diff --git a/CHANGELOG b/CHANGELOG
index 78c7e4f25..629e99199 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -35,6 +35,8 @@ Changes between 2.2.4 and 2.3.0.dev
 
 - fix issue128: show captured output when capsys/capfd are used
 
+- fix issue179: propperly show the dependency chain of factories
+
 - pluginmanager.register(...) now raises ValueError if the
   plugin has been already registered or the name is taken
 
diff --git a/_pytest/python.py b/_pytest/python.py
index 6e1841605..c67cafbdf 100644
--- a/_pytest/python.py
+++ b/_pytest/python.py
@@ -1211,8 +1211,14 @@ class FuncargLookupErrorRepr(TerminalRepr):
 
     def toterminal(self, tw):
         tw.line()
-        for line in self.factblines or []:
-            tw.line(line)
+        if self.factblines:
+            tw.line('    dependency of:')
+            for factorydef in self.factblines:
+                tw.line('        %s in %s' % (
+                    factorydef.argname,
+                    factorydef.baseid,
+                ))
+            tw.line()
         for line in self.deflines:
             tw.line("    " + line.strip())
         for line in self.errorstring.split("\n"):
diff --git a/testing/test_python.py b/testing/test_python.py
index a34a74191..c97810514 100644
--- a/testing/test_python.py
+++ b/testing/test_python.py
@@ -1664,8 +1664,7 @@ class TestFuncargFactory:
             "*2 passed*"
         ])
 
-    @pytest.mark.xfail(reason="factorydef passed to tw.line")
-    def test_factory_uses_unknown_funcarg_error(self, testdir):
+    def test_factory_uses_unknown_funcarg_as_dependency_error(self, testdir):
         testdir.makepyfile("""
             import pytest
 
@@ -1682,7 +1681,10 @@ class TestFuncargFactory:
             """)
         result = testdir.runpytest()
         result.stdout.fnmatch_lines([
-            "*LookupError: no factory found for argument 'missing'"
+            "*dependency of:*",
+            "*call_fail*",
+            "*def fail(*",
+            "*LookupError: no factory found for argument 'missing'",
         ])