diff --git a/crates/buffer_diff/src/buffer_diff.rs b/crates/buffer_diff/src/buffer_diff.rs
index 55de3f968bc1cc9ff5d640b0d3ca30221e413632..22525096d3cbca456aa114b5acc9b4239b570dda 100644
--- a/crates/buffer_diff/src/buffer_diff.rs
+++ b/crates/buffer_diff/src/buffer_diff.rs
@@ -2155,7 +2155,7 @@ mod tests {
         let range = diff_1.inner.compare(&empty_diff.inner, &buffer).unwrap();
         assert_eq!(range.to_point(&buffer), Point::new(0, 0)..Point::new(8, 0));
 
-        // Edit does not affect the diff.
+        // Edit does affects the diff because it recalculates word diffs.
         buffer.edit_via_marked_text(
             &"
                 one
@@ -2170,7 +2170,14 @@ mod tests {
             .unindent(),
         );
         let diff_2 = BufferDiffSnapshot::new_sync(buffer.clone(), base_text.clone(), cx);
-        assert_eq!(None, diff_2.inner.compare(&diff_1.inner, &buffer));
+        assert_eq!(
+            Point::new(4, 0)..Point::new(5, 0),
+            diff_2
+                .inner
+                .compare(&diff_1.inner, &buffer)
+                .unwrap()
+                .to_point(&buffer)
+        );
 
         // Edit turns a deletion hunk into a modification.
         buffer.edit_via_marked_text(
diff --git a/crates/language/src/text_diff.rs b/crates/language/src/text_diff.rs
index 1fb94b9f5e87015f317e3e88a963c06c7ea41b70..bc07ec73f0ad2c4738a2ca5f6ff955b53327acc3 100644
--- a/crates/language/src/text_diff.rs
+++ b/crates/language/src/text_diff.rs
@@ -48,7 +48,6 @@ pub fn text_diff(old_text: &str, new_text: &str) -> Vec<(Range<usize>, Arc<str>)
 ///
 /// Returns a tuple of (old_ranges, new_ranges) where each vector contains
 /// the byte ranges of changed words in the respective text.
-/// Whitespace-only changes are excluded from the results.
 pub fn word_diff_ranges(
     old_text: &str,
     new_text: &str,
@@ -62,23 +61,23 @@ pub fn word_diff_ranges(
     let mut new_ranges: Vec<Range<usize>> = Vec::new();
 
     diff_internal(&input, |old_byte_range, new_byte_range, _, _| {
-        for range in split_on_whitespace(old_text, &old_byte_range) {
+        if !old_byte_range.is_empty() {
             if let Some(last) = old_ranges.last_mut()
-                && last.end >= range.start
+                && last.end >= old_byte_range.start
             {
-                last.end = range.end;
+                last.end = old_byte_range.end;
             } else {
-                old_ranges.push(range);
+                old_ranges.push(old_byte_range);
             }
         }
 
-        for range in split_on_whitespace(new_text, &new_byte_range) {
+        if !new_byte_range.is_empty() {
             if let Some(last) = new_ranges.last_mut()
-                && last.end >= range.start
+                && last.end >= new_byte_range.start
             {
-                last.end = range.end;
+                last.end = new_byte_range.end;
             } else {
-                new_ranges.push(range);
+                new_ranges.push(new_byte_range);
             }
         }
     });
@@ -86,50 +85,6 @@ pub fn word_diff_ranges(
     (old_ranges, new_ranges)
 }
 
-fn split_on_whitespace(text: &str, range: &Range<usize>) -> Vec<Range<usize>> {
-    if range.is_empty() {
-        return Vec::new();
-    }
-
-    let slice = &text[range.clone()];
-    let mut ranges = Vec::new();
-    let mut offset = 0;
-
-    for line in slice.lines() {
-        let line_start = offset;
-        let line_end = line_start + line.len();
-        offset = line_end + 1;
-        let trimmed = line.trim();
-
-        if !trimmed.is_empty() {
-            let leading = line.len() - line.trim_start().len();
-            let trailing = line.len() - line.trim_end().len();
-            let trimmed_start = range.start + line_start + leading;
-            let trimmed_end = range.start + line_end - trailing;
-
-            let original_line_start = text[..range.start + line_start]
-                .rfind('\n')
-                .map(|i| i + 1)
-                .unwrap_or(0);
-            let original_line_end = text[range.start + line_start..]
-                .find('\n')
-                .map(|i| range.start + line_start + i)
-                .unwrap_or(text.len());
-            let original_line = &text[original_line_start..original_line_end];
-            let original_trimmed_start =
-                original_line_start + (original_line.len() - original_line.trim_start().len());
-            let original_trimmed_end =
-                original_line_end - (original_line.len() - original_line.trim_end().len());
-
-            if trimmed_start > original_trimmed_start || trimmed_end < original_trimmed_end {
-                ranges.push(trimmed_start..trimmed_end);
-            }
-        }
-    }
-
-    ranges
-}
-
 pub struct DiffOptions {
     pub language_scope: Option<LanguageScope>,
     pub max_word_diff_len: usize,
diff --git a/crates/multi_buffer/src/multi_buffer_tests.rs b/crates/multi_buffer/src/multi_buffer_tests.rs
index fc2edcac15be72c60309c5c386393ad83c387860..fb6dce079268e3dfed868a0c65c81bd12e226704 100644
--- a/crates/multi_buffer/src/multi_buffer_tests.rs
+++ b/crates/multi_buffer/src/multi_buffer_tests.rs
@@ -4480,6 +4480,19 @@ async fn test_word_diff_simple_replacement(cx: &mut TestAppContext) {
     assert_eq!(word_diffs, vec!["world", "bar", "WORLD", "BAR"]);
 }
 
+#[gpui::test]
+async fn test_word_diff_white_space(cx: &mut TestAppContext) {
+    let settings_store = cx.update(|cx| SettingsStore::test(cx));
+    cx.set_global(settings_store);
+
+    let base_text = "hello world foo bar\n";
+    let modified_text = "    hello world foo bar\n";
+
+    let word_diffs = collect_word_diffs(base_text, modified_text, cx);
+
+    assert_eq!(word_diffs, vec!["    "]);
+}
+
 #[gpui::test]
 async fn test_word_diff_consecutive_modified_lines(cx: &mut TestAppContext) {
     let settings_store = cx.update(|cx| SettingsStore::test(cx));