diff --git a/src/vs/editor/common/diff/defaultLinesDiffComputer/heuristicSequenceOptimizations.ts b/src/vs/editor/common/diff/defaultLinesDiffComputer/heuristicSequenceOptimizations.ts
index 64b3b75d317..da23e59f332 100644
--- a/src/vs/editor/common/diff/defaultLinesDiffComputer/heuristicSequenceOptimizations.ts
+++ b/src/vs/editor/common/diff/defaultLinesDiffComputer/heuristicSequenceOptimizations.ts
@@ -12,6 +12,9 @@ import { LinesSliceCharSequence } from 'vs/editor/common/diff/defaultLinesDiffCo
 export function optimizeSequenceDiffs(sequence1: ISequence, sequence2: ISequence, sequenceDiffs: SequenceDiff[]): SequenceDiff[] {
 	let result = sequenceDiffs;
 	result = joinSequenceDiffsByShifting(sequence1, sequence2, result);
+	// Sometimes, calling this function twice improves the result.
+	// Uncomment the second invocation and run the tests to see the difference.
+	result = joinSequenceDiffsByShifting(sequence1, sequence2, result);
 	result = shiftSequenceDiffs(sequence1, sequence2, result);
 	return result;
 }
diff --git a/src/vs/editor/test/node/diffing/fixtures.test.ts b/src/vs/editor/test/node/diffing/fixtures.test.ts
index 01cd621546a..e200d808c22 100644
--- a/src/vs/editor/test/node/diffing/fixtures.test.ts
+++ b/src/vs/editor/test/node/diffing/fixtures.test.ts
@@ -120,7 +120,7 @@ suite('diffing fixtures', () => {
 	}
 
 	test(`test`, () => {
-		runTest('false-positive-move', 'advanced');
+		runTest('shifting-twice', 'advanced');
 	});
 
 	for (const folder of folders) {
diff --git a/src/vs/editor/test/node/diffing/fixtures/noise-1/advanced.expected.diff.json b/src/vs/editor/test/node/diffing/fixtures/noise-1/advanced.expected.diff.json
index 36bbcbebac9..06849d3af26 100644
--- a/src/vs/editor/test/node/diffing/fixtures/noise-1/advanced.expected.diff.json
+++ b/src/vs/editor/test/node/diffing/fixtures/noise-1/advanced.expected.diff.json
@@ -14,11 +14,7 @@
 			"innerChanges": [
 				{
 					"originalRange": "[52,7 -> 52,20]",
-					"modifiedRange": "[52,7 -> 53,2]"
-				},
-				{
-					"originalRange": "[52,24 -> 52,24]",
-					"modifiedRange": "[53,6 -> 53,45]"
+					"modifiedRange": "[52,7 -> 53,41]"
 				},
 				{
 					"originalRange": "[52,77 -> 56,1 EOL]",
diff --git a/src/vs/editor/test/node/diffing/fixtures/noise-2/advanced.expected.diff.json b/src/vs/editor/test/node/diffing/fixtures/noise-2/advanced.expected.diff.json
index a30c65cb9ee..eb4153d4d82 100644
--- a/src/vs/editor/test/node/diffing/fixtures/noise-2/advanced.expected.diff.json
+++ b/src/vs/editor/test/node/diffing/fixtures/noise-2/advanced.expected.diff.json
@@ -17,8 +17,8 @@
 					"modifiedRange": "[50,1 -> 51,1]"
 				},
 				{
-					"originalRange": "[50,19 -> 50,27]",
-					"modifiedRange": "[51,19 -> 68,24]"
+					"originalRange": "[50,19 -> 50,21]",
+					"modifiedRange": "[51,19 -> 68,18]"
 				},
 				{
 					"originalRange": "[51,1 -> 51,1]",
diff --git a/src/vs/editor/test/node/diffing/fixtures/noisy-move1/advanced.expected.diff.json b/src/vs/editor/test/node/diffing/fixtures/noisy-move1/advanced.expected.diff.json
index 11efbc5230f..6fd1598ffe3 100644
--- a/src/vs/editor/test/node/diffing/fixtures/noisy-move1/advanced.expected.diff.json
+++ b/src/vs/editor/test/node/diffing/fixtures/noisy-move1/advanced.expected.diff.json
@@ -13,8 +13,8 @@
 			"modifiedRange": "[1,52)",
 			"innerChanges": [
 				{
-					"originalRange": "[1,1 -> 2,50]",
-					"modifiedRange": "[1,1 -> 50,28]"
+					"originalRange": "[1,1 -> 2,37]",
+					"modifiedRange": "[1,1 -> 50,15]"
 				},
 				{
 					"originalRange": "[2,82 -> 2,82]",
@@ -59,12 +59,12 @@
 			]
 		},
 		{
-			"originalRange": "[42,45)",
-			"modifiedRange": "[91,176)",
+			"originalRange": "[42,44)",
+			"modifiedRange": "[91,175)",
 			"innerChanges": [
 				{
-					"originalRange": "[42,9 -> 45,1 EOL]",
-					"modifiedRange": "[91,9 -> 176,1 EOL]"
+					"originalRange": "[42,9 -> 44,1]",
+					"modifiedRange": "[91,9 -> 175,1]"
 				}
 			]
 		},
diff --git a/src/vs/editor/test/node/diffing/fixtures/random-match-2/advanced.expected.diff.json b/src/vs/editor/test/node/diffing/fixtures/random-match-2/advanced.expected.diff.json
index 337c2637132..65ce4a98835 100644
--- a/src/vs/editor/test/node/diffing/fixtures/random-match-2/advanced.expected.diff.json
+++ b/src/vs/editor/test/node/diffing/fixtures/random-match-2/advanced.expected.diff.json
@@ -13,8 +13,8 @@
 			"modifiedRange": "[2,4)",
 			"innerChanges": [
 				{
-					"originalRange": "[2,8 -> 4,17]",
-					"modifiedRange": "[2,8 -> 2,16]"
+					"originalRange": "[2,1 -> 4,2]",
+					"modifiedRange": "[2,1 -> 2,1]"
 				},
 				{
 					"originalRange": "[4,46 -> 4,53]",
diff --git a/src/vs/editor/test/node/diffing/fixtures/shifting-twice/1.txt b/src/vs/editor/test/node/diffing/fixtures/shifting-twice/1.txt
new file mode 100644
index 00000000000..8150851150c
--- /dev/null
+++ b/src/vs/editor/test/node/diffing/fixtures/shifting-twice/1.txt
@@ -0,0 +1,18 @@
+		for (extendToBottom = 0; extendToBottom < linesBelow; extendToBottom++) {
+			const origLine = move.original.endLineNumberExclusive + extendToBottom;
+			const modLine = move.modified.endLineNumberExclusive + extendToBottom;
+			if (origLine > originalLines.length || modLine > modifiedLines.length) {
+				break;
+			}
+			if (modifiedSet.contains(modLine) || originalSet.contains(origLine)) {
+				break;
+			}
+			if (!areLinesSimilar(originalLines[origLine - 1], modifiedLines[modLine - 1], timeout)) {
+				break;
+			}
+		}
+
+		if (extendToBottom > 0) {
+			originalSet.addRange(new LineRange(move.original.endLineNumberExclusive, move.original.endLineNumberExclusive + extendToBottom));
+			modifiedSet.addRange(new LineRange(move.modified.endLineNumberExclusive, move.modified.endLineNumberExclusive + extendToBottom));
+		}
\ No newline at end of file
diff --git a/src/vs/editor/test/node/diffing/fixtures/shifting-twice/2.txt b/src/vs/editor/test/node/diffing/fixtures/shifting-twice/2.txt
new file mode 100644
index 00000000000..d8220433dfc
--- /dev/null
+++ b/src/vs/editor/test/node/diffing/fixtures/shifting-twice/2.txt
@@ -0,0 +1,21 @@
+		for (extendToBottom = 0; extendToBottom < linesBelow; extendToBottom++) {
+			const origLine = move.original.endLineNumberExclusive + extendToBottom;
+			const modLine = move.modified.endLineNumberExclusive + extendToBottom;
+			if (origLine > originalLines.length || modLine > modifiedLines.length) {
+				break;
+			}
+			if (modifiedSet.contains(modLine) || originalSet.contains(origLine)) {
+				break;
+			}
+			if (!areLinesSimilar(originalLines[origLine - 1], modifiedLines[modLine - 1], timeout)) {
+				break;
+			}
+			if (originalLines[origLine - 1].trim().length !== 0) {
+				extendToBottomWithoutEmptyLines = extendToBottom + 1;
+			}
+		}
+
+		if (extendToBottomWithoutEmptyLines > 0) {
+			originalSet.addRange(new LineRange(move.original.endLineNumberExclusive, move.original.endLineNumberExclusive + extendToBottomWithoutEmptyLines));
+			modifiedSet.addRange(new LineRange(move.modified.endLineNumberExclusive, move.modified.endLineNumberExclusive + extendToBottomWithoutEmptyLines));
+		}
\ No newline at end of file
diff --git a/src/vs/editor/test/node/diffing/fixtures/shifting-twice/advanced.expected.diff.json b/src/vs/editor/test/node/diffing/fixtures/shifting-twice/advanced.expected.diff.json
new file mode 100644
index 00000000000..dbdf35c25c7
--- /dev/null
+++ b/src/vs/editor/test/node/diffing/fixtures/shifting-twice/advanced.expected.diff.json
@@ -0,0 +1,40 @@
+{
+	"original": {
+		"content": "\t\tfor (extendToBottom = 0; extendToBottom < linesBelow; extendToBottom++) {\n\t\t\tconst origLine = move.original.endLineNumberExclusive + extendToBottom;\n\t\t\tconst modLine = move.modified.endLineNumberExclusive + extendToBottom;\n\t\t\tif (origLine > originalLines.length || modLine > modifiedLines.length) {\n\t\t\t\tbreak;\n\t\t\t}\n\t\t\tif (modifiedSet.contains(modLine) || originalSet.contains(origLine)) {\n\t\t\t\tbreak;\n\t\t\t}\n\t\t\tif (!areLinesSimilar(originalLines[origLine - 1], modifiedLines[modLine - 1], timeout)) {\n\t\t\t\tbreak;\n\t\t\t}\n\t\t}\n\n\t\tif (extendToBottom > 0) {\n\t\t\toriginalSet.addRange(new LineRange(move.original.endLineNumberExclusive, move.original.endLineNumberExclusive + extendToBottom));\n\t\t\tmodifiedSet.addRange(new LineRange(move.modified.endLineNumberExclusive, move.modified.endLineNumberExclusive + extendToBottom));\n\t\t}",
+		"fileName": "./1.txt"
+	},
+	"modified": {
+		"content": "\t\tfor (extendToBottom = 0; extendToBottom < linesBelow; extendToBottom++) {\n\t\t\tconst origLine = move.original.endLineNumberExclusive + extendToBottom;\n\t\t\tconst modLine = move.modified.endLineNumberExclusive + extendToBottom;\n\t\t\tif (origLine > originalLines.length || modLine > modifiedLines.length) {\n\t\t\t\tbreak;\n\t\t\t}\n\t\t\tif (modifiedSet.contains(modLine) || originalSet.contains(origLine)) {\n\t\t\t\tbreak;\n\t\t\t}\n\t\t\tif (!areLinesSimilar(originalLines[origLine - 1], modifiedLines[modLine - 1], timeout)) {\n\t\t\t\tbreak;\n\t\t\t}\n\t\t\tif (originalLines[origLine - 1].trim().length !== 0) {\n\t\t\t\textendToBottomWithoutEmptyLines = extendToBottom + 1;\n\t\t\t}\n\t\t}\n\n\t\tif (extendToBottomWithoutEmptyLines > 0) {\n\t\t\toriginalSet.addRange(new LineRange(move.original.endLineNumberExclusive, move.original.endLineNumberExclusive + extendToBottomWithoutEmptyLines));\n\t\t\tmodifiedSet.addRange(new LineRange(move.modified.endLineNumberExclusive, move.modified.endLineNumberExclusive + extendToBottomWithoutEmptyLines));\n\t\t}",
+		"fileName": "./2.txt"
+	},
+	"diffs": [
+		{
+			"originalRange": "[13,13)",
+			"modifiedRange": "[13,16)",
+			"innerChanges": [
+				{
+					"originalRange": "[13,1 -> 13,1]",
+					"modifiedRange": "[13,1 -> 16,1]"
+				}
+			]
+		},
+		{
+			"originalRange": "[15,18)",
+			"modifiedRange": "[18,21)",
+			"innerChanges": [
+				{
+					"originalRange": "[15,7 -> 15,21]",
+					"modifiedRange": "[18,7 -> 18,38]"
+				},
+				{
+					"originalRange": "[16,116 -> 16,130]",
+					"modifiedRange": "[19,116 -> 19,147]"
+				},
+				{
+					"originalRange": "[17,116 -> 17,130]",
+					"modifiedRange": "[20,116 -> 20,147]"
+				}
+			]
+		}
+	]
+}
\ No newline at end of file
diff --git a/src/vs/editor/test/node/diffing/fixtures/shifting-twice/legacy.expected.diff.json b/src/vs/editor/test/node/diffing/fixtures/shifting-twice/legacy.expected.diff.json
new file mode 100644
index 00000000000..17d96759241
--- /dev/null
+++ b/src/vs/editor/test/node/diffing/fixtures/shifting-twice/legacy.expected.diff.json
@@ -0,0 +1,35 @@
+{
+	"original": {
+		"content": "\t\tfor (extendToBottom = 0; extendToBottom < linesBelow; extendToBottom++) {\n\t\t\tconst origLine = move.original.endLineNumberExclusive + extendToBottom;\n\t\t\tconst modLine = move.modified.endLineNumberExclusive + extendToBottom;\n\t\t\tif (origLine > originalLines.length || modLine > modifiedLines.length) {\n\t\t\t\tbreak;\n\t\t\t}\n\t\t\tif (modifiedSet.contains(modLine) || originalSet.contains(origLine)) {\n\t\t\t\tbreak;\n\t\t\t}\n\t\t\tif (!areLinesSimilar(originalLines[origLine - 1], modifiedLines[modLine - 1], timeout)) {\n\t\t\t\tbreak;\n\t\t\t}\n\t\t}\n\n\t\tif (extendToBottom > 0) {\n\t\t\toriginalSet.addRange(new LineRange(move.original.endLineNumberExclusive, move.original.endLineNumberExclusive + extendToBottom));\n\t\t\tmodifiedSet.addRange(new LineRange(move.modified.endLineNumberExclusive, move.modified.endLineNumberExclusive + extendToBottom));\n\t\t}",
+		"fileName": "./1.txt"
+	},
+	"modified": {
+		"content": "\t\tfor (extendToBottom = 0; extendToBottom < linesBelow; extendToBottom++) {\n\t\t\tconst origLine = move.original.endLineNumberExclusive + extendToBottom;\n\t\t\tconst modLine = move.modified.endLineNumberExclusive + extendToBottom;\n\t\t\tif (origLine > originalLines.length || modLine > modifiedLines.length) {\n\t\t\t\tbreak;\n\t\t\t}\n\t\t\tif (modifiedSet.contains(modLine) || originalSet.contains(origLine)) {\n\t\t\t\tbreak;\n\t\t\t}\n\t\t\tif (!areLinesSimilar(originalLines[origLine - 1], modifiedLines[modLine - 1], timeout)) {\n\t\t\t\tbreak;\n\t\t\t}\n\t\t\tif (originalLines[origLine - 1].trim().length !== 0) {\n\t\t\t\textendToBottomWithoutEmptyLines = extendToBottom + 1;\n\t\t\t}\n\t\t}\n\n\t\tif (extendToBottomWithoutEmptyLines > 0) {\n\t\t\toriginalSet.addRange(new LineRange(move.original.endLineNumberExclusive, move.original.endLineNumberExclusive + extendToBottomWithoutEmptyLines));\n\t\t\tmodifiedSet.addRange(new LineRange(move.modified.endLineNumberExclusive, move.modified.endLineNumberExclusive + extendToBottomWithoutEmptyLines));\n\t\t}",
+		"fileName": "./2.txt"
+	},
+	"diffs": [
+		{
+			"originalRange": "[13,13)",
+			"modifiedRange": "[13,16)",
+			"innerChanges": null
+		},
+		{
+			"originalRange": "[15,18)",
+			"modifiedRange": "[18,21)",
+			"innerChanges": [
+				{
+					"originalRange": "[15,21 -> 15,21]",
+					"modifiedRange": "[18,21 -> 18,38]"
+				},
+				{
+					"originalRange": "[16,130 -> 16,130]",
+					"modifiedRange": "[19,130 -> 19,147]"
+				},
+				{
+					"originalRange": "[17,130 -> 17,130]",
+					"modifiedRange": "[20,130 -> 20,147]"
+				}
+			]
+		}
+	]
+}
\ No newline at end of file