diff --git a/lua/diffview/actions.lua b/lua/diffview/actions.lua
index a84b9426..5dda8ebf 100644
--- a/lua/diffview/actions.lua
+++ b/lua/diffview/actions.lua
@@ -9,6 +9,7 @@ local utils = lazy.require("diffview.utils") ---@module "diffview.utils"
 local vcs_utils = lazy.require("diffview.vcs.utils") ---@module "diffview.vcs.utils"
 
 local Diff1 = lazy.access("diffview.scene.layouts.diff_1", "Diff1") ---@type Diff1|LazyModule
+local Diff1Inline = lazy.access("diffview.scene.layouts.diff_1_inline", "Diff1Inline") ---@type Diff1Inline|LazyModule
 local Diff2Hor = lazy.access("diffview.scene.layouts.diff_2_hor", "Diff2Hor") ---@type Diff2Hor|LazyModule
 local Diff2Ver = lazy.access("diffview.scene.layouts.diff_2_ver", "Diff2Ver") ---@type Diff2Ver|LazyModule
 local Diff3 = lazy.access("diffview.scene.layouts.diff_3", "Diff3") ---@type Diff3|LazyModule
@@ -418,6 +419,7 @@ function M.cycle_layout()
     standard = {
       Diff2Hor.__get(),
       Diff2Ver.__get(),
+      Diff1Inline.__get(),
     },
     merge_tool = {
       Diff3Hor.__get(),
diff --git a/lua/diffview/config.lua b/lua/diffview/config.lua
index 844351bb..4399db0b 100644
--- a/lua/diffview/config.lua
+++ b/lua/diffview/config.lua
@@ -4,6 +4,7 @@ local actions = require("diffview.actions")
 local lazy = require("diffview.lazy")
 
 local Diff1 = lazy.access("diffview.scene.layouts.diff_1", "Diff1") ---@type Diff1|LazyModule
+local Diff1Inline = lazy.access("diffview.scene.layouts.diff_1_inline", "Diff1Inline") ---@type Diff1Inline|LazyModule
 local Diff2 = lazy.access("diffview.scene.layouts.diff_2", "Diff2") ---@type Diff2|LazyModule
 local Diff2Hor = lazy.access("diffview.scene.layouts.diff_2_hor", "Diff2Hor") ---@type Diff2Hor|LazyModule
 local Diff2Ver = lazy.access("diffview.scene.layouts.diff_2_ver", "Diff2Ver") ---@type Diff2Ver|LazyModule
@@ -312,6 +313,7 @@ function M.get_log_options(single_file, t, vcs)
 end
 
 ---@alias LayoutName "diff1_plain"
+---       | "diff1_inline"
 ---       | "diff2_horizontal"
 ---       | "diff2_vertical"
 ---       | "diff3_horizontal"
@@ -321,6 +323,7 @@ end
 
 local layout_map = {
   diff1_plain = Diff1,
+  diff1_inline = Diff1Inline,
   diff2_horizontal = Diff2Hor,
   diff2_vertical = Diff2Ver,
   diff3_horizontal = Diff3Hor,
@@ -510,7 +513,7 @@ function M.setup(user_config)
   do
     -- Validate layouts
     local view = M._config.view
-    local standard_layouts = { "diff2_horizontal", "diff2_vertical", -1 }
+    local standard_layouts = { "diff2_horizontal", "diff2_vertical", "diff1_inline", -1 }
     local merge_layuots = {
       "diff1_plain",
       "diff3_horizontal",
diff --git a/lua/diffview/init.lua b/lua/diffview/init.lua
index 22194a89..ee393fbc 100644
--- a/lua/diffview/init.lua
+++ b/lua/diffview/init.lua
@@ -5,6 +5,7 @@ end
 local hl = require("diffview.hl")
 local lazy = require("diffview.lazy")
 
+local StandardView = lazy.access("diffview.scene.views.standard.standard_view", "StandardView") ---@type StandardView|LazyModule
 local arg_parser = lazy.require("diffview.arg_parser") ---@module "diffview.arg_parser"
 local config = lazy.require("diffview.config") ---@module "diffview.config"
 local lib = lazy.require("diffview.lib") ---@module "diffview.lib"
@@ -75,6 +76,18 @@ function M.init()
       M.emit("refresh_files")
     end,
   })
+  au("User", {
+    group = M.augroup,
+    pattern = "GitSignsUpdate",
+    callback = function()
+      local view = lib.get_current_view()
+
+      if view and view:instanceof(StandardView.__get()) then
+        ---@cast view StandardView
+        view.cur_layout:gs_update_folds()
+      end
+    end,
+  })
 
   -- Set up user autocommand emitters
   DiffviewGlobal.emitter:on("view_opened", function(_)
diff --git a/lua/diffview/scene/file_entry.lua b/lua/diffview/scene/file_entry.lua
index 7529c764..c8d2896c 100644
--- a/lua/diffview/scene/file_entry.lua
+++ b/lua/diffview/scene/file_entry.lua
@@ -123,6 +123,7 @@ function FileEntry:convert_layout(target_layout)
   end
 
   self.layout = target_layout({
+    parent = self,
     a = utils.tbl_access(self.layout, "a.file") or create_file(self.revs.a, "a"),
     b = utils.tbl_access(self.layout, "b.file") or create_file(self.revs.b, "b"),
     c = utils.tbl_access(self.layout, "c.file") or create_file(self.revs.c, "c"),
@@ -243,7 +244,7 @@ function FileEntry.with_layout(layout_class, opt)
     }) --[[@as vcs.File ]]
   end
 
-  return FileEntry({
+  local entry = FileEntry({
     adapter = opt.adapter,
     path = opt.path,
     oldpath = opt.oldpath,
@@ -252,13 +253,17 @@ function FileEntry.with_layout(layout_class, opt)
     kind = opt.kind,
     commit = opt.commit,
     revs = opt.revs,
-    layout = layout_class({
-      a = create_file(opt.revs.a, "a"),
-      b = create_file(opt.revs.b, "b"),
-      c = create_file(opt.revs.c, "c"),
-      d = create_file(opt.revs.d, "d"),
-    }),
   })
+
+  entry.layout = layout_class({
+    parent = entry,
+    a = create_file(opt.revs.a, "a"),
+    b = create_file(opt.revs.b, "b"),
+    c = create_file(opt.revs.c, "c"),
+    d = create_file(opt.revs.d, "d"),
+  })
+
+  return entry
 end
 
 M.FileEntry = FileEntry
diff --git a/lua/diffview/scene/layout.lua b/lua/diffview/scene/layout.lua
index 46555578..5fc5e1e4 100644
--- a/lua/diffview/scene/layout.lua
+++ b/lua/diffview/scene/layout.lua
@@ -8,6 +8,7 @@ local api = vim.api
 local M = {}
 
 ---@class Layout : diffview.Object
+---@field parent FileEntry
 ---@field windows Window[]
 ---@field emitter EventEmitter
 ---@field pivot_producer fun(): integer?
@@ -15,6 +16,7 @@ local Layout = oop.create_class("Layout")
 
 function Layout:init(opt)
   opt = opt or {}
+  self.parent = opt.parent
   self.windows = opt.windows or {}
   self.emitter = opt.emitter or EventEmitter()
 
@@ -321,5 +323,7 @@ function Layout:sync_scroll()
   end
 end
 
+function Layout:gs_update_folds() end
+
 M.Layout = Layout
 return M
diff --git a/lua/diffview/scene/layouts/diff_1.lua b/lua/diffview/scene/layouts/diff_1.lua
index d7561f17..63b160d6 100644
--- a/lua/diffview/scene/layouts/diff_1.lua
+++ b/lua/diffview/scene/layouts/diff_1.lua
@@ -1,5 +1,5 @@
-local lazy = require("diffview.lazy")
 local Layout = require("diffview.scene.layout").Layout
+local lazy = require("diffview.lazy")
 local oop = require("diffview.oop")
 
 local Diff3 = lazy.access("diffview.scene.layouts.diff_3", "Diff3") ---@type Diff3|LazyModule
diff --git a/lua/diffview/scene/layouts/diff_1_inline.lua b/lua/diffview/scene/layouts/diff_1_inline.lua
new file mode 100644
index 00000000..81f3e2e7
--- /dev/null
+++ b/lua/diffview/scene/layouts/diff_1_inline.lua
@@ -0,0 +1,27 @@
+local Diff1 = require("diffview.scene.layouts.diff_1").Diff1
+local lazy = require("diffview.lazy")
+local oop = require("diffview.oop")
+
+local GitAdapter = lazy.access("diffview.vcs.adapters.git", "GitAdapter") ---@type GitAdapter|LazyModule
+
+local M = {}
+
+---@class Diff1Inline : Diff1
+local Diff1Inline = oop.create_class("Diff1Inline", Diff1)
+
+---@param opt Diff1.init.Opt
+function Diff1Inline:init(opt)
+  Diff1Inline:super().init(self, opt)
+end
+
+function Diff1Inline:gs_update_folds()
+  if self.b:is_file_open()
+    and self.b.file.adapter:instanceof(GitAdapter.__get())
+    and self.b.file.kind ~= "conflicting"
+  then
+    self.b:gs_update_folds()
+  end
+end
+
+M.Diff1Inline = Diff1Inline
+return M
diff --git a/lua/diffview/scene/window.lua b/lua/diffview/scene/window.lua
index f361d382..b3aaac78 100644
--- a/lua/diffview/scene/window.lua
+++ b/lua/diffview/scene/window.lua
@@ -1,10 +1,13 @@
 local lazy = require("diffview.lazy")
 local oop = require("diffview.oop")
 
+local Diff1 = lazy.access("diffview.scene.layouts.diff_1", "Diff1") ---@type Diff1|LazyModule
 local File = lazy.access("diffview.vcs.file", "File") ---@type vcs.File|LazyModule
 local FileHistoryView = lazy.access("diffview.scene.views.file_history.file_history_view", "FileHistoryView") ---@type FileHistoryView|LazyModule
+local GitAdapter = lazy.access("diffview.vcs.adapters.git", "GitAdapter") ---@type GitAdapter|LazyModule
 local RevType = lazy.access("diffview.vcs.rev", "RevType") ---@type RevType|LazyModule
 local config = lazy.require("diffview.config") ---@module "diffview.config"
+local gs_actions = lazy.require("gitsigns.actions") ---@module "gitsigns.actions"
 local lib = lazy.require("diffview.lib") ---@module "diffview.lib"
 local utils = lazy.require("diffview.utils") ---@module "diffview.utils"
 
@@ -69,6 +72,12 @@ function Window:pre_open()
   end
 end
 
+function Window:is_file_open()
+  return self:is_valid()
+      and self.file:is_valid()
+      and api.nvim_win_get_buf(self.id) == self.file.bufnr
+end
+
 ---@param callback fun(file: vcs.File)
 function Window:load_file(callback)
   assert(self.file)
@@ -95,11 +104,25 @@ function Window:open_file(callback)
         self:_save_winopts()
       end
 
-      self:apply_file_winopts()
+      local winopt_overrides
+      local base_rev = utils.tbl_access(self, "parent.parent.revs.a") --[[@as Rev? ]]
+      local use_inline_diff = self.file.kind ~= "conflicting"
+          and self.parent:instanceof(Diff1.__get())
+          and self.file.adapter:instanceof(GitAdapter.__get())
+
+      if use_inline_diff then
+        winopt_overrides = { foldmethod = "manual", diff = false }
+      end
+
+      self:apply_file_winopts(winopt_overrides)
       self.file:attach_buffer(false, {
         keymaps = config.get_layout_keymaps(self.parent),
         disable_diagnostics = self.file.kind == "conflicting"
             and conf.view.merge_tool.disable_diagnostics,
+        inline_diff = {
+          enabled = use_inline_diff,
+          base = base_rev and base_rev:object_name(),
+        }
       })
 
       if self:show_winbar_info() then
@@ -198,10 +221,15 @@ function Window:_restore_winopts()
   end
 end
 
-function Window:apply_file_winopts()
+---@param overrides WindowOptions?
+function Window:apply_file_winopts(overrides)
   assert(self.file)
   if self.file.winopts then
-    utils.set_local(self.id, self.file.winopts)
+    if overrides then
+      utils.set_local(self.id, vim.tbl_extend("force", self.file.winopts, overrides))
+    else
+      utils.set_local(self.id, self.file.winopts)
+    end
   end
 end
 
@@ -219,5 +247,47 @@ function Window:set_file(file)
   self.file = file
 end
 
+function Window:gs_update_folds()
+  if self:is_file_open() and vim.wo[self.id].foldenable then
+    api.nvim_win_call(self.id, function()
+      pcall(vim.cmd, "norm! zE") -- Delete all folds in window
+      local hunks = gs_actions.get_hunks(self.file.bufnr) or {}
+      local context
+
+      for _, v in ipairs(vim.opt.diffopt:get()) do
+        context = tonumber(v:match("^context:(%d+)"))
+        if context then break end
+      end
+
+      context = math.max(1, context or 6)
+
+      local prev_last = -context + 1
+      local lcount = api.nvim_buf_line_count(self.file.bufnr)
+
+      for i = 1, #hunks + 1 do
+        local hunk = hunks[i]
+        local first, last
+
+        if hunk then
+          first = hunk.added.start
+          last = first + hunk.added.count - 1
+        else
+          first = lcount + context
+          last = first
+        end
+
+        -- print(prev_last, first, last, hunk and "hunk" or "nil")
+
+        if first - prev_last > context * 2 + 1 then
+          -- print("FOLD:", prev_last + context, first - context)
+          vim.cmd(("%d,%dfold"):format(prev_last + context, first - context))
+        end
+
+        prev_last = last
+      end
+    end)
+  end
+end
+
 M.Window = Window
 return M
diff --git a/lua/diffview/vcs/file.lua b/lua/diffview/vcs/file.lua
index 5fa88077..bb0cc74f 100644
--- a/lua/diffview/vcs/file.lua
+++ b/lua/diffview/vcs/file.lua
@@ -5,11 +5,18 @@ local GitRev = lazy.access("diffview.vcs.adapters.git.rev", "GitRev") ---@type G
 local RevType = lazy.access("diffview.vcs.rev", "RevType") ---@type RevType|LazyModule
 local async = lazy.require("plenary.async") ---@module "plenary.async"
 local config = lazy.require("diffview.config") ---@module "diffview.config"
+local debounce = lazy.require("diffview.debounce") ---@module "diffview.debounce"
+local gs_actions = lazy.require("gitsigns.actions") ---@module "gitsigns.actions"
 local lib = lazy.require("diffview.lib") ---@module "diffview.lib"
 local utils = lazy.require("diffview.utils") ---@module "diffview.utils"
 
 local pl = lazy.access(utils, "path") ---@type PathLib|LazyModule
 
+local gs_refresh = debounce.debounce_trailing(20, false, vim.schedule_wrap(function(callback)
+  gs_actions.refresh()
+  if vim.is_callable(callback) then callback() end
+end))
+
 local api = vim.api
 local M = {}
 
@@ -279,10 +286,18 @@ end
 ---@param t2 table
 ---@return vcs.File.AttachState
 local function prepare_attach_opt(t1, t2)
-  local res = vim.tbl_extend("keep", t1, {
+  ---@class vcs.File.AttachState
+  local default_opt = {
     keymaps = {},
     disable_diagnostics = false,
-  })
+    inline_diff = {
+      enabled = false,
+      base = nil --[[@as string? ]],
+      update = nil --[[@as function? ]],
+    }
+  }
+
+  local res = vim.tbl_extend("force", default_opt, t1)
 
   for k, v in pairs(t2) do
     local t = type(res[k])
@@ -299,10 +314,6 @@ local function prepare_attach_opt(t1, t2)
   return res
 end
 
----@class vcs.File.AttachState
----@field keymaps table
----@field disable_diagnostics boolean
-
 ---@param force? boolean
 ---@param opt? vcs.File.AttachState
 function File:attach_buffer(force, opt)
@@ -332,6 +343,23 @@ function File:attach_buffer(force, opt)
         vim.diagnostic.disable(self.bufnr)
       end
 
+      -- Inline diff
+      if state.inline_diff.enabled then
+        local gitsigns = require("gitsigns")
+        local gs_config = require("gitsigns.config").config
+        gitsigns.attach(self.bufnr, {
+          file = self.path,
+          toplevel = self.adapter.ctx.toplevel,
+          gitdir = self.adapter.ctx.dir,
+          commit = self.rev.type ~= RevType.LOCAL and self.rev:object_name() or nil,
+          base = utils.sate(state.inline_diff.base, self.rev.type == RevType.STAGE and "HEAD"),
+        })
+        gs_config.linehl = true
+        gs_config.show_deleted = true
+        gs_config.word_diff = true
+        gs_refresh(state.inline_diff.update)
+      end
+
       File.attached[self.bufnr] = state
     end
   end
@@ -359,6 +387,15 @@ function File:detach_buffer()
         vim.diagnostic.enable(self.bufnr)
       end
 
+      -- Inline diff
+      if state.inline_diff.enabled then
+        local gs_config = require("gitsigns.config").config
+        gs_config.linehl = false
+        gs_config.show_deleted = false
+        gs_config.word_diff = false
+        gs_refresh(state.inline_diff.update)
+      end
+
       File.attached[self.bufnr] = nil
     end
   end