diff --git a/bin/main.ml b/bin/main.ml
index 77347898..3f493c73 100644
--- a/bin/main.ml
+++ b/bin/main.ml
@@ -218,7 +218,11 @@ let common =
     let root, to_cwd =
       match root with
       | Some dn -> (dn, [])
-      | None -> find_root ()
+      | None ->
+        if Config.inside_dune then
+          (".", [])
+        else
+          find_root ()
     in
     let orig_args =
       List.concat
diff --git a/src/config.ml b/src/config.ml
index 72392e32..f877248e 100644
--- a/src/config.ml
+++ b/src/config.ml
@@ -19,6 +19,9 @@ let dev_null = Path.of_string (if Sys.win32 then "nul" else "/dev/null")
 
 let jbuilder_keep_fname = ".jbuilder-keep"
 
+let inside_emacs = Option.is_some (Env.get Env.initial "INSIDE_EMACS")
+let inside_dune  = Option.is_some (Env.get Env.initial "INSIDE_DUNE")
+
 open Sexp.Of_sexp
 
 module Display = struct
@@ -61,8 +64,8 @@ let merge t (partial : Partial.t) =
   }
 
 let default =
-  { display     = Progress
-  ; concurrency = 4
+  { display     = if inside_dune then Quiet else Progress
+  ; concurrency = if inside_dune then 1     else 4
   }
 
 let t =
@@ -86,11 +89,6 @@ let load_user_config_file () =
   else
     default
 
-let inside_emacs =
-  match Env.get Env.initial "INSIDE_EMACS" with
-  | Some _ -> true
-  | None   -> false
-
 let adapt_display config ~output_is_a_tty =
   if config.display = Progress &&
      not output_is_a_tty &&
diff --git a/src/config.mli b/src/config.mli
index c5c8cb5d..2f50db62 100644
--- a/src/config.mli
+++ b/src/config.mli
@@ -18,6 +18,9 @@ val jbuilder_keep_fname : string
 (** Are we running inside an emacs shell? *)
 val inside_emacs : bool
 
+(** Are we running insinde Dune? *)
+val inside_dune : bool
+
 (** Jbuilder configuration *)
 
 module Display : sig
diff --git a/src/main.ml b/src/main.ml
index 9e1ab887..c23e3fd4 100644
--- a/src/main.ml
+++ b/src/main.ml
@@ -20,10 +20,13 @@ let package_install_file { packages; _ } pkg =
           (Utils.install_file ~package:p.name ~findlib_toolchain:None))
 
 let setup_env ~capture_outputs =
-  if capture_outputs || not (Lazy.force Colors.stderr_supports_colors) then
-    Env.initial
-  else
-    Colors.setup_env_for_colors Env.initial
+  let env =
+    if capture_outputs || not (Lazy.force Colors.stderr_supports_colors) then
+      Env.initial
+    else
+      Colors.setup_env_for_colors Env.initial
+  in
+  Env.add env ~var:"INSIDE_DUNE" ~value:"1"
 
 let setup ?(log=Log.no_log)
       ?filter_out_optional_stanzas_with_missing_deps
diff --git a/src/main.mli b/src/main.mli
index bd5fc74a..4497bef9 100644
--- a/src/main.mli
+++ b/src/main.mli
@@ -40,5 +40,6 @@ val setup_env : capture_outputs:bool -> Env.t
 
 (**/**)
 
-(* This is used to bootstrap jbuilder itself. It is not part of the public API. *)
+(* This is used to bootstrap jbuilder itself. It is not part of the
+   public API. *)
 val bootstrap : unit -> unit