diff --git a/crates/edit_prediction/src/edit_prediction.rs b/crates/edit_prediction/src/edit_prediction.rs
index da2392d757675bb1993d2dacdf963fe24aa91430..bd1bc7a3303a6f80094fd8261e90a2c5e113803d 100644
--- a/crates/edit_prediction/src/edit_prediction.rs
+++ b/crates/edit_prediction/src/edit_prediction.rs
@@ -102,6 +102,7 @@ actions!(
 /// Maximum number of events to track.
 const EVENT_COUNT_MAX: usize = 10;
 const CHANGE_GROUPING_LINE_SPAN: u32 = 8;
+const EDIT_HISTORY_DIFF_SIZE_LIMIT: usize = 2048 * 3; // ~2048 tokens or ~50% of typical prompt budget
 const COLLABORATOR_EDIT_LOCALITY_CONTEXT_TOKENS: usize = 512;
 const LAST_CHANGE_GROUPING_TIME: Duration = Duration::from_secs(1);
 const ZED_PREDICT_DATA_COLLECTION_CHOICE: &str = "zed_predict_data_collection_choice";
@@ -724,6 +725,12 @@ fn compute_diff_between_snapshots_in_range(
     let old_edit_range = old_start_line_offset..old_end_line_offset;
     let new_edit_range = new_start_line_offset..new_end_line_offset;
 
+    if new_edit_range.len() > EDIT_HISTORY_DIFF_SIZE_LIMIT
+        || old_edit_range.len() > EDIT_HISTORY_DIFF_SIZE_LIMIT
+    {
+        return None;
+    }
+
     let old_region_text: String = old_snapshot.text_for_range(old_edit_range).collect();
     let new_region_text: String = new_snapshot.text_for_range(new_edit_range).collect();
 
@@ -1410,8 +1417,24 @@ impl EditPredictionStore {
             return;
         }
 
+        let is_recordable_history_edit =
+            compute_diff_between_snapshots_in_range(&old_snapshot, &new_snapshot, &edit_range)
+                .is_some();
+
         let events = &mut project_state.events;
 
+        if !is_recordable_history_edit {
+            if let Some(event) = project_state.last_event.take() {
+                if let Some(event) = event.finalize(&project_state.license_detection_watchers, cx) {
+                    if events.len() + 1 >= EVENT_COUNT_MAX {
+                        events.pop_front();
+                    }
+                    events.push_back(event);
+                }
+            }
+            return;
+        }
+
         if let Some(last_event) = project_state.last_event.as_mut() {
             let is_next_snapshot_of_same_buffer = old_snapshot.remote_id()
                 == last_event.new_snapshot.remote_id()
diff --git a/crates/edit_prediction/src/edit_prediction_tests.rs b/crates/edit_prediction/src/edit_prediction_tests.rs
index 257dd255cbb6ae3a2ddb02019e56886d41676de2..7583ba629bc2c490c5f8e8dd83218c200025fe7c 100644
--- a/crates/edit_prediction/src/edit_prediction_tests.rs
+++ b/crates/edit_prediction/src/edit_prediction_tests.rs
@@ -1012,6 +1012,81 @@ async fn test_irrelevant_collaborator_edits_in_different_files_are_omitted_from_
     assert!(events.is_empty());
 }
 
+#[gpui::test]
+async fn test_large_edits_are_omitted_from_history(cx: &mut TestAppContext) {
+    let (ep_store, _requests) = init_test_with_fake_client(cx);
+    let fs = FakeFs::new(cx.executor());
+    fs.insert_tree(
+        "/root",
+        json!({
+            "foo.rs": (0..20)
+                .map(|i| format!("line {i}\n"))
+                .collect::<String>()
+        }),
+    )
+    .await;
+    let project = Project::test(fs, vec![path!("/root").as_ref()], cx).await;
+
+    let buffer = project
+        .update(cx, |project, cx| {
+            let path = project.find_project_path(path!("root/foo.rs"), cx).unwrap();
+            project.set_active_path(Some(path.clone()), cx);
+            project.open_buffer(path, cx)
+        })
+        .await
+        .unwrap();
+
+    let cursor = buffer.read_with(cx, |buffer, _cx| buffer.anchor_before(Point::new(1, 0)));
+
+    ep_store.update(cx, |ep_store, cx| {
+        ep_store.register_buffer(&buffer, &project, cx);
+        let _ = ep_store.prediction_at(&buffer, Some(cursor), &project, cx);
+    });
+
+    buffer.update(cx, |buffer, cx| {
+        buffer.edit(vec![(0..6, "LOCAL ZERO")], None, cx);
+    });
+
+    let (collaborator, mut collaborator_version) = make_collaborator_replica(&buffer, cx);
+
+    let (line_three_start, line_three_len) = collaborator.read_with(cx, |buffer, _cx| {
+        (Point::new(3, 0).to_offset(buffer), buffer.line_len(3))
+    });
+    let large_edit = "X".repeat(EDIT_HISTORY_DIFF_SIZE_LIMIT + 1);
+
+    apply_collaborator_edit(
+        &collaborator,
+        &buffer,
+        &mut collaborator_version,
+        line_three_start..line_three_start + line_three_len as usize,
+        &large_edit,
+        cx,
+    )
+    .await;
+
+    buffer.update(cx, |buffer, cx| {
+        let line_seven_start = Point::new(7, 0).to_offset(buffer);
+        let line_seven_end = Point::new(7, 6).to_offset(buffer);
+        buffer.edit(
+            vec![(line_seven_start..line_seven_end, "LOCAL SEVEN")],
+            None,
+            cx,
+        );
+    });
+
+    let events = ep_store.update(cx, |ep_store, cx| {
+        ep_store.edit_history_for_project(&project, cx)
+    });
+
+    let rendered_events = render_events_with_predicted(&events);
+
+    assert_eq!(rendered_events.len(), 2);
+    assert!(rendered_events[0].contains("+LOCAL ZERO"));
+    assert!(!rendered_events[0].contains(&large_edit));
+    assert!(rendered_events[1].contains("+LOCAL SEVEN"));
+    assert!(!rendered_events[1].contains(&large_edit));
+}
+
 #[gpui::test]
 async fn test_predicted_flag_coalescing(cx: &mut TestAppContext) {
     let (ep_store, _requests) = init_test_with_fake_client(cx);