diff --git a/py/_io/terminalwriter.py b/py/_io/terminalwriter.py
index be559867..442ca239 100644
--- a/py/_io/terminalwriter.py
+++ b/py/_io/terminalwriter.py
@@ -133,6 +133,8 @@ def should_do_markup(file):
         return True
     if os.environ.get('PY_COLORS') == '0':
         return False
+    if 'NO_COLOR' in os.environ:
+        return False
     return hasattr(file, 'isatty') and file.isatty() \
            and os.environ.get('TERM') != 'dumb' \
            and not (sys.platform.startswith('java') and os._name == 'nt')
diff --git a/testing/io_/test_terminalwriter.py b/testing/io_/test_terminalwriter.py
index 1eef7f7d..44b4f1dd 100644
--- a/testing/io_/test_terminalwriter.py
+++ b/testing/io_/test_terminalwriter.py
@@ -303,3 +303,39 @@ def test_should_do_markup_PY_COLORS_eq_0(monkeypatch):
     tw.line("hello", bold=True)
     s = f.getvalue()
     assert s == "hello\n"
+
+def test_should_do_markup(monkeypatch):
+    monkeypatch.delenv("PY_COLORS", raising=False)
+    monkeypatch.delenv("NO_COLOR", raising=False)
+
+    should_do_markup = terminalwriter.should_do_markup
+
+    f = py.io.TextIO()
+    f.isatty = lambda: True
+
+    assert should_do_markup(f) is True
+
+    # NO_COLOR without PY_COLORS.
+    monkeypatch.setenv("NO_COLOR", "0")
+    assert should_do_markup(f) is False
+    monkeypatch.setenv("NO_COLOR", "1")
+    assert should_do_markup(f) is False
+    monkeypatch.setenv("NO_COLOR", "any")
+    assert should_do_markup(f) is False
+
+    # PY_COLORS overrides NO_COLOR ("0" and "1" only).
+    monkeypatch.setenv("PY_COLORS", "1")
+    assert should_do_markup(f) is True
+    monkeypatch.setenv("PY_COLORS", "0")
+    assert should_do_markup(f) is False
+    # Uses NO_COLOR.
+    monkeypatch.setenv("PY_COLORS", "any")
+    assert should_do_markup(f) is False
+    monkeypatch.delenv("NO_COLOR")
+    assert should_do_markup(f) is True
+
+    # Back to defaults.
+    monkeypatch.delenv("PY_COLORS")
+    assert should_do_markup(f) is True
+    f.isatty = lambda: False
+    assert should_do_markup(f) is False