xsl:preserve-space and xsl:strip-space work on whitespace-only nodes, so if you had:
<root> <node/> </root> they would affect the two whitespace nodes (before and after <node/>) without the whitespace nodes, the above xml would look like: <root><node/></root> If you want to strip (trim) leading and following whitespace on a text node, use normalize-space() Have a look at the xsl-faq: http://www.dpawson.co.uk/xsl/sect2/sect21.html For whitespace: http://www.dpawson.co.uk/xsl/sect2/N8321.html As for the non-indented xsltc output, one of the xalan team will have to answer that one cheers andrew