The Xml Indenter plugin allows you to indent the XML contents of the current open buffer. You can invoke the "Indent XML" action via a keyboard shortcut or toolbar icon; this can be configured from "Utilities->Global Options->jEdit->Shortcuts" or "Utilities->Global Options->jEdit->Tool Bar" respectively.

The indent width amount and whether to use soft (emulated with spaces) tabs can be configured in the buffer options: "Utilities->Buffer Options".

The following improvements should eventually be made to the Indent XML feature: