diff --git a/cli/flags/log_level.go b/cli/flags/log_level.go
new file mode 100644
index 000000000..ee4825cf7
--- /dev/null
+++ b/cli/flags/log_level.go
@@ -0,0 +1,86 @@
+package flags
+
+import (
+	"fmt"
+	"strings"
+
+	"github.com/pkg/errors"
+
+	"github.com/tendermint/tmlibs/log"
+)
+
+const (
+	defaultLogLevelKey = "*"
+)
+
+// ParseLogLevel parses complex log level - comma-separated
+// list of module:level pairs with an optional *:level pair (* means
+// all other modules).
+//
+// Example:
+//		ParseLogLevel("consensus:debug,mempool:debug,*:error", log.NewTMLogger(os.Stdout), "info")
+func ParseLogLevel(lvl string, logger log.Logger, defaultLogLevelValue string) (log.Logger, error) {
+	if lvl == "" {
+		return nil, errors.New("Empty log level")
+	}
+
+	l := lvl
+
+	// prefix simple one word levels (e.g. "info") with "*"
+	if !strings.Contains(l, ":") {
+		l = defaultLogLevelKey + ":" + l
+	}
+
+	options := make([]log.Option, 0)
+
+	isDefaultLogLevelSet := false
+	var option log.Option
+	var err error
+
+	list := strings.Split(l, ",")
+	for _, item := range list {
+		moduleAndLevel := strings.Split(item, ":")
+
+		if len(moduleAndLevel) != 2 {
+			return nil, fmt.Errorf("Expected list in a form of \"module:level\" pairs, given pair %s, list %s", item, list)
+		}
+
+		module := moduleAndLevel[0]
+		level := moduleAndLevel[1]
+
+		if module == defaultLogLevelKey {
+			option, err = log.AllowLevel(level)
+			if err != nil {
+				return nil, errors.Wrap(err, fmt.Sprintf("Failed to parse default log level (pair %s, list %s)", item, l))
+			}
+			options = append(options, option)
+			isDefaultLogLevelSet = true
+		} else {
+			switch level {
+			case "debug":
+				option = log.AllowDebugWith("module", module)
+			case "info":
+				option = log.AllowInfoWith("module", module)
+			case "error":
+				option = log.AllowErrorWith("module", module)
+			case "none":
+				option = log.AllowNoneWith("module", module)
+			default:
+				return nil, fmt.Errorf("Expected either \"info\", \"debug\", \"error\" or \"none\" log level, given %s (pair %s, list %s)", level, item, list)
+			}
+			options = append(options, option)
+
+		}
+	}
+
+	// if "*" is not provided, set default global level
+	if !isDefaultLogLevelSet {
+		option, err = log.AllowLevel(defaultLogLevelValue)
+		if err != nil {
+			return nil, err
+		}
+		options = append(options, option)
+	}
+
+	return log.NewFilter(logger, options...), nil
+}
diff --git a/cli/flags/log_level_test.go b/cli/flags/log_level_test.go
new file mode 100644
index 000000000..458a9e24d
--- /dev/null
+++ b/cli/flags/log_level_test.go
@@ -0,0 +1,96 @@
+package flags_test
+
+import (
+	"bytes"
+	"strings"
+	"testing"
+
+	tmflags "github.com/tendermint/tmlibs/cli/flags"
+	"github.com/tendermint/tmlibs/log"
+)
+
+const (
+	defaultLogLevelValue = "info"
+)
+
+func TestParseLogLevel(t *testing.T) {
+	var buf bytes.Buffer
+	jsonLogger := log.NewTMJSONLogger(&buf)
+
+	correctLogLevels := []struct {
+		lvl              string
+		expectedLogLines []string
+	}{
+		{"mempool:error", []string{
+			``, // if no default is given, assume info
+			``,
+			`{"_msg":"Mesmero","level":"error","module":"mempool"}`,
+			`{"_msg":"Mind","level":"info","module":"state"}`, // if no default is given, assume info
+			``}},
+
+		{"mempool:error,*:debug", []string{
+			`{"_msg":"Kingpin","level":"debug","module":"wire"}`,
+			``,
+			`{"_msg":"Mesmero","level":"error","module":"mempool"}`,
+			`{"_msg":"Mind","level":"info","module":"state"}`,
+			`{"_msg":"Gideon","level":"debug"}`}},
+
+		{"*:debug,wire:none", []string{
+			``,
+			`{"_msg":"Kitty Pryde","level":"info","module":"mempool"}`,
+			`{"_msg":"Mesmero","level":"error","module":"mempool"}`,
+			`{"_msg":"Mind","level":"info","module":"state"}`,
+			`{"_msg":"Gideon","level":"debug"}`}},
+	}
+
+	for _, c := range correctLogLevels {
+		logger, err := tmflags.ParseLogLevel(c.lvl, jsonLogger, defaultLogLevelValue)
+		if err != nil {
+			t.Fatal(err)
+		}
+
+		logger = logger
+
+		buf.Reset()
+
+		logger.With("module", "wire").Debug("Kingpin")
+		if have := strings.TrimSpace(buf.String()); c.expectedLogLines[0] != have {
+			t.Errorf("\nwant '%s'\nhave '%s'\nlevel '%s'", c.expectedLogLines[0], have, c.lvl)
+		}
+
+		buf.Reset()
+
+		logger.With("module", "mempool").Info("Kitty Pryde")
+		if have := strings.TrimSpace(buf.String()); c.expectedLogLines[1] != have {
+			t.Errorf("\nwant '%s'\nhave '%s'\nlevel '%s'", c.expectedLogLines[1], have, c.lvl)
+		}
+
+		buf.Reset()
+
+		logger.With("module", "mempool").Error("Mesmero")
+		if have := strings.TrimSpace(buf.String()); c.expectedLogLines[2] != have {
+			t.Errorf("\nwant '%s'\nhave '%s'\nlevel '%s'", c.expectedLogLines[2], have, c.lvl)
+		}
+
+		buf.Reset()
+
+		logger.With("module", "state").Info("Mind")
+		if have := strings.TrimSpace(buf.String()); c.expectedLogLines[3] != have {
+			t.Errorf("\nwant '%s'\nhave '%s'\nlevel '%s'", c.expectedLogLines[3], have, c.lvl)
+		}
+
+		buf.Reset()
+
+		logger.Debug("Gideon")
+		if have := strings.TrimSpace(buf.String()); c.expectedLogLines[4] != have {
+			t.Errorf("\nwant '%s'\nhave '%s'\nlevel '%s'", c.expectedLogLines[4], have, c.lvl)
+		}
+	}
+
+	incorrectLogLevel := []string{"some", "mempool:some", "*:some,mempool:error"}
+	for _, lvl := range incorrectLogLevel {
+		if _, err := tmflags.ParseLogLevel(lvl, jsonLogger, defaultLogLevelValue); err == nil {
+			t.Fatalf("Expected %s to produce error", lvl)
+		}
+	}
+}