diff --git a/doc/diffs.nvim.txt b/doc/diffs.nvim.txt
index b3240f4..76e5ea3 100644
--- a/doc/diffs.nvim.txt
+++ b/doc/diffs.nvim.txt
@@ -64,6 +64,11 @@ Configuration is done via `vim.g.diffs`. Set this before the plugin loads:
           enabled = false,
           max_lines = 200,
         },
+        intra = {
+          enabled = true,
+          algorithm = 'auto',
+          max_lines = 200,
+        },
       },
       fugitive = {
         horizontal = 'du',
@@ -116,6 +121,10 @@ Configuration is done via `vim.g.diffs`. Set this before the plugin loads:
                              Vim syntax highlighting options (experimental).
                              See |diffs.VimConfig| for fields.
 
+        {intra}              (table, default: see below)
+                             Character-level (intra-line) diff highlighting.
+                             See |diffs.IntraConfig| for fields.
+
                                                     *diffs.TreesitterConfig*
     Treesitter config fields: ~
         {enabled}            (boolean, default: true)
@@ -140,6 +149,26 @@ Configuration is done via `vim.g.diffs`. Set this before the plugin loads:
                              this many lines. Lower than the treesitter default
                              due to the per-character cost of |synID()|.
 
+                                                        *diffs.IntraConfig*
+    Intra config fields: ~
+        {enabled}            (boolean, default: true)
+                             Enable character-level diff highlighting within
+                             changed lines. When a line changes from `local x = 1`
+                             to `local x = 2`, only the `1`/`2` characters get
+                             an intense background overlay while the rest of the
+                             line keeps the softer line-level background.
+
+        {algorithm}          (string, default: 'auto')
+                             Diff algorithm for character-level analysis.
+                             `'auto'`: use libvscodediff if available, else
+                             native `vim.diff()`. `'native'`: always use
+                             `vim.diff()`. `'vscode'`: require libvscodediff
+                             (falls back to native if not available).
+
+        {max_lines}          (integer, default: 200)
+                             Skip character-level highlighting for hunks larger
+                             than this many lines.
+
     Note: Header context (e.g., `@@ -10,3 +10,4 @@ func()`) is always
     highlighted with treesitter when a parser is available.
 
@@ -259,6 +288,8 @@ Summary / commit detail views: ~
    - Background extmarks (`DiffsAdd`/`DiffsDelete`) at priority 198
    - `Normal` extmarks at priority 199 clear underlying diff foreground
    - Syntax highlights are applied as extmarks at priority 200
+   - Character-level diff extmarks (`DiffsAddText`/`DiffsDeleteText`) at
+     priority 201 overlay changed characters with an intense background
    - Conceal extmarks hide diff prefixes when `hide_prefix` is enabled
 4. Re-highlighting occurs on `TextChanged` (debounced) and `Syntax` events
 
@@ -349,6 +380,18 @@ Fugitive unified diff highlights: ~
     DiffsDeleteNr       Line number for `-` lines. Foreground from
                         `diffRemoved`, background from `DiffsDelete`.
 
+                                                              *DiffsAddText*
+    DiffsAddText        Character-level background for changed characters
+                        within `+` lines. Derived by blending `DiffAdd`
+                        background with `Normal` at 70% alpha (brighter
+                        than line-level `DiffsAdd`). Only sets `bg`, so
+                        treesitter foreground colors show through.
+
+                                                           *DiffsDeleteText*
+    DiffsDeleteText     Character-level background for changed characters
+                        within `-` lines. Derived by blending `DiffDelete`
+                        background with `Normal` at 70% alpha.
+
 Diff mode window highlights: ~
 These are used for |winhighlight| remapping in `&diff` windows.
 
@@ -382,6 +425,7 @@ Run |:checkhealth| diffs to verify your setup.
 Checks performed:
 - Neovim version >= 0.9.0
 - vim-fugitive is installed (optional)
+- libvscode_diff shared library is available (optional)
 
 ==============================================================================
 ACKNOWLEDGEMENTS                                     *diffs-acknowledgements*
diff --git a/lua/diffs/diff.lua b/lua/diffs/diff.lua
new file mode 100644
index 0000000..8dc836b
--- /dev/null
+++ b/lua/diffs/diff.lua
@@ -0,0 +1,338 @@
+---@class diffs.CharSpan
+---@field line integer
+---@field col_start integer
+---@field col_end integer
+
+---@class diffs.IntraChanges
+---@field add_spans diffs.CharSpan[]
+---@field del_spans diffs.CharSpan[]
+
+---@class diffs.ChangeGroup
+---@field del_lines {idx: integer, text: string}[]
+---@field add_lines {idx: integer, text: string}[]
+
+local M = {}
+
+local dbg = require('diffs.log').dbg
+
+---@param hunk_lines string[]
+---@return diffs.ChangeGroup[]
+function M.extract_change_groups(hunk_lines)
+  ---@type diffs.ChangeGroup[]
+  local groups = {}
+  ---@type {idx: integer, text: string}[]
+  local del_buf = {}
+  ---@type {idx: integer, text: string}[]
+  local add_buf = {}
+
+  ---@type boolean
+  local in_del = false
+
+  for i, line in ipairs(hunk_lines) do
+    local prefix = line:sub(1, 1)
+    if prefix == '-' then
+      if not in_del and #add_buf > 0 then
+        if #del_buf > 0 then
+          table.insert(groups, { del_lines = del_buf, add_lines = add_buf })
+        end
+        del_buf = {}
+        add_buf = {}
+      end
+      in_del = true
+      table.insert(del_buf, { idx = i, text = line:sub(2) })
+    elseif prefix == '+' then
+      in_del = false
+      table.insert(add_buf, { idx = i, text = line:sub(2) })
+    else
+      if #del_buf > 0 and #add_buf > 0 then
+        table.insert(groups, { del_lines = del_buf, add_lines = add_buf })
+      end
+      del_buf = {}
+      add_buf = {}
+      in_del = false
+    end
+  end
+
+  if #del_buf > 0 and #add_buf > 0 then
+    table.insert(groups, { del_lines = del_buf, add_lines = add_buf })
+  end
+
+  return groups
+end
+
+---@param old_text string
+---@param new_text string
+---@return {old_start: integer, old_count: integer, new_start: integer, new_count: integer}[]
+local function byte_diff(old_text, new_text)
+  local ok, result = pcall(vim.diff, old_text, new_text, { result_type = 'indices' })
+  if not ok or not result then
+    return {}
+  end
+  ---@type {old_start: integer, old_count: integer, new_start: integer, new_count: integer}[]
+  local hunks = {}
+  for _, h in ipairs(result) do
+    table.insert(hunks, {
+      old_start = h[1],
+      old_count = h[2],
+      new_start = h[3],
+      new_count = h[4],
+    })
+  end
+  return hunks
+end
+
+---@param s string
+---@return string[]
+local function split_bytes(s)
+  local bytes = {}
+  for i = 1, #s do
+    table.insert(bytes, s:sub(i, i))
+  end
+  return bytes
+end
+
+---@param old_line string
+---@param new_line string
+---@param del_idx integer
+---@param add_idx integer
+---@return diffs.CharSpan[], diffs.CharSpan[]
+local function char_diff_pair(old_line, new_line, del_idx, add_idx)
+  ---@type diffs.CharSpan[]
+  local del_spans = {}
+  ---@type diffs.CharSpan[]
+  local add_spans = {}
+
+  local old_bytes = split_bytes(old_line)
+  local new_bytes = split_bytes(new_line)
+
+  local old_text = table.concat(old_bytes, '\n') .. '\n'
+  local new_text = table.concat(new_bytes, '\n') .. '\n'
+
+  local char_hunks = byte_diff(old_text, new_text)
+
+  for _, ch in ipairs(char_hunks) do
+    if ch.old_count > 0 then
+      table.insert(del_spans, {
+        line = del_idx,
+        col_start = ch.old_start,
+        col_end = ch.old_start + ch.old_count,
+      })
+    end
+
+    if ch.new_count > 0 then
+      table.insert(add_spans, {
+        line = add_idx,
+        col_start = ch.new_start,
+        col_end = ch.new_start + ch.new_count,
+      })
+    end
+  end
+
+  return del_spans, add_spans
+end
+
+---@param group diffs.ChangeGroup
+---@return diffs.CharSpan[], diffs.CharSpan[]
+local function diff_group_native(group)
+  ---@type diffs.CharSpan[]
+  local all_del = {}
+  ---@type diffs.CharSpan[]
+  local all_add = {}
+
+  local del_count = #group.del_lines
+  local add_count = #group.add_lines
+
+  if del_count == 1 and add_count == 1 then
+    local ds, as = char_diff_pair(
+      group.del_lines[1].text,
+      group.add_lines[1].text,
+      group.del_lines[1].idx,
+      group.add_lines[1].idx
+    )
+    vim.list_extend(all_del, ds)
+    vim.list_extend(all_add, as)
+    return all_del, all_add
+  end
+
+  local old_texts = {}
+  for _, l in ipairs(group.del_lines) do
+    table.insert(old_texts, l.text)
+  end
+  local new_texts = {}
+  for _, l in ipairs(group.add_lines) do
+    table.insert(new_texts, l.text)
+  end
+
+  local old_block = table.concat(old_texts, '\n') .. '\n'
+  local new_block = table.concat(new_texts, '\n') .. '\n'
+
+  local line_hunks = byte_diff(old_block, new_block)
+
+  ---@type table<integer, integer>
+  local old_to_new = {}
+  for _, lh in ipairs(line_hunks) do
+    if lh.old_count == lh.new_count then
+      for k = 0, lh.old_count - 1 do
+        old_to_new[lh.old_start + k] = lh.new_start + k
+      end
+    end
+  end
+
+  for old_i, new_i in pairs(old_to_new) do
+    if group.del_lines[old_i] and group.add_lines[new_i] then
+      local ds, as = char_diff_pair(
+        group.del_lines[old_i].text,
+        group.add_lines[new_i].text,
+        group.del_lines[old_i].idx,
+        group.add_lines[new_i].idx
+      )
+      vim.list_extend(all_del, ds)
+      vim.list_extend(all_add, as)
+    end
+  end
+
+  for _, lh in ipairs(line_hunks) do
+    if lh.old_count ~= lh.new_count then
+      local pairs_count = math.min(lh.old_count, lh.new_count)
+      for k = 0, pairs_count - 1 do
+        local oi = lh.old_start + k
+        local ni = lh.new_start + k
+        if group.del_lines[oi] and group.add_lines[ni] then
+          local ds, as = char_diff_pair(
+            group.del_lines[oi].text,
+            group.add_lines[ni].text,
+            group.del_lines[oi].idx,
+            group.add_lines[ni].idx
+          )
+          vim.list_extend(all_del, ds)
+          vim.list_extend(all_add, as)
+        end
+      end
+    end
+  end
+
+  return all_del, all_add
+end
+
+---@param group diffs.ChangeGroup
+---@param handle table
+---@return diffs.CharSpan[], diffs.CharSpan[]
+local function diff_group_vscode(group, handle)
+  ---@type diffs.CharSpan[]
+  local all_del = {}
+  ---@type diffs.CharSpan[]
+  local all_add = {}
+
+  local ffi = require('ffi')
+
+  local old_texts = {}
+  for _, l in ipairs(group.del_lines) do
+    table.insert(old_texts, l.text)
+  end
+  local new_texts = {}
+  for _, l in ipairs(group.add_lines) do
+    table.insert(new_texts, l.text)
+  end
+
+  local orig_arr = ffi.new('const char*[?]', #old_texts)
+  for i, t in ipairs(old_texts) do
+    orig_arr[i - 1] = t
+  end
+
+  local mod_arr = ffi.new('const char*[?]', #new_texts)
+  for i, t in ipairs(new_texts) do
+    mod_arr[i - 1] = t
+  end
+
+  local opts = ffi.new('DiffsDiffOptions', {
+    ignore_trim_whitespace = false,
+    max_computation_time_ms = 1000,
+    compute_moves = false,
+    extend_to_subwords = false,
+  })
+
+  local result = handle.compute_diff(orig_arr, #old_texts, mod_arr, #new_texts, opts)
+  if result == nil then
+    return all_del, all_add
+  end
+
+  for ci = 0, result.changes.count - 1 do
+    local mapping = result.changes.mappings[ci]
+    for ii = 0, mapping.inner_change_count - 1 do
+      local inner = mapping.inner_changes[ii]
+
+      local orig_line = inner.original.start_line
+      if group.del_lines[orig_line] then
+        table.insert(all_del, {
+          line = group.del_lines[orig_line].idx,
+          col_start = inner.original.start_col,
+          col_end = inner.original.end_col,
+        })
+      end
+
+      local mod_line = inner.modified.start_line
+      if group.add_lines[mod_line] then
+        table.insert(all_add, {
+          line = group.add_lines[mod_line].idx,
+          col_start = inner.modified.start_col,
+          col_end = inner.modified.end_col,
+        })
+      end
+    end
+  end
+
+  handle.free_lines_diff(result)
+
+  return all_del, all_add
+end
+
+---@param hunk_lines string[]
+---@param algorithm? string
+---@return diffs.IntraChanges?
+function M.compute_intra_hunks(hunk_lines, algorithm)
+  local groups = M.extract_change_groups(hunk_lines)
+  if #groups == 0 then
+    return nil
+  end
+
+  algorithm = algorithm or 'auto'
+
+  local lib = require('diffs.lib')
+  local vscode_handle = nil
+  if algorithm ~= 'native' then
+    vscode_handle = lib.load()
+  end
+
+  if algorithm == 'vscode' and not vscode_handle then
+    dbg('vscode algorithm requested but library not available, falling back to native')
+  end
+
+  ---@type diffs.CharSpan[]
+  local all_add = {}
+  ---@type diffs.CharSpan[]
+  local all_del = {}
+
+  for _, group in ipairs(groups) do
+    local ds, as
+    if vscode_handle then
+      ds, as = diff_group_vscode(group, vscode_handle)
+    else
+      ds, as = diff_group_native(group)
+    end
+    vim.list_extend(all_del, ds)
+    vim.list_extend(all_add, as)
+  end
+
+  if #all_add == 0 and #all_del == 0 then
+    return nil
+  end
+
+  return { add_spans = all_add, del_spans = all_del }
+end
+
+---@return boolean
+function M.has_vscode()
+  return require('diffs.lib').has_lib()
+end
+
+return M
diff --git a/lua/diffs/health.lua b/lua/diffs/health.lua
index c4777ca..54a3189 100644
--- a/lua/diffs/health.lua
+++ b/lua/diffs/health.lua
@@ -15,6 +15,13 @@ function M.check()
   else
     vim.health.warn('vim-fugitive not detected (required for unified diff highlighting)')
   end
+
+  local lib = require('diffs.lib')
+  if lib.has_lib() then
+    vim.health.ok('libvscode_diff found at ' .. lib.lib_path())
+  else
+    vim.health.info('libvscode_diff not found (optional, using native vim.diff fallback)')
+  end
 end
 
 return M
diff --git a/lua/diffs/highlight.lua b/lua/diffs/highlight.lua
index 9f4d882..1eb16d7 100644
--- a/lua/diffs/highlight.lua
+++ b/lua/diffs/highlight.lua
@@ -1,6 +1,7 @@
 local M = {}
 
 local dbg = require('diffs.log').dbg
+local diff = require('diffs.diff')
 
 ---@param bufnr integer
 ---@param ns integer
@@ -282,6 +283,30 @@ function M.highlight_hunk(bufnr, ns, hunk, opts)
 
   local syntax_applied = extmark_count > 0
 
+  ---@type diffs.IntraChanges?
+  local intra = nil
+  local intra_cfg = opts.highlights.intra
+  if intra_cfg and intra_cfg.enabled and #hunk.lines <= intra_cfg.max_lines then
+    intra = diff.compute_intra_hunks(hunk.lines, intra_cfg.algorithm)
+  end
+
+  ---@type table<integer, diffs.CharSpan[]>
+  local char_spans_by_line = {}
+  if intra then
+    for _, span in ipairs(intra.add_spans) do
+      if not char_spans_by_line[span.line] then
+        char_spans_by_line[span.line] = {}
+      end
+      table.insert(char_spans_by_line[span.line], span)
+    end
+    for _, span in ipairs(intra.del_spans) do
+      if not char_spans_by_line[span.line] then
+        char_spans_by_line[span.line] = {}
+      end
+      table.insert(char_spans_by_line[span.line], span)
+    end
+  end
+
   for i, line in ipairs(hunk.lines) do
     local buf_line = hunk.start_line + i - 1
     local line_len = #line
@@ -317,6 +342,18 @@ function M.highlight_hunk(bufnr, ns, hunk, opts)
         priority = 199,
       })
     end
+
+    if char_spans_by_line[i] then
+      local char_hl = prefix == '+' and 'DiffsAddText' or 'DiffsDeleteText'
+      for _, span in ipairs(char_spans_by_line[i]) do
+        pcall(vim.api.nvim_buf_set_extmark, bufnr, ns, buf_line, span.col_start, {
+          end_col = span.col_end,
+          hl_group = char_hl,
+          priority = 201,
+        })
+        extmark_count = extmark_count + 1
+      end
+    end
   end
 
   dbg('hunk %s:%d applied %d extmarks', hunk.filename, hunk.start_line, extmark_count)
diff --git a/lua/diffs/init.lua b/lua/diffs/init.lua
index b9944a4..ea33a32 100644
--- a/lua/diffs/init.lua
+++ b/lua/diffs/init.lua
@@ -6,11 +6,17 @@
 ---@field enabled boolean
 ---@field max_lines integer
 
+---@class diffs.IntraConfig
+---@field enabled boolean
+---@field algorithm string
+---@field max_lines integer
+
 ---@class diffs.Highlights
 ---@field background boolean
 ---@field gutter boolean
 ---@field treesitter diffs.TreesitterConfig
 ---@field vim diffs.VimConfig
+---@field intra diffs.IntraConfig
 
 ---@class diffs.FugitiveConfig
 ---@field horizontal string|false
@@ -82,6 +88,11 @@ local default_config = {
       enabled = false,
       max_lines = 200,
     },
+    intra = {
+      enabled = true,
+      algorithm = 'auto',
+      max_lines = 200,
+    },
   },
   fugitive = {
     horizontal = 'du',
@@ -172,10 +183,15 @@ local function compute_highlight_groups()
   local blended_add = blend_color(add_bg, bg, 0.4)
   local blended_del = blend_color(del_bg, bg, 0.4)
 
+  local blended_add_text = blend_color(add_bg, bg, 0.7)
+  local blended_del_text = blend_color(del_bg, bg, 0.7)
+
   vim.api.nvim_set_hl(0, 'DiffsAdd', { default = true, bg = blended_add })
   vim.api.nvim_set_hl(0, 'DiffsDelete', { default = true, bg = blended_del })
   vim.api.nvim_set_hl(0, 'DiffsAddNr', { default = true, fg = add_fg, bg = blended_add })
   vim.api.nvim_set_hl(0, 'DiffsDeleteNr', { default = true, fg = del_fg, bg = blended_del })
+  vim.api.nvim_set_hl(0, 'DiffsAddText', { default = true, bg = blended_add_text })
+  vim.api.nvim_set_hl(0, 'DiffsDeleteText', { default = true, bg = blended_del_text })
 
   local diff_change = resolve_hl('DiffChange')
   local diff_text = resolve_hl('DiffText')
@@ -207,6 +223,7 @@ local function init()
       ['highlights.gutter'] = { opts.highlights.gutter, 'boolean', true },
       ['highlights.treesitter'] = { opts.highlights.treesitter, 'table', true },
       ['highlights.vim'] = { opts.highlights.vim, 'table', true },
+      ['highlights.intra'] = { opts.highlights.intra, 'table', true },
     })
 
     if opts.highlights.treesitter then
@@ -226,6 +243,20 @@ local function init()
         ['highlights.vim.max_lines'] = { opts.highlights.vim.max_lines, 'number', true },
       })
     end
+
+    if opts.highlights.intra then
+      vim.validate({
+        ['highlights.intra.enabled'] = { opts.highlights.intra.enabled, 'boolean', true },
+        ['highlights.intra.algorithm'] = {
+          opts.highlights.intra.algorithm,
+          function(v)
+            return v == nil or v == 'auto' or v == 'native' or v == 'vscode'
+          end,
+          "'auto', 'native', or 'vscode'",
+        },
+        ['highlights.intra.max_lines'] = { opts.highlights.intra.max_lines, 'number', true },
+      })
+    end
   end
 
   if opts.fugitive then
@@ -266,6 +297,14 @@ local function init()
   then
     error('diffs: highlights.vim.max_lines must be >= 1')
   end
+  if
+    opts.highlights
+    and opts.highlights.intra
+    and opts.highlights.intra.max_lines
+    and opts.highlights.intra.max_lines < 1
+  then
+    error('diffs: highlights.intra.max_lines must be >= 1')
+  end
 
   config = vim.tbl_deep_extend('force', default_config, opts)
   log.set_enabled(config.debug)
diff --git a/lua/diffs/lib.lua b/lua/diffs/lib.lua
new file mode 100644
index 0000000..5b3254b
--- /dev/null
+++ b/lua/diffs/lib.lua
@@ -0,0 +1,214 @@
+local M = {}
+
+local dbg = require('diffs.log').dbg
+
+---@type table?
+local cached_handle = nil
+
+---@type boolean
+local download_in_progress = false
+
+---@return string
+local function get_os()
+  local os_name = jit.os:lower()
+  if os_name == 'osx' then
+    return 'macos'
+  end
+  return os_name
+end
+
+---@return string
+local function get_arch()
+  return jit.arch:lower()
+end
+
+---@return string
+local function get_ext()
+  local os_name = jit.os:lower()
+  if os_name == 'windows' then
+    return 'dll'
+  elseif os_name == 'osx' then
+    return 'dylib'
+  end
+  return 'so'
+end
+
+---@return string
+local function lib_dir()
+  return vim.fn.stdpath('data') .. '/diffs/lib'
+end
+
+---@return string
+local function lib_path()
+  return lib_dir() .. '/libvscode_diff.' .. get_ext()
+end
+
+---@return string
+local function version_path()
+  return lib_dir() .. '/version'
+end
+
+local EXPECTED_VERSION = '2.18.0'
+
+---@return boolean
+function M.has_lib()
+  if cached_handle then
+    return true
+  end
+  return vim.fn.filereadable(lib_path()) == 1
+end
+
+---@return string
+function M.lib_path()
+  return lib_path()
+end
+
+---@return table?
+function M.load()
+  if cached_handle then
+    return cached_handle
+  end
+
+  local path = lib_path()
+  if vim.fn.filereadable(path) ~= 1 then
+    return nil
+  end
+
+  local ffi = require('ffi')
+
+  ffi.cdef([[
+    typedef struct {
+      int start_line;
+      int end_line;
+    } DiffsLineRange;
+
+    typedef struct {
+      int start_line;
+      int start_col;
+      int end_line;
+      int end_col;
+    } DiffsCharRange;
+
+    typedef struct {
+      DiffsCharRange original;
+      DiffsCharRange modified;
+    } DiffsRangeMapping;
+
+    typedef struct {
+      DiffsLineRange original;
+      DiffsLineRange modified;
+      DiffsRangeMapping* inner_changes;
+      int inner_change_count;
+    } DiffsDetailedMapping;
+
+    typedef struct {
+      DiffsDetailedMapping* mappings;
+      int count;
+      int capacity;
+    } DiffsDetailedMappingArray;
+
+    typedef struct {
+      DiffsLineRange original;
+      DiffsLineRange modified;
+    } DiffsMovedText;
+
+    typedef struct {
+      DiffsMovedText* moves;
+      int count;
+      int capacity;
+    } DiffsMovedTextArray;
+
+    typedef struct {
+      DiffsDetailedMappingArray changes;
+      DiffsMovedTextArray moves;
+      bool hit_timeout;
+    } DiffsLinesDiff;
+
+    typedef struct {
+      bool ignore_trim_whitespace;
+      int max_computation_time_ms;
+      bool compute_moves;
+      bool extend_to_subwords;
+    } DiffsDiffOptions;
+
+    DiffsLinesDiff* compute_diff(
+      const char** original_lines,
+      int original_count,
+      const char** modified_lines,
+      int modified_count,
+      const DiffsDiffOptions* options
+    );
+
+    void free_lines_diff(DiffsLinesDiff* diff);
+  ]])
+
+  local ok, handle = pcall(ffi.load, path)
+  if not ok then
+    dbg('failed to load libvscode_diff: %s', handle)
+    return nil
+  end
+
+  cached_handle = handle
+  return handle
+end
+
+---@param callback fun(handle: table?)
+function M.ensure(callback)
+  if cached_handle then
+    callback(cached_handle)
+    return
+  end
+
+  if M.has_lib() then
+    callback(M.load())
+    return
+  end
+
+  if download_in_progress then
+    dbg('download already in progress')
+    callback(nil)
+    return
+  end
+
+  download_in_progress = true
+
+  local dir = lib_dir()
+  vim.fn.mkdir(dir, 'p')
+
+  local os_name = get_os()
+  local arch = get_arch()
+  local ext = get_ext()
+  local filename = ('libvscode_diff_%s_%s_%s.%s'):format(os_name, arch, EXPECTED_VERSION, ext)
+  local url = ('https://github.com/esmuellert/vscode-diff.nvim/releases/download/v%s/%s'):format(
+    EXPECTED_VERSION,
+    filename
+  )
+
+  local dest = lib_path()
+  vim.notify('[diffs] downloading libvscode_diff...', vim.log.levels.INFO)
+
+  local cmd = { 'curl', '-fSL', '-o', dest, url }
+
+  vim.system(cmd, {}, function(result)
+    download_in_progress = false
+    vim.schedule(function()
+      if result.code ~= 0 then
+        vim.notify('[diffs] failed to download libvscode_diff', vim.log.levels.WARN)
+        dbg('curl failed: %s', result.stderr or '')
+        callback(nil)
+        return
+      end
+
+      local f = io.open(version_path(), 'w')
+      if f then
+        f:write(EXPECTED_VERSION)
+        f:close()
+      end
+
+      vim.notify('[diffs] libvscode_diff downloaded', vim.log.levels.INFO)
+      callback(M.load())
+    end)
+  end)
+end
+
+return M
diff --git a/spec/diff_spec.lua b/spec/diff_spec.lua
new file mode 100644
index 0000000..80ad8a8
--- /dev/null
+++ b/spec/diff_spec.lua
@@ -0,0 +1,163 @@
+require('spec.helpers')
+local diff = require('diffs.diff')
+
+describe('diff', function()
+  describe('extract_change_groups', function()
+    it('returns empty for all context lines', function()
+      local groups = diff.extract_change_groups({ ' line1', ' line2', ' line3' })
+      assert.are.equal(0, #groups)
+    end)
+
+    it('returns empty for pure additions', function()
+      local groups = diff.extract_change_groups({ '+line1', '+line2' })
+      assert.are.equal(0, #groups)
+    end)
+
+    it('returns empty for pure deletions', function()
+      local groups = diff.extract_change_groups({ '-line1', '-line2' })
+      assert.are.equal(0, #groups)
+    end)
+
+    it('extracts single change group', function()
+      local groups = diff.extract_change_groups({
+        ' context',
+        '-old line',
+        '+new line',
+        ' context',
+      })
+      assert.are.equal(1, #groups)
+      assert.are.equal(1, #groups[1].del_lines)
+      assert.are.equal(1, #groups[1].add_lines)
+      assert.are.equal('old line', groups[1].del_lines[1].text)
+      assert.are.equal('new line', groups[1].add_lines[1].text)
+    end)
+
+    it('extracts multiple change groups separated by context', function()
+      local groups = diff.extract_change_groups({
+        '-old1',
+        '+new1',
+        ' context',
+        '-old2',
+        '+new2',
+      })
+      assert.are.equal(2, #groups)
+      assert.are.equal('old1', groups[1].del_lines[1].text)
+      assert.are.equal('new1', groups[1].add_lines[1].text)
+      assert.are.equal('old2', groups[2].del_lines[1].text)
+      assert.are.equal('new2', groups[2].add_lines[1].text)
+    end)
+
+    it('tracks correct line indices', function()
+      local groups = diff.extract_change_groups({
+        ' context',
+        '-deleted',
+        '+added',
+      })
+      assert.are.equal(2, groups[1].del_lines[1].idx)
+      assert.are.equal(3, groups[1].add_lines[1].idx)
+    end)
+
+    it('handles multiple del lines followed by multiple add lines', function()
+      local groups = diff.extract_change_groups({
+        '-del1',
+        '-del2',
+        '+add1',
+        '+add2',
+        '+add3',
+      })
+      assert.are.equal(1, #groups)
+      assert.are.equal(2, #groups[1].del_lines)
+      assert.are.equal(3, #groups[1].add_lines)
+    end)
+  end)
+
+  describe('compute_intra_hunks', function()
+    it('returns nil for all-addition hunks', function()
+      local result = diff.compute_intra_hunks({ '+line1', '+line2' }, 'native')
+      assert.is_nil(result)
+    end)
+
+    it('returns nil for all-deletion hunks', function()
+      local result = diff.compute_intra_hunks({ '-line1', '-line2' }, 'native')
+      assert.is_nil(result)
+    end)
+
+    it('returns nil for context-only hunks', function()
+      local result = diff.compute_intra_hunks({ ' line1', ' line2' }, 'native')
+      assert.is_nil(result)
+    end)
+
+    it('returns spans for single word change', function()
+      local result = diff.compute_intra_hunks({
+        '-local x = 1',
+        '+local x = 2',
+      }, 'native')
+      assert.is_not_nil(result)
+      assert.is_true(#result.del_spans > 0)
+      assert.is_true(#result.add_spans > 0)
+    end)
+
+    it('identifies correct byte offsets for word change', function()
+      local result = diff.compute_intra_hunks({
+        '-local x = 1',
+        '+local x = 2',
+      }, 'native')
+      assert.is_not_nil(result)
+
+      assert.are.equal(1, #result.del_spans)
+      assert.are.equal(1, #result.add_spans)
+      local del_span = result.del_spans[1]
+      local add_span = result.add_spans[1]
+      local del_text = ('local x = 1'):sub(del_span.col_start, del_span.col_end - 1)
+      local add_text = ('local x = 2'):sub(add_span.col_start, add_span.col_end - 1)
+      assert.are.equal('1', del_text)
+      assert.are.equal('2', add_text)
+    end)
+
+    it('handles multiple change groups separated by context', function()
+      local result = diff.compute_intra_hunks({
+        '-local a = 1',
+        '+local a = 2',
+        ' local b = 3',
+        '-local c = 4',
+        '+local c = 5',
+      }, 'native')
+      assert.is_not_nil(result)
+      assert.is_true(#result.del_spans >= 2)
+      assert.is_true(#result.add_spans >= 2)
+    end)
+
+    it('handles uneven line counts (2 old, 1 new)', function()
+      local result = diff.compute_intra_hunks({
+        '-line one',
+        '-line two',
+        '+line combined',
+      }, 'native')
+      assert.is_not_nil(result)
+    end)
+
+    it('handles multi-byte UTF-8 content', function()
+      local result = diff.compute_intra_hunks({
+        '-local x = "héllo"',
+        '+local x = "wörld"',
+      }, 'native')
+      assert.is_not_nil(result)
+      assert.is_true(#result.del_spans > 0)
+      assert.is_true(#result.add_spans > 0)
+    end)
+
+    it('returns nil when del and add are identical', function()
+      local result = diff.compute_intra_hunks({
+        '-local x = 1',
+        '+local x = 1',
+      }, 'native')
+      assert.is_nil(result)
+    end)
+  end)
+
+  describe('has_vscode', function()
+    it('returns false in test environment', function()
+      assert.is_false(diff.has_vscode())
+    end)
+  end)
+end)