diff --git a/src/libostree/ostree-repo-file.h b/src/libostree/ostree-repo-file.h
index 20749655..904a80a5 100644
--- a/src/libostree/ostree-repo-file.h
+++ b/src/libostree/ostree-repo-file.h
@@ -30,8 +30,8 @@ G_BEGIN_DECLS
 #define OSTREE_TYPE_REPO_FILE         (_ostree_repo_file_get_type ())
 #define OSTREE_REPO_FILE(o)           (G_TYPE_CHECK_INSTANCE_CAST ((o), OSTREE_TYPE_REPO_FILE, OstreeRepoFile))
 #define OSTREE_REPO_FILE_CLASS(k)     (G_TYPE_CHECK_CLASS_CAST((k), OSTREE_TYPE_REPO_FILE, OstreeRepoFileClass))
-#define OSTREE_IS_LOCAL_FILE(o)        (G_TYPE_CHECK_INSTANCE_TYPE ((o), OSTREE_TYPE_REPO_FILE))
-#define OSTREE_IS_LOCAL_FILE_CLASS(k)  (G_TYPE_CHECK_CLASS_TYPE ((k), OSTREE_TYPE_REPO_FILE))
+#define OSTREE_IS_REPO_FILE(o)        (G_TYPE_CHECK_INSTANCE_TYPE ((o), OSTREE_TYPE_REPO_FILE))
+#define OSTREE_IS_REPO_FILE_CLASS(k)  (G_TYPE_CHECK_CLASS_TYPE ((k), OSTREE_TYPE_REPO_FILE))
 #define OSTREE_REPO_FILE_GET_CLASS(o) (G_TYPE_INSTANCE_GET_CLASS ((o), OSTREE_TYPE_REPO_FILE, OstreeRepoFileClass))
 
 typedef struct _OstreeRepoFile        OstreeRepoFile;
diff --git a/src/libostree/ostree-repo.c b/src/libostree/ostree-repo.c
index 2bdb56dc..f71dfe56 100644
--- a/src/libostree/ostree-repo.c
+++ b/src/libostree/ostree-repo.c
@@ -1846,9 +1846,350 @@ ostree_repo_checkout (OstreeRepo *self,
   return ret;
 }
 
+static gboolean
+get_file_checksum (GFile  *f,
+                   char  **out_checksum,
+                   GCancellable *cancellable,
+                   GError   **error)
+{
+  gboolean ret = FALSE;
+  GChecksum *tmp_checksum = NULL;
+  char *ret_checksum = NULL;
+  struct stat stbuf;
+
+  if (OSTREE_IS_REPO_FILE (f))
+    {
+      ret_checksum = g_strdup (_ostree_repo_file_nontree_get_checksum ((OstreeRepoFile*)f));
+    }
+  else
+    {
+      if (!ostree_stat_and_checksum_file (-1, ot_gfile_get_path_cached (f),
+                                          OSTREE_OBJECT_TYPE_FILE,
+                                          &tmp_checksum, &stbuf, error))
+        goto out;
+      ret_checksum = g_strdup (g_checksum_get_string (tmp_checksum));
+    }
+
+  ret = TRUE;
+  *out_checksum = ret_checksum;
+  ret_checksum = NULL;
+ out:
+  g_free (ret_checksum);
+  if (tmp_checksum)
+    g_checksum_free (tmp_checksum);
+  return ret;
+}
+
+OstreeRepoDiffItem *
+ostree_repo_diff_item_ref (OstreeRepoDiffItem *diffitem)
+{
+  g_atomic_int_inc (&diffitem->refcount);
+  return diffitem;
+}
+
+void
+ostree_repo_diff_item_unref (OstreeRepoDiffItem *diffitem)
+{
+  if (!g_atomic_int_dec_and_test (&diffitem->refcount))
+    return;
+
+  g_clear_object (&diffitem->src);
+  g_clear_object (&diffitem->target);
+  g_clear_object (&diffitem->src_info);
+  g_clear_object (&diffitem->target_info);
+  g_free (diffitem->src_checksum);
+  g_free (diffitem->target_checksum);
+  g_free (diffitem);
+}
+
+static OstreeRepoDiffItem *
+diff_item_new (GFile          *a,
+               GFileInfo      *a_info,
+               GFile          *b,
+               GFileInfo      *b_info,
+               char           *checksum_a,
+               char           *checksum_b)
+{
+  OstreeRepoDiffItem *ret = g_new0 (OstreeRepoDiffItem, 1);
+  ret->refcount = 1;
+  ret->src = a ? g_object_ref (a) : NULL;
+  ret->src_info = a_info ? g_object_ref (a_info) : NULL;
+  ret->target = b ? g_object_ref (b) : NULL;
+  ret->target_info = b_info ? g_object_ref (b_info) : b_info;
+  ret->src_checksum = g_strdup (checksum_a);
+  ret->target_checksum = g_strdup (checksum_b);
+  return ret;
+}
+               
+
+static gboolean
+diff_files (GFile          *a,
+            GFileInfo      *a_info,
+            GFile          *b,
+            GFileInfo      *b_info,
+            OstreeRepoDiffItem **out_item,
+            GCancellable   *cancellable,
+            GError        **error)
+{
+  gboolean ret = FALSE;
+  char *checksum_a = NULL;
+  char *checksum_b = NULL;
+  OstreeRepoDiffItem *ret_item = NULL;
+
+  if (!get_file_checksum (a, &checksum_a, cancellable, error))
+    goto out;
+  if (!get_file_checksum (b, &checksum_b, cancellable, error))
+    goto out;
+
+  if (strcmp (checksum_a, checksum_b) != 0)
+    {
+      ret_item = diff_item_new (a, a_info, b, b_info,
+                                checksum_a, checksum_b);
+    }
+
+  ret = TRUE;
+  *out_item = ret_item;
+  ret_item = NULL;
+ out:
+  if (ret_item)
+    ostree_repo_diff_item_unref (ret_item);
+  g_free (checksum_a);
+  g_free (checksum_b);
+  return ret;
+}
+
+static gboolean
+diff_add_dir_recurse (GFile          *d,
+                      GPtrArray      *added,
+                      GCancellable   *cancellable,
+                      GError        **error)
+{
+  gboolean ret = FALSE;
+  GFileEnumerator *dir_enum = NULL;
+  GError *temp_error = NULL;
+  GFile *child = NULL;
+  GFileInfo *child_info = NULL;
+
+  dir_enum = g_file_enumerate_children (d, OSTREE_GIO_FAST_QUERYINFO, 
+                                        G_FILE_QUERY_INFO_NOFOLLOW_SYMLINKS,
+                                        cancellable, 
+                                        error);
+  if (!dir_enum)
+    goto out;
+
+  while ((child_info = g_file_enumerator_next_file (dir_enum, cancellable, &temp_error)) != NULL)
+    {
+      const char *name;
+
+      name = g_file_info_get_name (child_info);
+
+      g_clear_object (&child);
+      child = g_file_get_child (d, name);
+
+      g_ptr_array_add (added, g_object_ref (child));
+
+      if (g_file_info_get_file_type (child_info) == G_FILE_TYPE_DIRECTORY)
+        {
+          if (!diff_add_dir_recurse (child, added, cancellable, error))
+            goto out;
+        }
+      
+      g_clear_object (&child_info);
+    }
+  if (temp_error != NULL)
+    {
+      g_propagate_error (error, temp_error);
+      goto out;
+    }
+
+  ret = TRUE;
+ out:
+  g_clear_object (&child_info);
+  g_clear_object (&child);
+  g_clear_object (&dir_enum);
+  return ret;
+}
+
+static gboolean
+diff_dirs (GFile          *a,
+           GFile          *b,
+           GPtrArray      *modified,
+           GPtrArray      *removed,
+           GPtrArray      *added,
+           GCancellable   *cancellable,
+           GError        **error)
+{
+  gboolean ret = FALSE;
+  GFileEnumerator *dir_enum = NULL;
+  GError *temp_error = NULL;
+  GFile *child_a = NULL;
+  GFile *child_b = NULL;
+  GFileInfo *child_a_info = NULL;
+  GFileInfo *child_b_info = NULL;
+
+  dir_enum = g_file_enumerate_children (a, OSTREE_GIO_FAST_QUERYINFO, 
+                                        G_FILE_QUERY_INFO_NOFOLLOW_SYMLINKS,
+                                        cancellable, 
+                                        error);
+  if (!dir_enum)
+    goto out;
+
+  while ((child_a_info = g_file_enumerator_next_file (dir_enum, cancellable, &temp_error)) != NULL)
+    {
+      const char *name;
+      GFileType child_a_type;
+      GFileType child_b_type;
+
+      name = g_file_info_get_name (child_a_info);
+
+      g_clear_object (&child_a);
+      child_a = g_file_get_child (a, name);
+      child_a_type = g_file_info_get_file_type (child_a_info);
+
+      g_clear_object (&child_b);
+      child_b = g_file_get_child (b, name);
+
+      g_clear_object (&child_b_info);
+      child_b_info = g_file_query_info (child_b, OSTREE_GIO_FAST_QUERYINFO,
+                                        G_FILE_QUERY_INFO_NOFOLLOW_SYMLINKS,
+                                        cancellable,
+                                        &temp_error);
+      if (!child_b_info)
+        {
+          if (g_error_matches (temp_error, G_IO_ERROR, G_IO_ERROR_NOT_FOUND))
+            {
+              g_clear_error (&temp_error);
+              g_ptr_array_add (removed, g_object_ref (child_a));
+            }
+          else
+            {
+              g_propagate_error (error, temp_error);
+              goto out;
+            }
+        }
+      else
+        {
+          child_b_type = g_file_info_get_file_type (child_b_info);
+          if (child_a_type != child_b_type)
+            {
+              g_ptr_array_add (modified, g_object_ref (child_a));
+            }
+          else if (child_a_type == G_FILE_TYPE_DIRECTORY)
+            {
+              if (!diff_dirs (child_a, child_b, modified,
+                              removed, added, cancellable, error))
+                goto out;
+            }
+          else
+            {
+              OstreeRepoDiffItem *diff_item = NULL;
+
+              if (!diff_files (child_a, child_a_info, child_b, child_b_info, &diff_item, cancellable, error))
+                goto out;
+              
+              if (diff_item)
+                g_ptr_array_add (modified, diff_item); /* Transfer ownership */
+            }
+        }
+      
+      g_clear_object (&child_a_info);
+    }
+  if (temp_error != NULL)
+    {
+      g_propagate_error (error, temp_error);
+      goto out;
+    }
+
+  g_clear_object (&dir_enum);
+  dir_enum = g_file_enumerate_children (b, OSTREE_GIO_FAST_QUERYINFO, 
+                                        G_FILE_QUERY_INFO_NOFOLLOW_SYMLINKS,
+                                        cancellable, 
+                                        error);
+  if (!dir_enum)
+    goto out;
+
+  while ((child_b_info = g_file_enumerator_next_file (dir_enum, cancellable, &temp_error)) != NULL)
+    {
+      const char *name;
+
+      name = g_file_info_get_name (child_b_info);
+
+      g_clear_object (&child_a);
+      child_a = g_file_get_child (a, name);
+
+      g_clear_object (&child_b);
+      child_b = g_file_get_child (b, name);
+
+      g_clear_object (&child_a_info);
+      child_a_info = g_file_query_info (child_a, OSTREE_GIO_FAST_QUERYINFO,
+                                        G_FILE_QUERY_INFO_NOFOLLOW_SYMLINKS,
+                                        cancellable,
+                                        &temp_error);
+      if (!child_a_info)
+        {
+          if (g_error_matches (temp_error, G_IO_ERROR, G_IO_ERROR_NOT_FOUND))
+            {
+              g_clear_error (&temp_error);
+              g_ptr_array_add (added, g_object_ref (child_b));
+              if (g_file_info_get_file_type (child_b_info) == G_FILE_TYPE_DIRECTORY)
+                {
+                  if (!diff_add_dir_recurse (child_b, added, cancellable, error))
+                    goto out;
+                }
+            }
+          else
+            {
+              g_propagate_error (error, temp_error);
+              goto out;
+            }
+        }
+    }
+  if (temp_error != NULL)
+    {
+      g_propagate_error (error, temp_error);
+      goto out;
+    }
+
+  ret = TRUE;
+ out:
+  g_clear_object (&dir_enum);
+  g_clear_object (&child_a_info);
+  g_clear_object (&child_b_info);
+  g_clear_object (&child_a);
+  g_clear_object (&child_b);
+  return ret;
+}
+
+gboolean
+ostree_repo_read_commit (OstreeRepo *self,
+                         const char *rev, 
+                         GFile       **out_root,
+                         GCancellable *cancellable,
+                         GError **error)
+{
+  gboolean ret = FALSE;
+  GFile *ret_root = NULL;
+  char *resolved_rev = NULL;
+
+  if (!resolve_rev (self, rev, FALSE, &resolved_rev, error))
+    goto out;
+
+  ret_root = _ostree_repo_file_new_root (self, resolved_rev);
+  if (!_ostree_repo_file_ensure_resolved ((OstreeRepoFile*)ret_root, error))
+    goto out;
+
+  ret = TRUE;
+  *out_root = ret_root;
+  ret_root = NULL;
+ out:
+  g_free (resolved_rev);
+  g_clear_object (&ret_root);
+  return ret;
+}
+                       
 gboolean
 ostree_repo_diff (OstreeRepo     *self,
-                  const char     *ref,
+                  GFile          *src,
                   GFile          *target,
                   GPtrArray     **out_modified,
                   GPtrArray     **out_removed,
@@ -1861,11 +2202,20 @@ ostree_repo_diff (OstreeRepo     *self,
   GPtrArray *ret_removed = NULL;
   GPtrArray *ret_added = NULL;
 
-  g_set_error (error, G_IO_ERROR, G_IO_ERROR_NOT_SUPPORTED,
-               "Not implemented yet");
-  goto out;
+  ret_modified = g_ptr_array_new_with_free_func ((GDestroyNotify)ostree_repo_diff_item_unref);
+  ret_removed = g_ptr_array_new_with_free_func ((GDestroyNotify)g_object_unref);
+  ret_added = g_ptr_array_new_with_free_func ((GDestroyNotify)g_object_unref);
+
+  if (!diff_dirs (src, target, ret_modified, ret_removed, ret_added, cancellable, error))
+    goto out;
 
   ret = TRUE;
+  *out_modified = ret_modified;
+  ret_modified = NULL;
+  *out_removed = ret_removed;
+  ret_removed = NULL;
+  *out_added = ret_added;
+  ret_added = NULL;
  out:
   if (ret_modified)
     g_ptr_array_free (ret_modified, TRUE);
diff --git a/src/libostree/ostree-repo.h b/src/libostree/ostree-repo.h
index 47a896e1..927fcae8 100644
--- a/src/libostree/ostree-repo.h
+++ b/src/libostree/ostree-repo.h
@@ -125,23 +125,30 @@ gboolean      ostree_repo_checkout (OstreeRepo *self,
                                     GCancellable   *cancellable,
                                     GError      **error);
 
+gboolean       ostree_repo_read_commit (OstreeRepo *self,
+                                        const char *rev,
+                                        GFile       **out_root,
+                                        GCancellable *cancellable,
+                                        GError  **error);
+
 typedef struct {
-  guint content_differs : 1;
-  guint xattrs_differs : 1;
-  guint unused : 30;
+  volatile gint refcount;
+
+  GFile *src;
+  GFile *target;
 
   GFileInfo *src_info;
   GFileInfo *target_info;
 
-  char *src_file_checksum;
-  char *target_file_checksum;
-
-  GVariant *src_xattrs;
-  GVariant *target_xattrs;
+  char *src_checksum;
+  char *target_checksum;
 } OstreeRepoDiffItem;
 
+OstreeRepoDiffItem *ostree_repo_diff_item_ref (OstreeRepoDiffItem *diffitem);
+void ostree_repo_diff_item_unref (OstreeRepoDiffItem *diffitem);
+
 gboolean      ostree_repo_diff (OstreeRepo     *self,
-                                const char     *ref,
+                                GFile          *src,
                                 GFile          *target,
                                 GPtrArray     **out_modified, /* OstreeRepoDiffItem */
                                 GPtrArray     **out_removed, /* OstreeRepoDiffItem */
diff --git a/src/ostree/ot-builtin-diff.c b/src/ostree/ot-builtin-diff.c
index 15344bf8..7c21ae2f 100644
--- a/src/ostree/ot-builtin-diff.c
+++ b/src/ostree/ot-builtin-diff.c
@@ -31,18 +31,50 @@ static GOptionEntry options[] = {
   { NULL }
 };
 
+static gboolean
+parse_file_or_commit (OstreeRepo  *repo,
+                      const char  *arg,
+                      GFile      **out_file,
+                      GCancellable *cancellable,
+                      GError     **error)
+{
+  gboolean ret = FALSE;
+  GFile *ret_file = NULL;
+
+  if (g_str_has_prefix (arg, "/")
+      || g_str_has_prefix (arg, "./"))
+    {
+      ret_file = ot_util_new_file_for_path (arg);
+    }
+  else
+    {
+      if (!ostree_repo_read_commit (repo, arg, &ret_file, cancellable, NULL))
+        goto out;
+    }
+
+  ret = TRUE;
+  *out_file = ret_file;
+  ret_file = NULL;
+ out:
+  g_clear_object (&ret_file);
+  return ret;
+}
+
 gboolean
 ostree_builtin_diff (int argc, char **argv, const char *repo_path, GError **error)
 {
   GOptionContext *context;
   gboolean ret = FALSE;
   OstreeRepo *repo = NULL;
+  const char *src;
   const char *target;
-  const char *rev;
+  GFile *srcf = NULL;
   GFile *targetf = NULL;
+  GFile *cwd = NULL;
   GPtrArray *modified = NULL;
   GPtrArray *removed = NULL;
   GPtrArray *added = NULL;
+  int i;
 
   context = g_option_context_new ("REV TARGETDIR - Compare directory TARGETDIR against revision REV");
   g_option_context_add_main_entries (context, options, NULL);
@@ -64,16 +96,47 @@ ostree_builtin_diff (int argc, char **argv, const char *repo_path, GError **erro
       goto out;
     }
 
-  rev = argv[1];
+  src = argv[1];
   target = argv[2];
-  targetf = ot_util_new_file_for_path (target);
-  
-  if (!ostree_repo_diff (repo, rev, targetf, &modified, &removed, &added, NULL, error))
+
+  cwd = ot_util_new_file_for_path (".");
+
+  if (!parse_file_or_commit (repo, src, &srcf, NULL, error))
     goto out;
+  if (!parse_file_or_commit (repo, target, &targetf, NULL, error))
+    goto out;
+  
+  if (!ostree_repo_diff (repo, srcf, targetf, &modified, &removed, &added, NULL, error))
+    goto out;
+
+  for (i = 0; i < modified->len; i++)
+    {
+      OstreeRepoDiffItem *diff = modified->pdata[i];
+      g_print ("M    %s\n", ot_gfile_get_path_cached (diff->src));
+    }
+  for (i = 0; i < removed->len; i++)
+    {
+      g_print ("D    %s\n", ot_gfile_get_path_cached (removed->pdata[i]));
+    }
+  for (i = 0; i < added->len; i++)
+    {
+      GFile *added_f = added->pdata[i];
+      if (g_file_is_native (added_f))
+        {
+          char *relpath = g_file_get_relative_path (cwd, added_f);
+          g_assert (relpath != NULL);
+          g_print ("A    %s\n", relpath);
+          g_free (relpath);
+        }
+      else
+        g_print ("A    %s\n", ot_gfile_get_path_cached (added_f));
+    }
 
   ret = TRUE;
  out:
   g_clear_object (&repo);
+  g_clear_object (&cwd);
+  g_clear_object (&srcf);
   g_clear_object (&targetf);
   if (modified)
     g_ptr_array_free (modified, TRUE);
diff --git a/tests/t0000-basic.sh b/tests/t0000-basic.sh
index 8b58dc90..52aaa7b4 100755
--- a/tests/t0000-basic.sh
+++ b/tests/t0000-basic.sh
@@ -19,7 +19,7 @@
 
 set -e
 
-echo "1..12"
+echo "1..13"
 
 . libtest.sh
 
@@ -83,6 +83,7 @@ echo 4 > four
 mkdir -p yet/another/tree
 echo leaf > yet/another/tree/green
 echo helloworld > yet/message
+rm a/5
 $OSTREE commit -b test2 -s "Current directory"
 echo "ok cwd commit"
 
@@ -93,6 +94,22 @@ assert_file_has_content yet/another/tree/green 'leaf'
 assert_file_has_content four '4'
 echo "ok cwd contents"
 
+cd ${test_tmpdir}
+$OSTREE diff test2^ test2 > diff-test2
+assert_file_has_content diff-test2 'D */a/5'
+assert_file_has_content diff-test2 'A */yet$'
+assert_file_has_content diff-test2 'A */yet/message$'
+assert_file_has_content diff-test2 'A */yet/another/tree/green$'
+echo "ok diff revisions"
+
+cd ${test_tmpdir}/checkout-test2-4
+echo afile > oh-look-a-file
+$OSTREE diff test2 ./ > ${test_tmpdir}/diff-test2-2
+rm oh-look-a-file
+cd ${test_tmpdir}
+assert_file_has_content diff-test2-2 'A */oh-look-a-file$'
+echo "ok diff cwd"
+
 cd ${test_tmpdir}/checkout-test2-4
 echo afile > oh-look-a-file
 cat > ${test_tmpdir}/ostree-commit-metadata <<EOF
@@ -107,3 +124,4 @@ $OSTREE show test2 > ${test_tmpdir}/show
 assert_file_has_content ${test_tmpdir}/show 'example.com'
 assert_file_has_content ${test_tmpdir}/show 'buildid'
 echo "ok metadata content"
+