diff --git a/src/drawline.c b/src/drawline.c
index 0e090f4..79b187f 100644
--- a/src/drawline.c
+++ b/src/drawline.c
@@ -2206,11 +2206,13 @@
 #ifdef FEAT_DIFF
 	    if (wlv.diff_hlf != (hlf_T)0)
 	    {
+		// When there is extra text (e.g. virtual text) it gets the
+		// diff highlighting for the line, but not for changed text.
 		if (wlv.diff_hlf == HLF_CHD && ptr - line >= change_start
 							   && wlv.n_extra == 0)
 		    wlv.diff_hlf = HLF_TXD;		// changed text
-		if (wlv.diff_hlf == HLF_TXD && ptr - line > change_end
-							   && wlv.n_extra == 0)
+		if (wlv.diff_hlf == HLF_TXD && (ptr - line > change_end
+							   || wlv.n_extra > 0))
 		    wlv.diff_hlf = HLF_CHD;		// changed line
 		wlv.line_attr = HL_ATTR(wlv.diff_hlf);
 		if (wp->w_p_cul && lnum == wp->w_cursor.lnum
diff --git a/src/testdir/dumps/Test_prop_diff_mode_1.dump b/src/testdir/dumps/Test_prop_diff_mode_1.dump
new file mode 100644
index 0000000..069c08d
--- /dev/null
+++ b/src/testdir/dumps/Test_prop_diff_mode_1.dump
@@ -0,0 +1,10 @@
+>0+0&#ffd7ff255@2| @26||+1&#ffffff0|<+0&#ffd7ff255|t|e|x|t|>|9+2&#ff404010|0+0&#ffd7ff255@2| @18
+|0@2| @26||+1&#ffffff0|0+0&#ffd7ff255@2|9+2&#ff404010|<+0&#ffd7ff255|t|e|x|t|>| @18
+|0@2| @26||+1&#ffffff0|0+0&#ffd7ff255@2|9+2&#ff404010| +0&#ffd7ff255@18|<|t|e|x|t|>
+|0@2| @26||+1&#ffffff0|<+0&#ffd7ff255|t|e|x|t|>| @22
+|0@2| @26||+1&#ffffff0|9+2&#ff404010|0+0&#ffd7ff255@2| @24
+|~+0#4040ff13#ffffff0| @28||+1#0000000&|0+0&#ffd7ff255@2|9+2&#ff404010| +0&#ffd7ff255@24
+|~+0#4040ff13#ffffff0| @28||+1#0000000&|<+0&#ffd7ff255|t|e|x|t|>| @22
+|~+0#4040ff13#ffffff0| @28||+1#0000000&|~+0#4040ff13&| @27
+|[+3#0000000&|N|o| |N|a|m|e|]| |[|+|]| @1|1|,|1| @8|A|l@1| |[+1&&|N|o| |N|a|m|e|]| |[|+|]| @1|1|,|1|-|7| @5|A|l@1
+| +0&&@59
diff --git a/src/testdir/dumps/Test_prop_diff_mode_2.dump b/src/testdir/dumps/Test_prop_diff_mode_2.dump
new file mode 100644
index 0000000..243ec0d
--- /dev/null
+++ b/src/testdir/dumps/Test_prop_diff_mode_2.dump
@@ -0,0 +1,10 @@
+| +0#af5f00255#ffffff0@1|1| |0+0#0000000#ffd7ff255@2| @22||+1&#ffffff0| +0#af5f00255&@1|1| |<+0#0000000#ffd7ff255|t|e|x|t|>>9+2&#ff404010|0+0&#ffd7ff255@2| @14
+| +0#af5f00255#ffffff0@1|2| |0+0#0000000#ffd7ff255@2| @22||+1&#ffffff0| +0#af5f00255&@1|2| |0+0#0000000#ffd7ff255@2|9+2&#ff404010|<+0&#ffd7ff255|t|e|x|t|>| @14
+| +0#af5f00255#ffffff0@1|3| |0+0#0000000#ffd7ff255@2| @22||+1&#ffffff0| +0#af5f00255&@1|3| |0+0#0000000#ffd7ff255@2|9+2&#ff404010| +0&#ffd7ff255@14|<|t|e|x|t|>
+| +0#af5f00255#ffffff0@1|4| |0+0#0000000#ffd7ff255@2| @22||+1&#ffffff0| +0#af5f00255&@3|<+0#0000000#ffd7ff255|t|e|x|t|>| @18
+| +0#af5f00255#ffffff0@1|5| |0+0#0000000#ffd7ff255@2| @22||+1&#ffffff0| +0#af5f00255&@1|4| |9+2#0000000#ff404010|0+0&#ffd7ff255@2| @20
+|~+0#4040ff13#ffffff0| @28||+1#0000000&| +0#af5f00255&@1|5| |0+0#0000000#ffd7ff255@2|9+2&#ff404010| +0&#ffd7ff255@20
+|~+0#4040ff13#ffffff0| @28||+1#0000000&| +0#af5f00255&@3|<+0#0000000#ffd7ff255|t|e|x|t|>| @18
+|~+0#4040ff13#ffffff0| @28||+1#0000000&|~+0#4040ff13&| @27
+|[+1#0000000&|N|o| |N|a|m|e|]| |[|+|]| @1|1|,|1| @8|A|l@1| |[+3&&|N|o| |N|a|m|e|]| |[|+|]| @1|1|,|1|-|7| @5|A|l@1
+|:+0&&|w|i|n|d|o| |s|e|t| |n|u|m|b|e|r| @42
diff --git a/src/testdir/test_textprop.vim b/src/testdir/test_textprop.vim
index 1bda87f..333c3b2 100644
--- a/src/testdir/test_textprop.vim
+++ b/src/testdir/test_textprop.vim
@@ -3696,5 +3696,35 @@
   call StopVimInTerminal(buf)
 endfunc
 
+func Test_text_prop_diff_mode()
+  CheckRunVimInTerminal
+
+  let lines =<< trim END
+      call setline(1, ['9000', '0009', '0009', '9000', '0009'])
+
+      let type = 'test'
+      call prop_type_add(type, {})
+      let text = '<text>'
+      call prop_add(1, 1, {'type': type, 'text': text})
+      call prop_add(2, 0, {'type': type, 'text': text, 'text_align': 'after'})
+      call prop_add(3, 0, {'type': type, 'text': text, 'text_align': 'right'})
+      call prop_add(4, 0, {'type': type, 'text': text, 'text_align': 'above'})
+      call prop_add(5, 0, {'type': type, 'text': text, 'text_align': 'below'})
+      set diff
+
+      vnew
+      call setline(1, ['000', '000', '000', '000', '000'])
+      set diff
+  END
+  call writefile(lines, 'XtextPropDiff', 'D')
+  let buf = RunVimInTerminal('-S XtextPropDiff', #{rows: 10, cols: 60})
+  call VerifyScreenDump(buf, 'Test_prop_diff_mode_1', {})
+
+  call term_sendkeys(buf, ":windo set number\<CR>")
+  call VerifyScreenDump(buf, 'Test_prop_diff_mode_2', {})
+
+  call StopVimInTerminal(buf)
+endfunc
+
 
 " vim: shiftwidth=2 sts=2 expandtab
diff --git a/src/version.c b/src/version.c
index d8fe154..7722f3d 100644
--- a/src/version.c
+++ b/src/version.c
@@ -696,6 +696,8 @@
 static int included_patches[] =
 {   /* Add new patch number below this line */
 /**/
+    1067,
+/**/
     1066,
 /**/
     1065,