diff --git a/compressor/__init__.py b/compressor/__init__.py
index e52b92a..248bbe3 100644
--- a/compressor/__init__.py
+++ b/compressor/__init__.py
@@ -151,12 +151,15 @@ class Compressor(object):
         context['url'] = self.storage.url(self.new_filepath)
         return render_to_string(self.template_name, context)
 
+    def output_inline(self):
+        return render_to_string(self.template_name_inline, {'content': settings.COMPRESS and self.combined or self.concat()})
 
 class CssCompressor(Compressor):
 
     def __init__(self, content, output_prefix="css"):
         self.extension = ".css"
         self.template_name = "compressor/css.html"
+        self.template_name_inline = "compressor/css_inline.html"
         self.filters = ['compressor.filters.css_default.CssAbsoluteFilter']
         self.filters.extend(settings.COMPRESS_CSS_FILTERS)
         self.type = 'css'
@@ -208,6 +211,7 @@ class JsCompressor(Compressor):
     def __init__(self, content, output_prefix="js"):
         self.extension = ".js"
         self.template_name = "compressor/js.html"
+        self.template_name_inline = "compressor/js_inline.html"
         self.filters = settings.COMPRESS_JS_FILTERS
         self.type = 'js'
         super(JsCompressor, self).__init__(content, output_prefix)
diff --git a/compressor/templates/compressor/css_inline.html b/compressor/templates/compressor/css_inline.html
new file mode 100644
index 0000000..83253f8
--- /dev/null
+++ b/compressor/templates/compressor/css_inline.html
@@ -0,0 +1 @@
+<style type="text/css">{{ content }}</style>
\ No newline at end of file
diff --git a/compressor/templates/compressor/js_inline.html b/compressor/templates/compressor/js_inline.html
new file mode 100644
index 0000000..6931349
--- /dev/null
+++ b/compressor/templates/compressor/js_inline.html
@@ -0,0 +1 @@
+<script type="text/javascript">{{ content }}</script>
\ No newline at end of file
diff --git a/compressor/templatetags/compress.py b/compressor/templatetags/compress.py
index ae45bdd..ee6526a 100644
--- a/compressor/templatetags/compress.py
+++ b/compressor/templatetags/compress.py
@@ -5,12 +5,17 @@ from django.core.cache import cache
 from compressor import CssCompressor, JsCompressor
 from compressor.conf import settings
 
+
+OUTPUT_FILE = 'file'
+OUTPUT_INLINE = 'inline'
+
 register = template.Library()
 
 class CompressorNode(template.Node):
-    def __init__(self, nodelist, kind=None):
+    def __init__(self, nodelist, kind=None, mode=OUTPUT_FILE):
         self.nodelist = nodelist
         self.kind = kind
+        self.mode = mode
 
     def cache_get(self, key):
         packed_val = cache.get(key)
@@ -41,7 +46,10 @@ class CompressorNode(template.Node):
         output = self.cache_get(compressor.cachekey)
         if output is None:
             try:
-                output = compressor.output()
+                if self.mode == OUTPUT_FILE:
+                    output = compressor.output()
+                else:
+                    output = compressor.output_inline()
                 self.cache_set(compressor.cachekey, output)
             except:
                 from traceback import format_exc
@@ -92,11 +100,18 @@ def compress(parser, token):
 
     args = token.split_contents()
 
-    if not len(args) == 2:
-        raise template.TemplateSyntaxError("%r tag requires either 1, 3 or 5 arguments." % args[0])
+    if not len(args) in (2, 3):
+        raise template.TemplateSyntaxError("%r tag requires either one or two arguments." % args[0])
 
     kind = args[1]
     if not kind in ['css', 'js']:
         raise template.TemplateSyntaxError("%r's argument must be 'js' or 'css'." % args[0])
 
-    return CompressorNode(nodelist, kind)
+    if len(args) == 3:
+        mode = args[2]
+        if not mode in (OUTPUT_FILE, OUTPUT_INLINE):
+            raise template.TemplateSyntaxError("%r's second argument must be '%s' or '%s'." % (args[0], OUTPUT_FILE, OUTPUT_INLINE))
+    else:
+        mode = OUTPUT_FILE
+
+    return CompressorNode(nodelist, kind, mode)