How do I make xsl transformation indent the output?

For indentation you need to use a different namespace: http://xml.apache.org/xslt (see this issue)

<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
version="1.0"
xmlns:redirect="http://xml.apache.org/xalan/redirect"
extension-element-prefixes="redirect"
xmlns:xalan="http://xml.apache.org/xslt">
<xsl:output method="xml" indent="yes" xalan:indent-amount="4"/>

Was struggling with this for a while, however just got it working accidentally:

the key was to add <xsl:strip-space elements="*"/>

so it will look like this:

<xsl:stylesheet 
    version="1.0"
    xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
    xmlns:java="http://xml.apache.org/xalan/java"
    xmlns:xalan="http://xml.apache.org/xslt">
<xsl:output method="xml" encoding="ASCII" indent="yes" xalan:indent-amount="4"/>
<xsl:strip-space elements="*"/>

Not sure why, but probably removing all whitespacing helps xalan figure out the indentation

Jirka-x1, thank you for the issue-link. I used the following (as proposed by Ed Knoll 13/Aug/04):

<xsl:stylesheet ... xmlns:xslt="http://xml.apache.org/xslt">
<xsl:output ... indent="yes" xslt:indent-amount="4" />

This works for me with xalan (java) 2.7.1.