diff --git a/CHANGES.md b/CHANGES.md
index 1068d65..9149843 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -2,6 +2,16 @@
 
 ## bunyan 0.14.6 (not yet released)
 
+- [issue #49] Allow a `log.child()` to specify the level of inherited streams.
+  For example:
+
+        # Before
+        var childLog = log.child({...});
+        childLog.level('debug');
+
+        # After
+        var childLog = log.child({..., level: 'debug'});
+
 - Improve the crash message to make it easier to provide relevant details in a
   bug report.
 
diff --git a/lib/bunyan.js b/lib/bunyan.js
index b62b9e9..f2cfd81 100644
--- a/lib/bunyan.js
+++ b/lib/bunyan.js
@@ -238,9 +238,8 @@ function Logger(options, _childOptions, _childSimple) {
       throw new TypeError('invalid options.name: child cannot set logger name');
     }
   }
-  if ((options.stream || options.level) && options.streams) {
-    throw new TypeError(
-      'cannot mix "streams" with "stream" or "level" options');
+  if (options.stream && options.streams) {
+    throw new TypeError('cannot mix "streams" and "stream" options');
   }
   if (options.streams && !Array.isArray(options.streams)) {
     throw new TypeError('invalid options.streams: must be an array')
@@ -289,6 +288,9 @@ function Logger(options, _childOptions, _childSimple) {
     this.serializers = objCopy(parent.serializers);
     this.src = parent.src;
     this.fields = objCopy(parent.fields);
+    if (options.level) {
+      this.level(options.level);
+    }
   } else {
     this._level = Number.POSITIVE_INFINITY;
     this.streams = [];
@@ -314,6 +316,8 @@ function Logger(options, _childOptions, _childSimple) {
 
     if (s.level) {
       s.level = resolveLevel(s.level);
+    } else if (options.level) {
+      s.level = resolveLevel(options.level);
     } else {
       s.level = INFO;
     }
@@ -370,7 +374,8 @@ function Logger(options, _childOptions, _childSimple) {
     });
   }
 
-  // Handle *config* options.
+  // Handle *config* options (i.e. options that are not just plain data
+  // for log records).
   if (options.stream) {
     addStream({
       type: 'stream',
@@ -380,6 +385,8 @@ function Logger(options, _childOptions, _childSimple) {
     });
   } else if (options.streams) {
     options.streams.forEach(addStream);
+  } else if (parent && options.level) {
+    this.level(options.level);
   } else if (!parent) {
     addStream({
       type: 'stream',
@@ -439,9 +446,12 @@ util.inherits(Logger, EventEmitter);
  * @param options {Object} Optional. Set of options to apply to the child.
  *    All of the same options for a new Logger apply here. Notes:
  *      - The parent's streams are inherited and cannot be removed in this
- *        call.
+ *        call. Any given `streams` are *added* to the set inherited from
+ *        the parent.
  *      - The parent's serializers are inherited, though can effectively be
  *        overwritten by using duplicate keys.
+ *      - Can use `level` to set the level of the streams inherited from
+ *        the parent. The level for the parent is NOT affected.
  * @param simple {Boolean} Optional. Set to true to assert that `options`
  *    (a) only add fields (no config) and (b) no serialization handling is
  *    required for them. IOW, this is a fast path for frequent child
diff --git a/test/child-behaviour.test.js b/test/child-behaviour.test.js
new file mode 100644
index 0000000..a59e8ad
--- /dev/null
+++ b/test/child-behaviour.test.js
@@ -0,0 +1,127 @@
+/*
+ * Copyright (c) 2012 Trent Mick. All rights reserved.
+ *
+ * Test some `<Logger>.child(...)` behaviour.
+ */
+
+var test = require('tap').test;
+var bunyan = require('../lib/bunyan');
+
+function CapturingStream(recs) {
+  this.recs = recs || [];
+}
+CapturingStream.prototype.write = function (rec) {
+  this.recs.push(rec);
+}
+
+
+
+test('child can add stream', function (t) {
+  var dadStream = new CapturingStream();
+  var dad = bunyan.createLogger({
+    name: 'surname',
+    streams: [{
+      type: 'raw',
+      stream: dadStream,
+      level: 'info'
+    }]
+  });
+
+  var sonStream = new CapturingStream();
+  var son = dad.child({
+    component: 'son',
+    streams: [{
+      type: 'raw',
+      stream: sonStream,
+      level: 'debug'
+    }]
+  });
+
+  dad.info('info from dad');
+  dad.debug('debug from dad');
+  son.debug('debug from son');
+
+  var rec;
+  t.equal(dadStream.recs.length, 1);
+  rec = dadStream.recs[0];
+  t.equal(rec.msg, 'info from dad');
+  t.equal(sonStream.recs.length, 1);
+  rec = sonStream.recs[0];
+  t.equal(rec.msg, 'debug from son');
+
+  t.end();
+});
+
+
+test('child can set level of inherited streams', function (t) {
+  var dadStream = new CapturingStream();
+  var dad = bunyan.createLogger({
+    name: 'surname',
+    streams: [{
+      type: 'raw',
+      stream: dadStream,
+      level: 'info'
+    }]
+  });
+
+  // Intention here is that the inherited `dadStream` logs at 'debug' level
+  // for the son.
+  var son = dad.child({
+    component: 'son',
+    level: 'debug'
+  });
+
+  dad.info('info from dad');
+  dad.debug('debug from dad');
+  son.debug('debug from son');
+
+  var rec;
+  t.equal(dadStream.recs.length, 2);
+  rec = dadStream.recs[0];
+  t.equal(rec.msg, 'info from dad');
+  rec = dadStream.recs[1];
+  t.equal(rec.msg, 'debug from son');
+
+  t.end();
+});
+
+
+test('child can set level of inherited streams and add streams', function (t) {
+  var dadStream = new CapturingStream();
+  var dad = bunyan.createLogger({
+    name: 'surname',
+    streams: [{
+      type: 'raw',
+      stream: dadStream,
+      level: 'info'
+    }]
+  });
+
+  // Intention here is that the inherited `dadStream` logs at 'debug' level
+  // for the son.
+  var sonStream = new CapturingStream();
+  var son = dad.child({
+    component: 'son',
+    level: 'trace',
+    streams: [{
+      type: 'raw',
+      stream: sonStream,
+      level: 'debug'
+    }]
+  });
+
+  dad.info('info from dad');
+  dad.trace('trace from dad');
+  son.trace('trace from son');
+  son.debug('debug from son');
+
+  t.equal(dadStream.recs.length, 3);
+  t.equal(dadStream.recs[0].msg, 'info from dad');
+  t.equal(dadStream.recs[1].msg, 'trace from son');
+  t.equal(dadStream.recs[2].msg, 'debug from son');
+
+  t.equal(sonStream.recs.length, 1);
+  t.equal(sonStream.recs[0].msg, 'debug from son');
+
+  t.end();
+});
diff --git a/test/ctor.test.js b/test/ctor.test.js
index 9db59be..a5c0bcc 100644
--- a/test/ctor.test.js
+++ b/test/ctor.test.js
@@ -26,10 +26,6 @@ test('ensure Logger creation options', function (t) {
   t.throws(function () { new Logger(options); },
     'cannot use "stream" and "streams"');
 
-  options = {name: 'foo', level: 'info', streams: []};
-  t.throws(function () { new Logger(options); },
-    'cannot use "level" and "streams"');
-
   // https://github.com/trentm/node-bunyan/issues/3
   options = {name: 'foo', streams: {}};
   t.throws(function () { new Logger(options); },
@@ -72,10 +68,6 @@ test('ensure Logger creation options (createLogger)', function (t) {
   t.throws(function () { bunyan.createLogger(options); },
     'cannot use "stream" and "streams"');
 
-  options = {name: 'foo', level: 'info', streams: []};
-  t.throws(function () { bunyan.createLogger(options); },
-    'cannot use "level" and "streams"');
-
   // https://github.com/trentm/node-bunyan/issues/3
   options = {name: 'foo', streams: {}};
   t.throws(function () { bunyan.createLogger(options); },
@@ -122,10 +114,6 @@ test('ensure Logger child() options', function (t) {
   t.throws(function () { log.child(options); },
     'cannot use "stream" and "streams"');
 
-  options = {level: 'info', streams: []};
-  t.throws(function () { log.child(options); },
-    'cannot use "level" and "streams"');
-
   // https://github.com/trentm/node-bunyan/issues/3
   options = {streams: {}};
   t.throws(function () { log.child(options); },