(config, StringIO())
+    assert not tw.isatty  # StringIO is not a tty
+    assert not tw.hasmarkup  # --color=no
+    assert tw.hyperlinks  # yes forces on anyway
+
+
+def test_format_path_hyperlink_branches() -> None:
+    """Cover _format_path_hyperlink's branches: disabled, lineno=None, lineno set."""
+    from _pytest._code.code import _format_path_hyperlink
+    from _pytest._io import TerminalWriter
+
+    tw = TerminalWriter(file=StringIO())
+    # Disabled: bare path returned unchanged.
+    tw.hyperlinks = False
+    assert _format_path_hyperlink(tw, "test_x.py", 5) == "test_x.py"
+
+    tw.hyperlinks = True
+    # lineno=None (e.g. doctest ReprFileLocation): URL has no :line suffix.
+    out = _format_path_hyperlink(tw, "test_x.py", None)
+    assert out.startswith("\x1b]8;;file://")
+    assert ":5" not in out
+    assert out.endswith("\x1b\\test_x.py\x1b]8;;\x1b\\")
+    # lineno set: URL carries :line.
+    out = _format_path_hyperlink(tw, "test_x.py", 5)
+    assert "\x1b]8;;file://" in out
+    assert ":5\x1b\\" in out