diff --git a/include/sway/config.h b/include/sway/config.h
index 9bfda259..777fb5a8 100644
--- a/include/sway/config.h
+++ b/include/sway/config.h
@@ -102,8 +102,11 @@ struct output_config {
 	char *name;
 	int enabled;
 	int width, height;
+	float refresh_rate;
 	int x, y;
 	int scale;
+	int32_t transform;
+
 	char *background;
 	char *background_option;
 };
@@ -391,9 +394,8 @@ struct seat_attachment_config *seat_config_get_attachment(
 		struct seat_config *seat_config, char *identifier);
 
 int output_name_cmp(const void *item, const void *data);
+struct output_config *new_output_config();
 void merge_output_config(struct output_config *dst, struct output_config *src);
-/** Sets up a WLC output handle based on a given output_config.
- */
 void apply_output_config(struct output_config *oc, swayc_t *output);
 void free_output_config(struct output_config *oc);
 
diff --git a/include/sway/container.h b/include/sway/container.h
index f13745ee..9a5e312b 100644
--- a/include/sway/container.h
+++ b/include/sway/container.h
@@ -58,9 +58,9 @@ enum swayc_border_types {
 	B_NORMAL, /**< Normal border with title bar */
 };
 
+struct sway_root;
 struct sway_output;
 struct sway_view;
-struct wlr_output_layout;
 
 /**
  * Stores information about a container.
@@ -70,7 +70,7 @@ struct wlr_output_layout;
 struct sway_container {
 	union {
 		// TODO: Encapsulate state for other node types as well like C_CONTAINER
-		struct wlr_output_layout *output_layout; // C_ROOT
+		struct sway_root *sway_root;             // C_ROOT
 		struct sway_output *sway_output;         // C_OUTPUT
 		struct sway_view *sway_view;             // C_VIEW
 	};
@@ -137,6 +137,7 @@ swayc_t *new_output(struct sway_output *sway_output);
 swayc_t *new_workspace(swayc_t *output, const char *name);
 swayc_t *new_view(swayc_t *sibling, struct sway_view *sway_view);
 
+swayc_t *destroy_output(swayc_t *output);
 swayc_t *destroy_view(swayc_t *view);
 
 swayc_t *swayc_parent_by_type(swayc_t *container, enum swayc_types type);
diff --git a/include/sway/layout.h b/include/sway/layout.h
index f3b62b05..bfd96a02 100644
--- a/include/sway/layout.h
+++ b/include/sway/layout.h
@@ -1,8 +1,16 @@
 #ifndef _SWAY_LAYOUT_H
 #define _SWAY_LAYOUT_H
 
+#include <wlr/types/wlr_output_layout.h>
+
 struct sway_container;
 
+struct sway_root {
+	struct wlr_output_layout *output_layout;
+
+	struct wl_listener output_layout_change;
+};
+
 void init_layout(void);
 void add_child(struct sway_container *parent, struct sway_container *child);
 struct sway_container *remove_child(struct sway_container *child);
diff --git a/include/sway/output.h b/include/sway/output.h
index 895cb07d..7ca02d7b 100644
--- a/include/sway/output.h
+++ b/include/sway/output.h
@@ -12,8 +12,8 @@ struct sway_output {
 	struct sway_container *swayc;
 	struct sway_server *server;
 	struct timespec last_frame;
+
 	struct wl_listener frame;
-	struct wl_listener resolution;
 };
 
 #endif
diff --git a/sway/commands.c b/sway/commands.c
index b8948fb7..7485f2f6 100644
--- a/sway/commands.c
+++ b/sway/commands.c
@@ -132,6 +132,7 @@ static struct cmd_handler handlers[] = {
 	{ "exit", cmd_exit },
 	{ "include", cmd_include },
 	{ "input", cmd_input },
+	{ "output", cmd_output },
 	{ "seat", cmd_seat },
 };
 
diff --git a/sway/commands/output.c b/sway/commands/output.c
new file mode 100644
index 00000000..d71e4d8d
--- /dev/null
+++ b/sway/commands/output.c
@@ -0,0 +1,311 @@
+#define _XOPEN_SOURCE 500
+#include <ctype.h>
+#include <libgen.h>
+#include <stdlib.h>
+#include <string.h>
+#include <strings.h>
+#include <unistd.h>
+#include <wordexp.h>
+#include "sway/commands.h"
+#include "sway/config.h"
+#include "list.h"
+#include "log.h"
+#include "stringop.h"
+
+static char *bg_options[] = {
+	"stretch",
+	"center",
+	"fill",
+	"fit",
+	"tile",
+};
+
+struct cmd_results *cmd_output(int argc, char **argv) {
+	struct cmd_results *error = NULL;
+	if ((error = checkarg(argc, "output", EXPECTED_AT_LEAST, 1))) {
+		return error;
+	}
+	const char *name = argv[0];
+
+	struct output_config *output = new_output_config();
+	if (!output) {
+		sway_log(L_ERROR, "Failed to allocate output config");
+		return NULL;
+	}
+	output->name = strdup(name);
+
+	int i;
+	for (i = 1; i < argc; ++i) {
+		const char *command = argv[i];
+
+		if (strcasecmp(command, "disable") == 0) {
+			output->enabled = 0;
+		} else if (strcasecmp(command, "mode") == 0 ||
+				strcasecmp(command, "resolution") == 0 ||
+				strcasecmp(command, "res") == 0) {
+			if (++i >= argc) {
+				error = cmd_results_new(CMD_INVALID, "output",
+					"Missing mode argument.");
+				goto fail;
+			}
+
+			int width = -1, height = -1;
+			float refresh_rate = -1;
+
+			char *end;
+			width = strtol(argv[i], &end, 10);
+			if (*end) {
+				// Format is 1234x4321
+				if (*end != 'x') {
+					error = cmd_results_new(CMD_INVALID, "output",
+						"Invalid mode width.");
+					goto fail;
+				}
+				++end;
+				height = strtol(end, &end, 10);
+				if (*end) {
+					if (*end != '@') {
+						error = cmd_results_new(CMD_INVALID, "output",
+							"Invalid mode height.");
+						goto fail;
+					}
+					++end;
+					refresh_rate = strtof(end, &end);
+					if (strcasecmp("Hz", end) != 0) {
+						error = cmd_results_new(CMD_INVALID, "output",
+							"Invalid mode refresh rate.");
+						goto fail;
+					}
+				}
+			} else {
+				// Format is 1234 4321
+				if (++i >= argc) {
+					error = cmd_results_new(CMD_INVALID, "output",
+						"Missing mode argument (height).");
+					goto fail;
+				}
+				height = strtol(argv[i], &end, 10);
+				if (*end) {
+					error = cmd_results_new(CMD_INVALID, "output",
+						"Invalid mode height.");
+					goto fail;
+				}
+			}
+			output->width = width;
+			output->height = height;
+			output->refresh_rate = refresh_rate;
+		} else if (strcasecmp(command, "position") == 0 ||
+				strcasecmp(command, "pos") == 0) {
+			if (++i >= argc) {
+				error = cmd_results_new(CMD_INVALID, "output",
+					"Missing position argument.");
+				goto fail;
+			}
+
+			int x = -1, y = -1;
+
+			char *end;
+			x = strtol(argv[i], &end, 10);
+			if (*end) {
+				// Format is 1234,4321
+				if (*end != ',') {
+					error = cmd_results_new(CMD_INVALID, "output",
+						"Invalid position x.");
+					goto fail;
+				}
+				++end;
+				y = strtol(end, &end, 10);
+				if (*end) {
+					error = cmd_results_new(CMD_INVALID, "output",
+						"Invalid position y.");
+					goto fail;
+				}
+			} else {
+				// Format is 1234 4321 (legacy)
+				if (++i >= argc) {
+					error = cmd_results_new(CMD_INVALID, "output",
+						"Missing position argument (y).");
+					goto fail;
+				}
+				y = strtol(argv[i], &end, 10);
+				if (*end) {
+					error = cmd_results_new(CMD_INVALID, "output",
+						"Invalid position y.");
+					goto fail;
+				}
+			}
+
+			output->x = x;
+			output->y = y;
+		} else if (strcasecmp(command, "scale") == 0) {
+			if (++i >= argc) {
+				error = cmd_results_new(CMD_INVALID, "output",
+					"Missing scale parameter.");
+				goto fail;
+			}
+			char *end;
+			output->scale = strtol(argv[i], &end, 10);
+			if (*end) {
+				error = cmd_results_new(CMD_INVALID, "output",
+					"Invalid scale.");
+				goto fail;
+			}
+		} else if (strcasecmp(command, "transform") == 0) {
+			if (++i >= argc) {
+				error = cmd_results_new(CMD_INVALID, "output",
+					"Missing transform parameter.");
+				goto fail;
+			}
+			char *value = argv[i];
+			if (strcmp(value, "normal") == 0) {
+				output->transform = WL_OUTPUT_TRANSFORM_NORMAL;
+			} else if (strcmp(value, "90") == 0) {
+				output->transform = WL_OUTPUT_TRANSFORM_90;
+			} else if (strcmp(value, "180") == 0) {
+				output->transform = WL_OUTPUT_TRANSFORM_180;
+			} else if (strcmp(value, "270") == 0) {
+				output->transform = WL_OUTPUT_TRANSFORM_270;
+			} else if (strcmp(value, "flipped") == 0) {
+				output->transform = WL_OUTPUT_TRANSFORM_FLIPPED;
+			} else if (strcmp(value, "flipped-90") == 0) {
+				output->transform = WL_OUTPUT_TRANSFORM_FLIPPED_90;
+			} else if (strcmp(value, "flipped-180") == 0) {
+				output->transform = WL_OUTPUT_TRANSFORM_FLIPPED_180;
+			} else if (strcmp(value, "flipped-270") == 0) {
+				output->transform = WL_OUTPUT_TRANSFORM_FLIPPED_270;
+			} else {
+				error = cmd_results_new(CMD_INVALID, "output",
+					"Invalid output transform.");
+				goto fail;
+			}
+		} else if (strcasecmp(command, "background") == 0 ||
+				strcasecmp(command, "bg") == 0) {
+			wordexp_t p;
+			if (++i >= argc) {
+				error = cmd_results_new(CMD_INVALID, "output",
+					"Missing background file or color specification.");
+				goto fail;
+			}
+			if (i + 1 >= argc) {
+				error = cmd_results_new(CMD_INVALID, "output",
+					"Missing background scaling mode or `solid_color`.");
+				goto fail;
+			}
+			if (strcasecmp(argv[i + 1], "solid_color") == 0) {
+				output->background = strdup(argv[argc - 2]);
+				output->background_option = strdup("solid_color");
+			} else {
+				// argv[i+j]=bg_option
+				bool valid = false;
+				char *mode;
+				size_t j;
+				for (j = 0; j < (size_t) (argc - i); ++j) {
+					mode = argv[i + j];
+					size_t n = sizeof(bg_options) / sizeof(char *);
+					for (size_t k = 0; k < n; ++k) {
+						if (strcasecmp(mode, bg_options[k]) == 0) {
+							valid = true;
+							break;
+						}
+					}
+					if (valid) {
+						break;
+					}
+				}
+				if (!valid) {
+					error = cmd_results_new(CMD_INVALID, "output",
+						"Missing background scaling mode.");
+					goto fail;
+				}
+
+				char *src = join_args(argv + i, j);
+				if (wordexp(src, &p, 0) != 0 || p.we_wordv[0] == NULL) {
+					error = cmd_results_new(CMD_INVALID, "output",
+						"Invalid syntax (%s).", src);
+					goto fail;
+				}
+				free(src);
+				src = p.we_wordv[0];
+				if (config->reading && *src != '/') {
+					char *conf = strdup(config->current_config);
+					if (conf) {
+						char *conf_path = dirname(conf);
+						src = malloc(strlen(conf_path) + strlen(src) + 2);
+						if (src) {
+							sprintf(src, "%s/%s", conf_path, p.we_wordv[0]);
+						} else {
+							sway_log(L_ERROR,
+								"Unable to allocate background source");
+						}
+						free(conf);
+					} else {
+						sway_log(L_ERROR,
+							"Unable to allocate background source");
+					}
+				}
+				if (!src || access(src, F_OK) == -1) {
+					error = cmd_results_new(CMD_INVALID, "output",
+						"Background file unreadable (%s).", src);
+					wordfree(&p);
+					goto fail;
+				}
+
+				output->background = strdup(src);
+				output->background_option = strdup(mode);
+				if (src != p.we_wordv[0]) {
+					free(src);
+				}
+				wordfree(&p);
+
+				i += j;
+			}
+		} else {
+			error = cmd_results_new(CMD_INVALID, "output",
+				"Invalid output subcommand: %s.", command);
+			goto fail;
+		}
+	}
+
+	i = list_seq_find(config->output_configs, output_name_cmp, name);
+	if (i >= 0) {
+		// merge existing config
+		struct output_config *oc = config->output_configs->items[i];
+		merge_output_config(oc, output);
+		free_output_config(output);
+		output = oc;
+	} else {
+		list_add(config->output_configs, output);
+	}
+
+	sway_log(L_DEBUG, "Config stored for output %s (enabled: %d) (%dx%d@%fHz "
+		"position %d,%d scale %d transform %d) (bg %s %s)",
+		output->name, output->enabled, output->width, output->height,
+		output->refresh_rate, output->x, output->y, output->scale,
+		output->transform, output->background, output->background_option);
+
+	if (output->name) {
+		// Try to find the output container and apply configuration now. If
+		// this is during startup then there will be no container and config
+		// will be applied during normal "new output" event from wlroots.
+		swayc_t *cont = NULL;
+		for (int i = 0; i < root_container.children->length; ++i) {
+			cont = root_container.children->items[i];
+			if (cont->name && ((strcmp(cont->name, output->name) == 0) ||
+					(strcmp(output->name, "*") == 0))) {
+				apply_output_config(output, cont);
+
+				if (strcmp(output->name, "*") != 0) {
+					// Stop looking if the output config isn't applicable to all
+					// outputs
+					break;
+				}
+			}
+		}
+	}
+
+	return cmd_results_new(CMD_SUCCESS, NULL, NULL);
+
+fail:
+	free_output_config(output);
+	return error;
+}
diff --git a/sway/config/output.c b/sway/config/output.c
new file mode 100644
index 00000000..dc9ee37c
--- /dev/null
+++ b/sway/config/output.c
@@ -0,0 +1,185 @@
+#define _XOPEN_SOURCE 700
+#include <string.h>
+#include <assert.h>
+#include <wlr/types/wlr_output.h>
+#include <wlr/types/wlr_output_layout.h>
+#include "sway/config.h"
+#include "sway/output.h"
+#include "log.h"
+
+int output_name_cmp(const void *item, const void *data) {
+	const struct output_config *output = item;
+	const char *name = data;
+
+	return strcmp(output->name, name);
+}
+
+struct output_config *new_output_config() {
+	struct output_config *oc = calloc(1, sizeof(struct output_config));
+	if (oc == NULL) {
+		return NULL;
+	}
+	oc->enabled = -1;
+	oc->width = oc->height = -1;
+	oc->refresh_rate = -1;
+	oc->x = oc->y = -1;
+	oc->scale = -1;
+	oc->transform = -1;
+	return oc;
+}
+
+void merge_output_config(struct output_config *dst, struct output_config *src) {
+	if (src->name) {
+		free(dst->name);
+		dst->name = strdup(src->name);
+	}
+	if (src->enabled != -1) {
+		dst->enabled = src->enabled;
+	}
+	if (src->width != -1) {
+		dst->width = src->width;
+	}
+	if (src->height != -1) {
+		dst->height = src->height;
+	}
+	if (src->x != -1) {
+		dst->x = src->x;
+	}
+	if (src->y != -1) {
+		dst->y = src->y;
+	}
+	if (src->scale != -1) {
+		dst->scale = src->scale;
+	}
+	if (src->refresh_rate != -1) {
+		dst->refresh_rate = src->refresh_rate;
+	}
+	if (src->transform != -1) {
+		dst->transform = src->transform;
+	}
+	if (src->background) {
+		free(dst->background);
+		dst->background = strdup(src->background);
+	}
+	if (src->background_option) {
+		free(dst->background_option);
+		dst->background_option = strdup(src->background_option);
+	}
+}
+
+static void set_mode(struct wlr_output *output, int width, int height,
+		float refresh_rate) {
+	int mhz = (int)(refresh_rate * 1000);
+	if (wl_list_empty(&output->modes)) {
+		sway_log(L_DEBUG, "Assigning custom mode to %s", output->name);
+		wlr_output_set_custom_mode(output, width, height, mhz);
+		return;
+	}
+
+	struct wlr_output_mode *mode, *best = NULL;
+	wl_list_for_each(mode, &output->modes, link) {
+		if (mode->width == width && mode->height == height) {
+			if (mode->refresh == mhz) {
+				best = mode;
+				break;
+			}
+			best = mode;
+		}
+	}
+	if (!best) {
+		sway_log(L_ERROR, "Configured mode for %s not available", output->name);
+	} else {
+		sway_log(L_DEBUG, "Assigning configured mode to %s", output->name);
+		wlr_output_set_mode(output, best);
+	}
+}
+
+void apply_output_config(struct output_config *oc, swayc_t *output) {
+	assert(output->type == C_OUTPUT);
+
+	struct wlr_output *wlr_output = output->sway_output->wlr_output;
+	if (oc && oc->enabled == 0) {
+		wlr_output_layout_remove(root_container.sway_root->output_layout,
+			wlr_output);
+		destroy_output(output);
+		return;
+	}
+
+	if (oc && oc->width > 0 && oc->height > 0) {
+		sway_log(L_DEBUG, "Set %s mode to %dx%d (%f GHz)", oc->name, oc->width,
+			oc->height, oc->refresh_rate);
+		set_mode(wlr_output, oc->width, oc->height, oc->refresh_rate);
+	}
+	if (oc && oc->scale > 0) {
+		sway_log(L_DEBUG, "Set %s scale to %d", oc->name, oc->scale);
+		wlr_output_set_scale(wlr_output, oc->scale);
+	}
+	if (oc && oc->transform >= 0) {
+		sway_log(L_DEBUG, "Set %s transform to %d", oc->name, oc->transform);
+		wlr_output_set_transform(wlr_output, oc->transform);
+	}
+
+	// Find position for it
+	if (oc && (oc->x != -1 || oc->y != -1)) {
+		sway_log(L_DEBUG, "Set %s position to %d, %d", oc->name, oc->x, oc->y);
+		wlr_output_layout_add(root_container.sway_root->output_layout,
+			wlr_output, oc->x, oc->y);
+	} else {
+		wlr_output_layout_add_auto(root_container.sway_root->output_layout,
+			wlr_output);
+	}
+
+	if (!oc || !oc->background) {
+		// Look for a * config for background
+		int i = list_seq_find(config->output_configs, output_name_cmp, "*");
+		if (i >= 0) {
+			oc = config->output_configs->items[i];
+		} else {
+			oc = NULL;
+		}
+	}
+
+	int output_i;
+	for (output_i = 0; output_i < root_container.children->length; ++output_i) {
+		if (root_container.children->items[output_i] == output) {
+			break;
+		}
+	}
+
+	if (oc && oc->background) {
+		// TODO swaybg
+		/*if (output->bg_pid != 0) {
+			terminate_swaybg(output->bg_pid);
+		}
+
+		sway_log(L_DEBUG, "Setting background for output %d to %s", output_i, oc->background);
+
+		size_t bufsize = 12;
+		char output_id[bufsize];
+		snprintf(output_id, bufsize, "%d", output_i);
+		output_id[bufsize-1] = 0;
+
+		char *const cmd[] = {
+			"swaybg",
+			output_id,
+			oc->background,
+			oc->background_option,
+			NULL,
+		};
+
+		output->bg_pid = fork();
+		if (output->bg_pid == 0) {
+			execvp(cmd[0], cmd);
+		}*/
+	}
+}
+
+void free_output_config(struct output_config *oc) {
+	if (!oc) {
+		return;
+	}
+	free(oc->name);
+	free(oc->background);
+	free(oc->background_option);
+	free(oc);
+}
diff --git a/sway/desktop/output.c b/sway/desktop/output.c
index af067326..3b87c2e7 100644
--- a/sway/desktop/output.c
+++ b/sway/desktop/output.c
@@ -88,8 +88,7 @@ static void output_frame_view(swayc_t *view, void *data) {
 }
 
 static void output_frame_notify(struct wl_listener *listener, void *data) {
-	struct sway_output *soutput = wl_container_of(
-			listener, soutput, frame);
+	struct sway_output *soutput = wl_container_of(listener, soutput, frame);
 	struct wlr_output *wlr_output = data;
 	struct sway_server *server = soutput->server;
 
@@ -108,42 +107,53 @@ static void output_frame_notify(struct wl_listener *listener, void *data) {
 	soutput->last_frame = now;
 }
 
-static void output_resolution_notify(struct wl_listener *listener, void *data) {
-	struct sway_output *soutput = wl_container_of(
-			listener, soutput, resolution);
-	arrange_windows(soutput->swayc, -1, -1);
-}
-
 void output_add_notify(struct wl_listener *listener, void *data) {
 	struct sway_server *server = wl_container_of(listener, server, output_add);
 	struct wlr_output *wlr_output = data;
 	sway_log(L_DEBUG, "New output %p: %s", wlr_output, wlr_output->name);
 
 	struct sway_output *output = calloc(1, sizeof(struct sway_output));
+	if (!output) {
+		return;
+	}
 	output->wlr_output = wlr_output;
 	output->server = server;
-	output->swayc = new_output(output);
 
-	if (wl_list_length(&wlr_output->modes) > 0) {
-		struct wlr_output_mode *mode = NULL;
-		mode = wl_container_of((&wlr_output->modes)->prev, mode, link);
+	if (!wl_list_empty(&wlr_output->modes)) {
+		struct wlr_output_mode *mode =
+			wl_container_of(wlr_output->modes.prev, mode, link);
 		wlr_output_set_mode(wlr_output, mode);
 	}
 
-	output->frame.notify = output_frame_notify;
-	wl_signal_add(&wlr_output->events.frame, &output->frame);
-
-	output->resolution.notify = output_resolution_notify;
-	wl_signal_add(&wlr_output->events.resolution, &output->resolution);
+	output->swayc = new_output(output);
+	if (!output->swayc) {
+		free(output);
+		return;
+	}
 
 	sway_input_manager_configure_xcursor(input_manager);
 
-	arrange_windows(output->swayc, -1, -1);
+	output->frame.notify = output_frame_notify;
+	wl_signal_add(&wlr_output->events.frame, &output->frame);
 }
 
 void output_remove_notify(struct wl_listener *listener, void *data) {
 	struct sway_server *server = wl_container_of(listener, server, output_remove);
 	struct wlr_output *wlr_output = data;
 	sway_log(L_DEBUG, "Output %p %s removed", wlr_output, wlr_output->name);
-	// TODO
+
+	swayc_t *output_container = NULL;
+	for (int i = 0 ; i < root_container.children->length; ++i) {
+		swayc_t *child = root_container.children->items[i];
+		if (child->type == C_OUTPUT &&
+				child->sway_output->wlr_output == wlr_output) {
+			output_container = child;
+			break;
+		}
+	}
+	if (!output_container) {
+		return;
+	}
+
+	destroy_output(output_container);
 }
diff --git a/sway/desktop/xwayland.c b/sway/desktop/xwayland.c
index a7e84aa1..29bed955 100644
--- a/sway/desktop/xwayland.c
+++ b/sway/desktop/xwayland.c
@@ -57,7 +57,7 @@ static void set_position(struct sway_view *view, double ox, double oy) {
 	if (!sway_assert(root, "output must be within tree to set position")) {
 		return;
 	}
-	struct wlr_output_layout *layout = root->output_layout;
+	struct wlr_output_layout *layout = root->sway_root->output_layout;
 	struct wlr_output_layout_output *loutput =
 		wlr_output_layout_get(layout, output->sway_output->wlr_output);
 	if (!sway_assert(loutput, "output must be within layout to set position")) {
@@ -149,14 +149,14 @@ void handle_xwayland_surface(struct wl_listener *listener, void *data) {
 	// TODO remove from the tree when the surface goes away (unmapped)
 	sway_view->surface = xsurface->surface;
 	sway_surface->view = sway_view;
-	
+
 	// TODO:
 	// - Wire up listeners
 	// - Handle popups
 	// - Look up pid and open on appropriate workspace
 	// - Set new view to maximized so it behaves nicely
 	// - Criteria
-	
+
 	sway_surface->commit.notify = handle_commit;
 	wl_signal_add(&xsurface->surface->events.commit, &sway_surface->commit);
 	sway_surface->destroy.notify = handle_destroy;
diff --git a/sway/input/cursor.c b/sway/input/cursor.c
index 3aa2d1bc..24d4642d 100644
--- a/sway/input/cursor.c
+++ b/sway/input/cursor.c
@@ -140,7 +140,8 @@ struct sway_cursor *sway_cursor_create(struct sway_seat *seat) {
 	}
 
 	cursor->seat = seat;
-	wlr_cursor_attach_output_layout(wlr_cursor, root_container.output_layout);
+	wlr_cursor_attach_output_layout(wlr_cursor,
+		root_container.sway_root->output_layout);
 
 	// input events
 	wl_signal_add(&wlr_cursor->events.motion, &cursor->motion);
diff --git a/sway/main.c b/sway/main.c
index 25032aa0..bd69395a 100644
--- a/sway/main.c
+++ b/sway/main.c
@@ -406,6 +406,10 @@ int main(int argc, char **argv) {
 
 	security_sanity_check();
 
+	// TODO: wait for server to be ready
+	// TODO: consume config->cmd_queue
+	config->active = true;
+
 	if (!terminate_request) {
 		server_run(&server);
 	}
diff --git a/sway/meson.build b/sway/meson.build
index c81e1c2c..c1f75b13 100644
--- a/sway/meson.build
+++ b/sway/meson.build
@@ -29,7 +29,9 @@ sway_sources = files(
 	'commands/input/xkb_options.c',
 	'commands/input/xkb_rules.c',
 	'commands/input/xkb_variant.c',
+	'commands/output.c',
 	'config.c',
+	'config/output.c',
 	'ipc-json.c',
 	'ipc-server.c',
 	'desktop/output.c',
diff --git a/sway/tree/container.c b/sway/tree/container.c
index 78c8625f..6f2a3abf 100644
--- a/sway/tree/container.c
+++ b/sway/tree/container.c
@@ -2,11 +2,14 @@
 #include <stdint.h>
 #include <stdlib.h>
 #include <string.h>
+#include <strings.h>
 #include <wlr/types/wlr_output_layout.h>
 #include <wlr/types/wlr_wl_shell.h>
+#include "sway/config.h"
 #include "sway/container.h"
 #include "sway/layout.h"
 #include "sway/output.h"
+#include "sway/server.h"
 #include "sway/view.h"
 #include "sway/workspace.h"
 #include "log.h"
@@ -48,19 +51,38 @@ static swayc_t *new_swayc(enum swayc_types type) {
 
 swayc_t *new_output(struct sway_output *sway_output) {
 	struct wlr_box size;
-	wlr_output_effective_resolution(
-			sway_output->wlr_output, &size.width, &size.height);
+	wlr_output_effective_resolution(sway_output->wlr_output, &size.width,
+		&size.height);
 	const char *name = sway_output->wlr_output->name;
 
+	struct output_config *oc = NULL, *all = NULL;
+	for (int i = 0; i < config->output_configs->length; ++i) {
+		struct output_config *cur = config->output_configs->items[i];
+		if (strcasecmp(name, cur->name) == 0) {
+			sway_log(L_DEBUG, "Matched output config for %s", name);
+			oc = cur;
+		}
+		if (strcasecmp("*", cur->name) == 0) {
+			sway_log(L_DEBUG, "Matched wildcard output config for %s", name);
+			all = cur;
+		}
+
+		if (oc && all) {
+			break;
+		}
+	}
+	if (!oc) {
+		oc = all;
+	}
+	if (oc && !oc->enabled) {
+		return NULL;
+	}
+
 	swayc_t *output = new_swayc(C_OUTPUT);
 	output->sway_output = sway_output;
 	output->name = name ? strdup(name) : NULL;
-	output->width = size.width;
-	output->height = size.width;
 
-	// TODO configure output layout position
-	wlr_output_layout_add_auto(root_container.output_layout,
-		sway_output->wlr_output);
+	apply_output_config(oc, output);
 
 	add_child(&root_container, output);
 
@@ -146,6 +168,34 @@ static void free_swayc(swayc_t *cont) {
 	free(cont);
 }
 
+swayc_t *destroy_output(swayc_t *output) {
+	if (!sway_assert(output, "null output passed to destroy_output")) {
+		return NULL;
+	}
+
+	if (output->children->length > 0) {
+		// TODO save workspaces when there are no outputs.
+		// TODO also check if there will ever be no outputs except for exiting
+		// program
+		if (root_container.children->length > 1) {
+			int p = root_container.children->items[0] == output;
+			// Move workspace from this output to another output
+			while (output->children->length) {
+				swayc_t *child = output->children->items[0];
+				remove_child(child);
+				add_child(root_container.children->items[p], child);
+			}
+			sort_workspaces(root_container.children->items[p]);
+			arrange_windows(root_container.children->items[p], -1, -1);
+		}
+	}
+
+	sway_log(L_DEBUG, "OUTPUT: Destroying output '%s'", output->name);
+	free_swayc(output);
+
+	return &root_container;
+}
+
 swayc_t *destroy_view(swayc_t *view) {
 	if (!sway_assert(view, "null view passed to destroy_view")) {
 		return NULL;
@@ -189,7 +239,8 @@ swayc_t *swayc_at(swayc_t *parent, double lx, double ly,
 			struct sway_view *sview = swayc->sway_view;
 			swayc_t *soutput = swayc_parent_by_type(swayc, C_OUTPUT);
 			struct wlr_box *output_box =
-				wlr_output_layout_get_box(root_container.output_layout,
+				wlr_output_layout_get_box(
+					root_container.sway_root->output_layout,
 					soutput->sway_output->wlr_output);
 			double ox = lx - output_box->x;
 			double oy = ly - output_box->y;
diff --git a/sway/tree/layout.c b/sway/tree/layout.c
index cb39a361..4bcf0e2f 100644
--- a/sway/tree/layout.c
+++ b/sway/tree/layout.c
@@ -7,6 +7,7 @@
 #include <wlr/types/wlr_output.h>
 #include <wlr/types/wlr_output_layout.h>
 #include "sway/container.h"
+#include "sway/layout.h"
 #include "sway/output.h"
 #include "sway/view.h"
 #include "list.h"
@@ -14,13 +15,47 @@
 
 swayc_t root_container;
 
+static void output_layout_change_notify(struct wl_listener *listener, void *data) {
+	struct wlr_box *layout_box = wlr_output_layout_get_box(
+		root_container.sway_root->output_layout, NULL);
+	root_container.width = layout_box->width;
+	root_container.height = layout_box->height;
+
+	for (int i = 0 ; i < root_container.children->length; ++i) {
+		swayc_t *output_container = root_container.children->items[i];
+		if (output_container->type != C_OUTPUT) {
+			continue;
+		}
+		struct sway_output *output = output_container->sway_output;
+
+		struct wlr_box *output_box = wlr_output_layout_get_box(
+			root_container.sway_root->output_layout, output->wlr_output);
+		if (!output_box) {
+			continue;
+		}
+		output_container->x = output_box->x;
+		output_container->y = output_box->y;
+		output_container->width = output_box->width;
+		output_container->height = output_box->height;
+	}
+
+	arrange_windows(&root_container, -1, -1);
+}
+
 void init_layout(void) {
 	root_container.id = 0; // normally assigned in new_swayc()
 	root_container.type = C_ROOT;
 	root_container.layout = L_NONE;
 	root_container.name = strdup("root");
 	root_container.children = create_list();
-	root_container.output_layout = wlr_output_layout_create();
+
+	root_container.sway_root = calloc(1, sizeof(*root_container.sway_root));
+	root_container.sway_root->output_layout = wlr_output_layout_create();
+
+	root_container.sway_root->output_layout_change.notify =
+		output_layout_change_notify;
+	wl_signal_add(&root_container.sway_root->output_layout->events.change,
+		&root_container.sway_root->output_layout_change);
 }
 
 void add_child(swayc_t *parent, swayc_t *child) {