diff --git a/CHANGES.md b/CHANGES.md
index b326a0139d1..bab9c24c84e 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -7,6 +7,9 @@
 
 ### Highlights
 
+- Improve parse error readability by showing multi-line output with an error pointer.
+  (#5068)
+
 <!-- Include any especially major or disruptive changes here -->
 
 ### Stable style
diff --git a/docs/usage_and_configuration/the_basics.md b/docs/usage_and_configuration/the_basics.md
index 738a9793bbb..7cfefdb0657 100644
--- a/docs/usage_and_configuration/the_basics.md
+++ b/docs/usage_and_configuration/the_basics.md
@@ -353,7 +353,10 @@ silenced by `2>/dev/null`).
 
 ```console
 $ black src/ -q
-error: cannot format src/black_primer/cli.py: Cannot parse: 5:6: mport asyncio
+error: cannot format src/black_primer/cli.py: Cannot parse: 5:6
+    import asyncio
+          ^
+ParseError: invalid syntax
 ```
 
 #### `-v`, `--verbose`
@@ -368,7 +371,10 @@ Using configuration from /tmp/pyproject.toml.
 src/blib2to3 ignored: matches the --extend-exclude regular expression
 src/_black_version.py wasn't modified on disk since last run.
 src/black/__main__.py wasn't modified on disk since last run.
-error: cannot format src/black_primer/cli.py: Cannot parse: 5:6: mport asyncio
+error: cannot format src/black_primer/cli.py: Cannot parse: 5:6
+    mport asyncio
+          ^
+ParseError: invalid syntax
 reformatted src/black_primer/lib.py
 reformatted src/blackd/__init__.py
 reformatted src/black/__init__.py
@@ -443,7 +449,10 @@ plus a short summary.
 
 ```console
 $ black src/
-error: cannot format src/black_primer/cli.py: Cannot parse: 5:6: mport asyncio
+error: cannot format src/black_primer/cli.py: Cannot parse: 5:6
+    mport asyncio
+          ^
+ParseError: invalid syntax
 reformatted src/black_primer/lib.py
 reformatted src/blackd/__init__.py
 reformatted src/black/__init__.py
diff --git a/src/black/parsing.py b/src/black/parsing.py
index cb4f715dcb3..1203426d6fc 100644
--- a/src/black/parsing.py
+++ b/src/black/parsing.py
@@ -80,17 +80,27 @@ def lib2to3_parse(
                 faulty_line = lines[lineno - 1]
             except IndexError:
                 faulty_line = "<line number missing in source>"
-            errors[grammar.version] = InvalidInput(
-                f"Cannot parse{tv_str}: {lineno}:{column}: {faulty_line}"
+            error_msg = (
+                f"Cannot parse{tv_str}: {lineno}:{column}\n"
+                f"    {faulty_line}\n"
+                f"    {' ' * (column - 1)}^\n"
+                f"ParseError: {pe.msg}"
             )
 
+            errors[grammar.version] = InvalidInput(error_msg)
+
         except TokenError as te:
             # In edge cases these are raised; and typically don't have a "faulty_line".
             lineno, column = te.args[1]
-            errors[grammar.version] = InvalidInput(
-                f"Cannot parse{tv_str}: {lineno}:{column}: {te.args[0]}"
+            error_msg = (
+                f"Cannot parse{tv_str}: {lineno}:{column}\n"
+                f"    {te.args[0]}\n"
+                f"    {' ' * (column - 1)}^\n"
+                f"TokenError: {te.args[0]}"
             )
 
+        errors[grammar.version] = InvalidInput(error_msg)
+
     else:
         # Choose the latest version when raising the actual parsing error.
         assert len(errors) >= 1
diff --git a/tests/test_black.py b/tests/test_black.py
index 862679feef4..5ecf10702cc 100644
--- a/tests/test_black.py
+++ b/tests/test_black.py
@@ -1025,8 +1025,13 @@ def test_format_file_contents(self) -> None:
         invalid = "return if you can"
         with self.assertRaises(black.InvalidInput) as e:
             black.format_file_contents(invalid, mode=mode, fast=False)
-        self.assertEqual(str(e.exception), "Cannot parse: 1:7: return if you can")
-
+        self.assertEqual(
+            str(e.exception),
+            "Cannot parse: 1:7\n"
+            "    return if you can\n"
+            "          ^\n"
+            "ParseError: invalid syntax",
+        )
         just_crlf = "\r\n"
         with self.assertRaises(black.NothingChanged):
             black.format_file_contents(just_crlf, mode=mode, fast=False)
@@ -1985,7 +1990,12 @@ def test_for_handled_unexpected_eof_error(self) -> None:
         with pytest.raises(black.parsing.InvalidInput) as exc_info:
             black.lib2to3_parse("print(", {})
 
-        exc_info.match("Cannot parse: 1:6: Unexpected EOF in multi-line statement")
+    exc_info.match(
+        "Cannot parse: 1:6\n"
+        "    Unexpected EOF in multi-line statement\n"
+        "         ^\n"
+        "TokenError: Unexpected EOF in multi-line statement"
+    )
 
     def test_line_ranges_with_code_option(self) -> None:
         code = textwrap.dedent("""\
diff --git a/tests/test_format.py b/tests/test_format.py
index 31c44b9fa90..14704ec1525 100644
--- a/tests/test_format.py
+++ b/tests/test_format.py
@@ -89,5 +89,8 @@ def test_patma_invalid() -> None:
         assert_format(source, expected, mode, minimum_version=(3, 10))
 
     exc_info.match(
-        "Cannot parse for target version Python 3.10: 10:11:     case a := b:"
+        "Cannot parse for target version Python 3.10: 10:11\n"
+        "    case a := b:\n"
+        "          ^\n"
+        "ParseError: invalid syntax"
     )