>> error('This error\nhas a newline.') ??? This error has a newline.
Though previous versions of this wiki claimed this functionality was introduced in MATLAB 6.5 (R13), it doesn't work in 7.4.0 (2007a). The explanation that this change happened when formatted error strings were introduced in the Release Notes for that release was unhelpful.
To add a newline character in versions where the above example doesn't work, use SPRINTF or CHAR(10):
>> error(sprintf('This error\nhas a newline.')) ??? This error has a newline.
disp(['abcd' char(10) 'efgh']) abcd efgh
This works as well:
disp(['abcd', 10, 'efgh']) abcd efgh