diff --git a/src/diff.c b/src/diff.c
index ceb73a6..9fb8726 100644
--- a/src/diff.c
+++ b/src/diff.c
@@ -777,9 +777,14 @@
 		int	orig_len;
 		char_u	cbuf[MB_MAXBYTES + 1];
 
-		// xdiff doesn't support ignoring case, fold-case the text.
-		c = PTR2CHAR(s);
-		c = MB_CASEFOLD(c);
+		if (*s == NL)
+		    c = NUL;
+		else
+		{
+		    // xdiff doesn't support ignoring case, fold-case the text.
+		    c = PTR2CHAR(s);
+		    c = MB_CASEFOLD(c);
+		}
 		orig_len = mb_ptr2len(s);
 		if (mb_char2bytes(c, cbuf) != orig_len)
 		    // TODO: handle byte length difference
@@ -791,7 +796,10 @@
 		len += orig_len;
 	    }
 	    else
-		ptr[len++] = *s++;
+	    {
+		ptr[len++] = *s == NL ? NUL : *s;
+		s++;
+	    }
 	}
 	ptr[len++] = NL;
     }