diff --git a/xdiff/xdiff.h b/xdiff/xdiff.h
index 84fff583e2..d238c8263e 100644
--- a/xdiff/xdiff.h
+++ b/xdiff/xdiff.h
@@ -32,6 +32,7 @@ extern "C" {
 #define XDF_IGNORE_WHITESPACE (1 << 2)
 #define XDF_IGNORE_WHITESPACE_CHANGE (1 << 3)
 #define XDF_IGNORE_WHITESPACE_AT_EOL (1 << 4)
+#define XDF_PATIENCE_DIFF (1 << 5)
 #define XDF_WHITESPACE_FLAGS (XDF_IGNORE_WHITESPACE | XDF_IGNORE_WHITESPACE_CHANGE | XDF_IGNORE_WHITESPACE_AT_EOL)
 
 #define XDL_PATCH_NORMAL '-'
diff --git a/xdiff/xdiffi.c b/xdiff/xdiffi.c
index 9d0324a38c..3e97462bdd 100644
--- a/xdiff/xdiffi.c
+++ b/xdiff/xdiffi.c
@@ -329,6 +329,9 @@ int xdl_do_diff(mmfile_t *mf1, mmfile_t *mf2, xpparam_t const *xpp,
 	xdalgoenv_t xenv;
 	diffdata_t dd1, dd2;
 
+	if (xpp->flags & XDF_PATIENCE_DIFF)
+		return xdl_do_patience_diff(mf1, mf2, xpp, xe);
+
 	if (xdl_prepare_env(mf1, mf2, xpp, xe) < 0) {
 
 		return -1;
diff --git a/xdiff/xdiffi.h b/xdiff/xdiffi.h
index 3e099dc445..ad033a8e6a 100644
--- a/xdiff/xdiffi.h
+++ b/xdiff/xdiffi.h
@@ -55,5 +55,7 @@ int xdl_build_script(xdfenv_t *xe, xdchange_t **xscr);
 void xdl_free_script(xdchange_t *xscr);
 int xdl_emit_diff(xdfenv_t *xe, xdchange_t *xscr, xdemitcb_t *ecb,
 		  xdemitconf_t const *xecfg);
+int xdl_do_patience_diff(mmfile_t *mf1, mmfile_t *mf2, xpparam_t const *xpp,
+		xdfenv_t *env);
 
 #endif /* #if !defined(XDIFFI_H) */
diff --git a/xdiff/xpatience.c b/xdiff/xpatience.c
new file mode 100644
index 0000000000..e42c16a807
--- /dev/null
+++ b/xdiff/xpatience.c
@@ -0,0 +1,381 @@
+/*
+ *  LibXDiff by Davide Libenzi ( File Differential Library )
+ *  Copyright (C) 2003-2009 Davide Libenzi, Johannes E. Schindelin
+ *
+ *  This library is free software; you can redistribute it and/or
+ *  modify it under the terms of the GNU Lesser General Public
+ *  License as published by the Free Software Foundation; either
+ *  version 2.1 of the License, or (at your option) any later version.
+ *
+ *  This library is distributed in the hope that it will be useful,
+ *  but WITHOUT ANY WARRANTY; without even the implied warranty of
+ *  MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the GNU
+ *  Lesser General Public License for more details.
+ *
+ *  You should have received a copy of the GNU Lesser General Public
+ *  License along with this library; if not, write to the Free Software
+ *  Foundation, Inc., 59 Temple Place, Suite 330, Boston, MA  02111-1307  USA
+ *
+ *  Davide Libenzi <davidel@xmailserver.org>
+ *
+ */
+#include "xinclude.h"
+#include "xtypes.h"
+#include "xdiff.h"
+
+/*
+ * The basic idea of patience diff is to find lines that are unique in
+ * both files.  These are intuitively the ones that we want to see as
+ * common lines.
+ *
+ * The maximal ordered sequence of such line pairs (where ordered means
+ * that the order in the sequence agrees with the order of the lines in
+ * both files) naturally defines an initial set of common lines.
+ *
+ * Now, the algorithm tries to extend the set of common lines by growing
+ * the line ranges where the files have identical lines.
+ *
+ * Between those common lines, the patience diff algorithm is applied
+ * recursively, until no unique line pairs can be found; these line ranges
+ * are handled by the well-known Myers algorithm.
+ */
+
+#define NON_UNIQUE ULONG_MAX
+
+/*
+ * This is a hash mapping from line hash to line numbers in the first and
+ * second file.
+ */
+struct hashmap {
+	int nr, alloc;
+	struct entry {
+		unsigned long hash;
+		/*
+		 * 0 = unused entry, 1 = first line, 2 = second, etc.
+		 * line2 is NON_UNIQUE if the line is not unique
+		 * in either the first or the second file.
+		 */
+		unsigned long line1, line2;
+		/*
+		 * "next" & "previous" are used for the longest common
+		 * sequence;
+		 * initially, "next" reflects only the order in file1.
+		 */
+		struct entry *next, *previous;
+	} *entries, *first, *last;
+	/* were common records found? */
+	unsigned long has_matches;
+	mmfile_t *file1, *file2;
+	xdfenv_t *env;
+	xpparam_t const *xpp;
+};
+
+/* The argument "pass" is 1 for the first file, 2 for the second. */
+static void insert_record(int line, struct hashmap *map, int pass)
+{
+	xrecord_t **records = pass == 1 ?
+		map->env->xdf1.recs : map->env->xdf2.recs;
+	xrecord_t *record = records[line - 1], *other;
+	/*
+	 * After xdl_prepare_env() (or more precisely, due to
+	 * xdl_classify_record()), the "ha" member of the records (AKA lines)
+	 * is _not_ the hash anymore, but a linearized version of it.  In
+	 * other words, the "ha" member is guaranteed to start with 0 and
+	 * the second record's ha can only be 0 or 1, etc.
+	 *
+	 * So we multiply ha by 2 in the hope that the hashing was
+	 * "unique enough".
+	 */
+	int index = (int)((record->ha << 1) % map->alloc);
+
+	while (map->entries[index].line1) {
+		other = map->env->xdf1.recs[map->entries[index].line1 - 1];
+		if (map->entries[index].hash != record->ha ||
+				!xdl_recmatch(record->ptr, record->size,
+					other->ptr, other->size,
+					map->xpp->flags)) {
+			if (++index >= map->alloc)
+				index = 0;
+			continue;
+		}
+		if (pass == 2)
+			map->has_matches = 1;
+		if (pass == 1 || map->entries[index].line2)
+			map->entries[index].line2 = NON_UNIQUE;
+		else
+			map->entries[index].line2 = line;
+		return;
+	}
+	if (pass == 2)
+		return;
+	map->entries[index].line1 = line;
+	map->entries[index].hash = record->ha;
+	if (!map->first)
+		map->first = map->entries + index;
+	if (map->last) {
+		map->last->next = map->entries + index;
+		map->entries[index].previous = map->last;
+	}
+	map->last = map->entries + index;
+	map->nr++;
+}
+
+/*
+ * This function has to be called for each recursion into the inter-hunk
+ * parts, as previously non-unique lines can become unique when being
+ * restricted to a smaller part of the files.
+ *
+ * It is assumed that env has been prepared using xdl_prepare().
+ */
+static int fill_hashmap(mmfile_t *file1, mmfile_t *file2,
+		xpparam_t const *xpp, xdfenv_t *env,
+		struct hashmap *result,
+		int line1, int count1, int line2, int count2)
+{
+	result->file1 = file1;
+	result->file2 = file2;
+	result->xpp = xpp;
+	result->env = env;
+
+	/* We know exactly how large we want the hash map */
+	result->alloc = count1 * 2;
+	result->entries = (struct entry *)
+		xdl_malloc(result->alloc * sizeof(struct entry));
+	if (!result->entries)
+		return -1;
+	memset(result->entries, 0, result->alloc * sizeof(struct entry));
+
+	/* First, fill with entries from the first file */
+	while (count1--)
+		insert_record(line1++, result, 1);
+
+	/* Then search for matches in the second file */
+	while (count2--)
+		insert_record(line2++, result, 2);
+
+	return 0;
+}
+
+/*
+ * Find the longest sequence with a smaller last element (meaning a smaller
+ * line2, as we construct the sequence with entries ordered by line1).
+ */
+static int binary_search(struct entry **sequence, int longest,
+		struct entry *entry)
+{
+	int left = -1, right = longest;
+
+	while (left + 1 < right) {
+		int middle = (left + right) / 2;
+		/* by construction, no two entries can be equal */
+		if (sequence[middle]->line2 > entry->line2)
+			right = middle;
+		else
+			left = middle;
+	}
+	/* return the index in "sequence", _not_ the sequence length */
+	return left;
+}
+
+/*
+ * The idea is to start with the list of common unique lines sorted by
+ * the order in file1.  For each of these pairs, the longest (partial)
+ * sequence whose last element's line2 is smaller is determined.
+ *
+ * For efficiency, the sequences are kept in a list containing exactly one
+ * item per sequence length: the sequence with the smallest last
+ * element (in terms of line2).
+ */
+static struct entry *find_longest_common_sequence(struct hashmap *map)
+{
+	struct entry **sequence = xdl_malloc(map->nr * sizeof(struct entry *));
+	int longest = 0, i;
+	struct entry *entry;
+
+	for (entry = map->first; entry; entry = entry->next) {
+		if (!entry->line2 || entry->line2 == NON_UNIQUE)
+			continue;
+		i = binary_search(sequence, longest, entry);
+		entry->previous = i < 0 ? NULL : sequence[i];
+		sequence[++i] = entry;
+		if (i == longest)
+			longest++;
+	}
+
+	/* No common unique lines were found */
+	if (!longest) {
+		xdl_free(sequence);
+		return NULL;
+	}
+
+	/* Iterate starting at the last element, adjusting the "next" members */
+	entry = sequence[longest - 1];
+	entry->next = NULL;
+	while (entry->previous) {
+		entry->previous->next = entry;
+		entry = entry->previous;
+	}
+	xdl_free(sequence);
+	return entry;
+}
+
+static int match(struct hashmap *map, int line1, int line2)
+{
+	xrecord_t *record1 = map->env->xdf1.recs[line1 - 1];
+	xrecord_t *record2 = map->env->xdf2.recs[line2 - 1];
+	return xdl_recmatch(record1->ptr, record1->size,
+		record2->ptr, record2->size, map->xpp->flags);
+}
+
+static int patience_diff(mmfile_t *file1, mmfile_t *file2,
+		xpparam_t const *xpp, xdfenv_t *env,
+		int line1, int count1, int line2, int count2);
+
+static int walk_common_sequence(struct hashmap *map, struct entry *first,
+		int line1, int count1, int line2, int count2)
+{
+	int end1 = line1 + count1, end2 = line2 + count2;
+	int next1, next2;
+
+	for (;;) {
+		/* Try to grow the line ranges of common lines */
+		if (first) {
+			next1 = first->line1;
+			next2 = first->line2;
+			while (next1 > line1 && next2 > line2 &&
+					match(map, next1 - 1, next2 - 1)) {
+				next1--;
+				next2--;
+			}
+		} else {
+			next1 = end1;
+			next2 = end2;
+		}
+		while (line1 < next1 && line2 < next2 &&
+				match(map, line1, line2)) {
+			line1++;
+			line2++;
+		}
+
+		/* Recurse */
+		if (next1 > line1 || next2 > line2) {
+			struct hashmap submap;
+
+			memset(&submap, 0, sizeof(submap));
+			if (patience_diff(map->file1, map->file2,
+					map->xpp, map->env,
+					line1, next1 - line1,
+					line2, next2 - line2))
+				return -1;
+		}
+
+		if (!first)
+			return 0;
+
+		while (first->next &&
+				first->next->line1 == first->line1 + 1 &&
+				first->next->line2 == first->line2 + 1)
+			first = first->next;
+
+		line1 = first->line1 + 1;
+		line2 = first->line2 + 1;
+
+		first = first->next;
+	}
+}
+
+static int fall_back_to_classic_diff(struct hashmap *map,
+		int line1, int count1, int line2, int count2)
+{
+	/*
+	 * This probably does not work outside Git, since
+	 * we have a very simple mmfile structure.
+	 *
+	 * Note: ideally, we would reuse the prepared environment, but
+	 * the libxdiff interface does not (yet) allow for diffing only
+	 * ranges of lines instead of the whole files.
+	 */
+	mmfile_t subfile1, subfile2;
+	xpparam_t xpp;
+	xdfenv_t env;
+
+	subfile1.ptr = (char *)map->env->xdf1.recs[line1 - 1]->ptr;
+	subfile1.size = map->env->xdf1.recs[line1 + count1 - 2]->ptr +
+		map->env->xdf1.recs[line1 + count1 - 2]->size - subfile1.ptr;
+	subfile2.ptr = (char *)map->env->xdf2.recs[line2 - 1]->ptr;
+	subfile2.size = map->env->xdf2.recs[line2 + count2 - 2]->ptr +
+		map->env->xdf2.recs[line2 + count2 - 2]->size - subfile2.ptr;
+	xpp.flags = map->xpp->flags & ~XDF_PATIENCE_DIFF;
+	if (xdl_do_diff(&subfile1, &subfile2, &xpp, &env) < 0)
+		return -1;
+
+	memcpy(map->env->xdf1.rchg + line1 - 1, env.xdf1.rchg, count1);
+	memcpy(map->env->xdf2.rchg + line2 - 1, env.xdf2.rchg, count2);
+
+	xdl_free_env(&env);
+
+	return 0;
+}
+
+/*
+ * Recursively find the longest common sequence of unique lines,
+ * and if none was found, ask xdl_do_diff() to do the job.
+ *
+ * This function assumes that env was prepared with xdl_prepare_env().
+ */
+static int patience_diff(mmfile_t *file1, mmfile_t *file2,
+		xpparam_t const *xpp, xdfenv_t *env,
+		int line1, int count1, int line2, int count2)
+{
+	struct hashmap map;
+	struct entry *first;
+	int result = 0;
+
+	/* trivial case: one side is empty */
+	if (!count1) {
+		while(count2--)
+			env->xdf2.rchg[line2++ - 1] = 1;
+		return 0;
+	} else if (!count2) {
+		while(count1--)
+			env->xdf1.rchg[line1++ - 1] = 1;
+		return 0;
+	}
+
+	memset(&map, 0, sizeof(map));
+	if (fill_hashmap(file1, file2, xpp, env, &map,
+			line1, count1, line2, count2))
+		return -1;
+
+	/* are there any matching lines at all? */
+	if (!map.has_matches) {
+		while(count1--)
+			env->xdf1.rchg[line1++ - 1] = 1;
+		while(count2--)
+			env->xdf2.rchg[line2++ - 1] = 1;
+		xdl_free(map.entries);
+		return 0;
+	}
+
+	first = find_longest_common_sequence(&map);
+	if (first)
+		result = walk_common_sequence(&map, first,
+			line1, count1, line2, count2);
+	else
+		result = fall_back_to_classic_diff(&map,
+			line1, count1, line2, count2);
+
+	xdl_free(map.entries);
+	return result;
+}
+
+int xdl_do_patience_diff(mmfile_t *file1, mmfile_t *file2,
+		xpparam_t const *xpp, xdfenv_t *env)
+{
+	if (xdl_prepare_env(file1, file2, xpp, env) < 0)
+		return -1;
+
+	/* environment is cleaned up in xdl_diff() */
+	return patience_diff(file1, file2, xpp, env,
+			1, env->xdf1.nrec, 1, env->xdf2.nrec);
+}
diff --git a/xdiff/xprepare.c b/xdiff/xprepare.c
index a43aa72cd0..1689085235 100644
--- a/xdiff/xprepare.c
+++ b/xdiff/xprepare.c
@@ -290,7 +290,8 @@ int xdl_prepare_env(mmfile_t *mf1, mmfile_t *mf2, xpparam_t const *xpp,
 
 	xdl_free_classifier(&cf);
 
-	if (xdl_optimize_ctxs(&xe->xdf1, &xe->xdf2) < 0) {
+	if (!(xpp->flags & XDF_PATIENCE_DIFF) &&
+			xdl_optimize_ctxs(&xe->xdf1, &xe->xdf2) < 0) {
 
 		xdl_free_ctx(&xe->xdf2);
 		xdl_free_ctx(&xe->xdf1);