diff --git a/CHANGELOG b/CHANGELOG
index dd35ee914..97cf30dd1 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -1,3 +1,8 @@
+Changes between 2.2.4 and 2.2.5.dev
+-----------------------------------
+
+- fix issue128: show captured output when capsys/capfd are used
+
 Changes between 2.2.3 and 2.2.4
 -----------------------------------
 
diff --git a/_pytest/__init__.py b/_pytest/__init__.py
index 1febee1e1..8f181ddf4 100644
--- a/_pytest/__init__.py
+++ b/_pytest/__init__.py
@@ -1,2 +1,2 @@
 #
-__version__ = '2.2.4'
+__version__ = '2.2.5.dev1'
diff --git a/_pytest/capture.py b/_pytest/capture.py
index dad9c73fe..221218266 100644
--- a/_pytest/capture.py
+++ b/_pytest/capture.py
@@ -121,20 +121,21 @@ class CaptureManager:
     def activate_funcargs(self, pyfuncitem):
         if not hasattr(pyfuncitem, 'funcargs'):
             return
-        assert not hasattr(self, '_capturing_funcargs')
-        self._capturing_funcargs = capturing_funcargs = []
+        assert not hasattr(self, '_capturing_funcarg')
+        capargs = []
         for name, capfuncarg in pyfuncitem.funcargs.items():
             if name in ('capsys', 'capfd'):
-                capturing_funcargs.append(capfuncarg)
-                capfuncarg._start()
+                capargs.append(capfuncarg)
+        if capargs:
+            self._capturing_funcarg = capargs[0]
+            self._capturing_funcarg._start()
 
     def deactivate_funcargs(self):
-        capturing_funcargs = getattr(self, '_capturing_funcargs', None)
-        if capturing_funcargs is not None:
-            while capturing_funcargs:
-                capfuncarg = capturing_funcargs.pop()
-                capfuncarg._finalize()
-            del self._capturing_funcargs
+        capturing_funcarg = getattr(self, '_capturing_funcarg', None)
+        if capturing_funcarg:
+            outerr = capturing_funcarg._finalize()
+            del self._capturing_funcarg
+            return outerr
 
     def pytest_make_collect_report(self, __multicall__, collector):
         method = self._getmethod(collector.config, collector.fspath)
@@ -169,9 +170,12 @@ class CaptureManager:
 
     @pytest.mark.tryfirst
     def pytest_runtest_makereport(self, __multicall__, item, call):
-        self.deactivate_funcargs()
+        funcarg_outerr = self.deactivate_funcargs()
         rep = __multicall__.execute()
         outerr = self.suspendcapture(item)
+        if funcarg_outerr is not None:
+            outerr = (outerr[0] + funcarg_outerr[0],
+                      outerr[1] + funcarg_outerr[1])
         if not rep.passed:
             addouterr(rep, outerr)
         if not rep.passed or rep.when == "teardown":
@@ -179,11 +183,15 @@ class CaptureManager:
         item.outerr = outerr
         return rep
 
+error_capsysfderror = "cannot use capsys and capfd at the same time"
+
 def pytest_funcarg__capsys(request):
     """enables capturing of writes to sys.stdout/sys.stderr and makes
     captured output available via ``capsys.readouterr()`` method calls
     which return a ``(out, err)`` tuple.
     """
+    if "capfd" in request._funcargs:
+        raise request.LookupError(error_capsysfderror)
     return CaptureFuncarg(py.io.StdCapture)
 
 def pytest_funcarg__capfd(request):
@@ -191,8 +199,10 @@ def pytest_funcarg__capfd(request):
     captured output available via ``capsys.readouterr()`` method calls
     which return a ``(out, err)`` tuple.
     """
+    if "capsys" in request._funcargs:
+        raise request.LookupError(error_capsysfderror)
     if not hasattr(os, 'dup'):
-        py.test.skip("capfd funcarg needs os.dup")
+        pytest.skip("capfd funcarg needs os.dup")
     return CaptureFuncarg(py.io.StdCaptureFD)
 
 class CaptureFuncarg:
@@ -204,8 +214,9 @@ class CaptureFuncarg:
 
     def _finalize(self):
         if hasattr(self, 'capture'):
-            self.capture.reset()
+            outerr = self.capture.reset()
             del self.capture
+            return outerr
 
     def readouterr(self):
         return self.capture.readouterr()
diff --git a/setup.py b/setup.py
index aa96b4e84..22dac2943 100644
--- a/setup.py
+++ b/setup.py
@@ -24,7 +24,7 @@ def main():
         name='pytest',
         description='py.test: simple powerful testing with Python',
         long_description = long_description,
-        version='2.2.4',
+        version='2.2.5.dev1',
         url='http://pytest.org',
         license='MIT license',
         platforms=['unix', 'linux', 'osx', 'cygwin', 'win32'],
diff --git a/testing/test_capture.py b/testing/test_capture.py
index 2cfd013a9..b23846425 100644
--- a/testing/test_capture.py
+++ b/testing/test_capture.py
@@ -373,6 +373,33 @@ class TestCaptureFuncarg:
         """)
         reprec.assertoutcome(passed=1)
 
+    def test_capsyscapfd(self, testdir):
+        p = testdir.makepyfile("""
+            def test_one(capsys, capfd):
+                pass
+            def test_two(capfd, capsys):
+                pass
+        """)
+        result = testdir.runpytest(p)
+        result.stdout.fnmatch_lines([
+            "*ERROR*setup*test_one*",
+            "*capsys*capfd*same*time*",
+            "*ERROR*setup*test_two*",
+            "*capsys*capfd*same*time*",
+            "*2 error*"])
+
+    @pytest.mark.parametrize("method", ["sys", "fd"])
+    def test_capture_is_represented_on_failure_issue128(self, testdir, method):
+        p = testdir.makepyfile("""
+            def test_hello(cap%s):
+                print ("xxx42xxx")
+                assert 0
+        """ % method)
+        result = testdir.runpytest(p)
+        result.stdout.fnmatch_lines([
+            "xxx42xxx",
+        ])
+
     @needsosdup
     def test_stdfd_functional(self, testdir):
         reprec = testdir.inline_runsource("""