diff --git a/yt_dlp/YoutubeDL.py b/yt_dlp/YoutubeDL.py
index 503dcb1124..9691a1ea7c 100644
--- a/yt_dlp/YoutubeDL.py
+++ b/yt_dlp/YoutubeDL.py
@@ -452,7 +452,8 @@ class YoutubeDL:
                        Can also just be a single color policy,
                        in which case it applies to all outputs.
                        Valid stream names are 'stdout' and 'stderr'.
-                       Valid color policies are one of 'always', 'auto', 'no_color' or 'never'.
+                       Valid color policies are one of 'always', 'auto',
+                       'no_color', 'never', 'auto-tty' or 'no_color-tty'.
     geo_bypass:        Bypass geographic restriction via faking X-Forwarded-For
                        HTTP header
     geo_bypass_country:
@@ -659,12 +660,15 @@ def __init__(self, params=None, auto_init=True):
             self.params['color'] = 'no_color'
 
         term_allow_color = os.getenv('TERM', '').lower() != 'dumb'
-        no_color = bool(os.getenv('NO_COLOR'))
+        base_no_color = bool(os.getenv('NO_COLOR'))
 
         def process_color_policy(stream):
             stream_name = {sys.stdout: 'stdout', sys.stderr: 'stderr'}[stream]
-            policy = traverse_obj(self.params, ('color', (stream_name, None), {str}), get_all=False)
-            if policy in ('auto', None):
+            policy = traverse_obj(self.params, ('color', (stream_name, None), {str}, any)) or 'auto'
+            if policy in ('auto', 'auto-tty', 'no_color-tty'):
+                no_color = base_no_color
+                if policy.endswith('tty'):
+                    no_color = policy.startswith('no_color')
                 if term_allow_color and supports_terminal_sequences(stream):
                     return 'no_color' if no_color else True
                 return False
diff --git a/yt_dlp/__init__.py b/yt_dlp/__init__.py
index 0e48569e33..c0b8e3b507 100644
--- a/yt_dlp/__init__.py
+++ b/yt_dlp/__init__.py
@@ -468,7 +468,7 @@ def metadataparser_actions(f):
             default_downloader = ed.get_basename()
 
     for policy in opts.color.values():
-        if policy not in ('always', 'auto', 'no_color', 'never'):
+        if policy not in ('always', 'auto', 'auto-tty', 'no_color', 'no_color-tty', 'never'):
             raise ValueError(f'"{policy}" is not a valid color policy')
 
     warnings, deprecation_warnings = [], []
diff --git a/yt_dlp/options.py b/yt_dlp/options.py
index 76db06c854..ffe2463fe2 100644
--- a/yt_dlp/options.py
+++ b/yt_dlp/options.py
@@ -462,6 +462,7 @@ def _alias_callback(option, opt_str, value, parser, opts, nargs):
             'the STREAM (stdout or stderr) to apply the setting to. '
             'Can be one of "always", "auto" (default), "never", or '
             '"no_color" (use non color terminal sequences). '
+            'Use "auto-tty" or "no_color-tty" to decide based on terminal support only. '
             'Can be used multiple times'))
     general.add_option(
         '--compat-options',