diff --git a/package.json b/package.json
index 77b89f65c..28e4eacc7 100644
--- a/package.json
+++ b/package.json
@@ -23,6 +23,7 @@
     "clear-cut": "0.2.0",
     "coffee-script": "1.6.3",
     "coffeestack": "0.6.0",
+    "diff": "git://github.com/benogle/jsdiff.git",
     "emissary": "0.19.0",
     "first-mate": "0.5.0",
     "fs-plus": "0.11.0",
diff --git a/spec/text-buffer-spec.coffee b/spec/text-buffer-spec.coffee
index 31066cd5b..0aaf9a3b5 100644
--- a/spec/text-buffer-spec.coffee
+++ b/spec/text-buffer-spec.coffee
@@ -113,10 +113,17 @@ describe 'TextBuffer', ->
 
         runs ->
           [event] = changeHandler.argsForCall[0]
-          expect(event.oldRange).toEqual [[0, 0], [0, 5]]
+          expect(event.oldRange).toEqual [[0, 0], [0, 0]]
           expect(event.newRange).toEqual [[0, 0], [0, 6]]
-          expect(event.oldText).toBe "first"
+          expect(event.oldText).toBe ""
           expect(event.newText).toBe "second"
+
+          [event] = changeHandler.argsForCall[1]
+          expect(event.oldRange).toEqual [[0, 6], [0, 11]]
+          expect(event.newRange).toEqual [[0, 6], [0, 6]]
+          expect(event.oldText).toBe "first"
+          expect(event.newText).toBe ""
+
           expect(buffer.isModified()).toBeFalsy()
 
     describe "when the buffer's memory contents differ from the *previous* disk contents", ->
@@ -454,6 +461,68 @@ describe 'TextBuffer', ->
       expect(event.oldRange).toEqual expectedPreRange
       expect(event.newRange).toEqual [[0, 0], [1, 14]]
 
+  describe ".setTextViaDiff(text)", ->
+    it "can change the entire contents of the buffer when there are no newlines", ->
+      buffer.setText('BUFFER CHANGE')
+      newText = 'DISK CHANGE'
+      buffer.setTextViaDiff(newText)
+      expect(buffer.getText()).toBe newText
+
+    describe "with standard newlines", ->
+      it "can change the entire contents of the buffer with no newline at the end", ->
+        newText = "I know you are.\nBut what am I?"
+        buffer.setTextViaDiff(newText)
+        expect(buffer.getText()).toBe newText
+
+      it "can change the entire contents of the buffer with a newline at the end", ->
+        newText = "I know you are.\nBut what am I?\n"
+        buffer.setTextViaDiff(newText)
+        expect(buffer.getText()).toBe newText
+
+      it "can change a few lines at the beginning in the buffer", ->
+        newText = buffer.getText().replace(/function/g, 'omgwow')
+        buffer.setTextViaDiff(newText)
+        expect(buffer.getText()).toBe newText
+
+      it "can change a few lines in the middle of the buffer", ->
+        newText = buffer.getText().replace(/shift/g, 'omgwow')
+        buffer.setTextViaDiff(newText)
+        expect(buffer.getText()).toBe newText
+
+      it "can adds a newline at the end", ->
+        newText = buffer.getText() + '\n'
+        buffer.setTextViaDiff(newText)
+        expect(buffer.getText()).toBe newText
+
+    describe "with windows newlines", ->
+      beforeEach ->
+        buffer.setText(buffer.getText().replace(/\n/g, '\r\n'))
+
+      it "adds a newline at the end", ->
+        newText = buffer.getText() + '\r\n'
+        buffer.setTextViaDiff(newText)
+        expect(buffer.getText()).toBe newText
+
+      it "changes the entire contents of the buffer with smaller content with no newline at the end", ->
+        newText = "I know you are.\r\nBut what am I?"
+        buffer.setTextViaDiff(newText)
+        expect(buffer.getText()).toBe newText
+
+      it "changes the entire contents of the buffer with smaller content with newline at the end", ->
+        newText = "I know you are.\r\nBut what am I?\r\n"
+        buffer.setTextViaDiff(newText)
+        expect(buffer.getText()).toBe newText
+
+      it "changes a few lines at the beginning in the buffer", ->
+        newText = buffer.getText().replace(/function/g, 'omgwow')
+        buffer.setTextViaDiff(newText)
+        expect(buffer.getText()).toBe newText
+
+      it "changes a few lines in the middle of the buffer", ->
+        newText = buffer.getText().replace(/shift/g, 'omgwow')
+        buffer.setTextViaDiff(newText)
+        expect(buffer.getText()).toBe newText
+
   describe ".save()", ->
     saveBuffer = null
 
diff --git a/src/text-buffer.coffee b/src/text-buffer.coffee
index 665b7d02d..76f897e3c 100644
--- a/src/text-buffer.coffee
+++ b/src/text-buffer.coffee
@@ -1,4 +1,5 @@
 _ = require 'underscore-plus'
+diff = require 'diff'
 Q = require 'q'
 {P} = require 'scandal'
 telepath = require 'telepath'
@@ -133,7 +134,7 @@ class TextBuffer extends telepath.Model
   # Sets the buffer's content to the cached disk contents
   reload: ->
     @emit 'will-reload'
-    @setText(@cachedDiskContents)
+    @setTextViaDiff(@cachedDiskContents)
     @emitModifiedStatusChanged(false)
     @emit 'reloaded'
 
@@ -198,6 +199,52 @@ class TextBuffer extends telepath.Model
   setText: (text) ->
     @change(@getRange(), text, normalizeLineEndings: false)
 
+  # Private: Replaces the current buffer contents. Only apply the differences.
+  #
+  # text - A {String} containing the new buffer contents.
+  setTextViaDiff: (text) ->
+    currentText = @getText()
+    return if currentText == text
+
+    endsWithNewline = (str) ->
+      /[\r\n]+$/g.test(str)
+
+    computeBufferColumn = (str) ->
+      newlineIndex = Math.max(str.lastIndexOf('\n'), str.lastIndexOf('\r'))
+      if endsWithNewline(str)
+        0
+      else if newlineIndex == -1
+        str.length
+      else
+        str.length - newlineIndex - 1
+
+    @transact =>
+      row = 0
+      column = 0
+      currentPosition = [0, 0]
+
+      lineDiff = diff.diffLines(currentText, text)
+      changeOptions = normalizeLineEndings: false
+
+      for change in lineDiff
+        lineCount = change.value.match(/\n/g)?.length ? 0
+        currentPosition[0] = row
+        currentPosition[1] = column
+
+        if change.added
+          @change([currentPosition, currentPosition], change.value, changeOptions)
+          row += lineCount
+          column = computeBufferColumn(change.value)
+
+        else if change.removed
+          endRow = row + lineCount
+          endColumn = column + computeBufferColumn(change.value)
+          @change([currentPosition, [endRow, endColumn]], '', changeOptions)
+
+        else
+          row += lineCount
+          column = computeBufferColumn(change.value)
+
   # Gets the range of the buffer contents.
   #
   # Returns a new {Range}, from `[0, 0]` to the end of the buffer.