diff --git a/bin/lessc b/bin/lessc
index 04cc1a68..fb3ccf9b 100755
--- a/bin/lessc
+++ b/bin/lessc
@@ -19,6 +19,7 @@ var options = {
     strictImports: false,
     rootpath: '',
     relativeUrls: false,
+    ieCompat: true,
     strictMaths: true
 };
 var continueProcessing = true,
@@ -72,6 +73,9 @@ args = args.filter(function (arg) {
         case 'no-color':
             options.color = false;
             break;
+        case 'no-ie-compat':
+            options.ieCompat = false;
+            break;
         case 'include-path':
             if (!match[2]) {
                 sys.puts("include-path option requires a parameter");
diff --git a/lib/less/env.js b/lib/less/env.js
index 0ad1a849..f107dad8 100644
--- a/lib/less/env.js
+++ b/lib/less/env.js
@@ -11,6 +11,7 @@
         'strictImports',    // option -
         'dumpLineNumbers',  // option - whether to dump line numbers
         'compress',         // option - whether to compress
+        'ieCompat',         // option - whether to enforce IE compatibility (IE8 data-uri)
         'mime',             // browser only - mime type for sheet import
         'entryPath',        // browser only - path of entry less file
         'rootFilename',     // browser only - href of the entry less file
diff --git a/lib/less/functions.js b/lib/less/functions.js
index f412d5d1..14c859a3 100644
--- a/lib/less/functions.js
+++ b/lib/less/functions.js
@@ -416,6 +416,24 @@ tree.functions = {
 
         var buf = fs.readFileSync(filePath);
 
+        // IE8 cannot handle a data-uri larger than 32KB. If this is exceeded
+        // and the --ieCompat flag is enabled, return a normal url() instead.
+        var DATA_URI_MAX_KB = 32,
+            fileSizeInKB = parseInt((buf.length / 1024), 10);
+        if (fileSizeInKB >= DATA_URI_MAX_KB) {
+            // the url() must be relative, not an absolute file path
+            filePath = path.relative(this.currentDirectory, filePath);
+
+            if (this.env.ieCompat !== false) {
+                // TODO: respect verbose or silent flags here
+                console.error("Skipped data-uri embedding of %s because its size (%dKB) exceeds IE8-safe %dKB!", filePath, fileSizeInKB, DATA_URI_MAX_KB);
+                return new(tree.URL)(new(tree.Anonymous)(filePath));
+            } else {
+                // if explicitly disabled (via --no-ie-compat on CLI, or env.ieCompat === false), merely warn
+                console.warn("WARNING: Embedding %s (%dKB) exceeds IE8's data-uri size limit of %dKB!", filePath, fileSizeInKB, DATA_URI_MAX_KB);
+            }
+        }
+
         buf = useBase64 ? buf.toString('base64')
                         : encodeURIComponent(buf);
 
diff --git a/lib/less/lessc_helper.js b/lib/less/lessc_helper.js
index 3bd38d86..fe884bbd 100644
--- a/lib/less/lessc_helper.js
+++ b/lib/less/lessc_helper.js
@@ -31,6 +31,7 @@ var lessc_helper = {
         sys.puts("  -h, --help              Print help (this message) and exit.");
         sys.puts("  --include-path          Set include paths. Separated by `:'. Use `;' on Windows.");
         sys.puts("  --no-color              Disable colorized output.");
+        sys.puts("  --no-ie-compat          Disable IE compatibility checks.");
         sys.puts("  -l, --lint              Syntax check only (lint).");
         sys.puts("  -s, --silent            Suppress output of error messages.");
         sys.puts("  --strict-imports        Force evaluation of imports.");
diff --git a/test/browser/css/urls.css b/test/browser/css/urls.css
index 39c22b1a..19ba27e6 100644
--- a/test/browser/css/urls.css
+++ b/test/browser/css/urls.css
@@ -44,3 +44,6 @@
   uri-1: url('http://localhost:8081/browser/less/../../data/page.html');
   uri-2: url('http://localhost:8081/browser/less/../../data/page.html');
 }
+#data-uri-toobig {
+  uri: url('http://localhost:8081/browser/less/../../data/data-uri-fail.png');
+}
diff --git a/test/browser/less/urls.less b/test/browser/less/urls.less
index d4a4d8d1..1f39a921 100644
--- a/test/browser/less/urls.less
+++ b/test/browser/less/urls.less
@@ -43,3 +43,7 @@
   uri-1: data-uri('text/html', '../../data/page.html');
   uri-2: data-uri('../../data/page.html');
 }
+
+#data-uri-toobig {
+  uri: data-uri('../../data/data-uri-fail.png');
+}
diff --git a/test/css/urls.css b/test/css/urls.css
index 660e1361..1226e4d8 100644
--- a/test/css/urls.css
+++ b/test/css/urls.css
@@ -52,3 +52,6 @@
   uri-1: url('data:text/html,%3Ch1%3EThis%20page%20is%20100%25%20Awesome.%3C%2Fh1%3E%0A');
   uri-2: url('data:text/html,%3Ch1%3EThis%20page%20is%20100%25%20Awesome.%3C%2Fh1%3E%0A');
 }
+#data-uri-toobig {
+  uri: url(../data/data-uri-fail.png);
+}
diff --git a/test/data/data-uri-fail.png b/test/data/data-uri-fail.png
new file mode 100644
index 00000000..f91b59fb
Binary files /dev/null and b/test/data/data-uri-fail.png differ
diff --git a/test/less/urls.less b/test/less/urls.less
index d7afeeca..a047cc85 100644
--- a/test/less/urls.less
+++ b/test/less/urls.less
@@ -46,3 +46,8 @@
   uri-1: data-uri('text/html', '../data/page.html');
   uri-2: data-uri('../data/page.html');
 }
+
+// so, weirdly, the browser output is quoted, the less output is UNquoted
+#data-uri-toobig {
+  uri: data-uri('../data/data-uri-fail.png');
+}