diff --git a/src/vs/workbench/contrib/inlineChat/browser/inlineChatController.ts b/src/vs/workbench/contrib/inlineChat/browser/inlineChatController.ts
index b1f7074e30b..757b17aaa11 100644
--- a/src/vs/workbench/contrib/inlineChat/browser/inlineChatController.ts
+++ b/src/vs/workbench/contrib/inlineChat/browser/inlineChatController.ts
@@ -1425,6 +1425,13 @@ export class InlineChatController2 implements IEditorContribution {
 			}
 		}));
 
+		const defaultPlaceholderObs = visibleSessionObs.map((session, r) => {
+			return session?.initialSelection.isEmpty()
+				? localize('placeholder', "Generate code")
+				: localize('placeholderWithSelection', "Modify selected code");
+		});
+
+
 		this._store.add(autorun(r => {
 
 			// HIDE/SHOW
@@ -1438,6 +1445,7 @@ export class InlineChatController2 implements IEditorContribution {
 				ctxInlineChatVisible.set(true);
 				this._zone.value.widget.chatWidget.setModel(session.chatModel);
 				if (!this._zone.value.position) {
+					this._zone.value.widget.chatWidget.setInputPlaceholder(defaultPlaceholderObs.read(r));
 					this._zone.value.widget.chatWidget.input.renderAttachedContext(); // TODO - fights layout bug
 					this._zone.value.show(session.initialPosition);
 				}
@@ -1474,6 +1482,7 @@ export class InlineChatController2 implements IEditorContribution {
 			return observableFromEvent(this, response.onDidChange, () => response.response.value.findLast(part => part.kind === 'progressMessage')).read(r);
 		});
 
+
 		this._store.add(autorun(r => {
 			const response = lastResponseObs.read(r);
 
@@ -1489,7 +1498,7 @@ export class InlineChatController2 implements IEditorContribution {
 
 				// no response or not in progress
 				this._zone.value.widget.domNode.classList.toggle('request-in-progress', false);
-				this._zone.value.widget.chatWidget.setInputPlaceholder(localize('placeholder', "Edit, refactor, and generate code"));
+				this._zone.value.widget.chatWidget.setInputPlaceholder(defaultPlaceholderObs.read(r));
 
 			} else {
 				this._zone.value.widget.domNode.classList.toggle('request-in-progress', true);
diff --git a/src/vs/workbench/contrib/inlineChat/browser/inlineChatSessionService.ts b/src/vs/workbench/contrib/inlineChat/browser/inlineChatSessionService.ts
index 22e566f61fe..323b97a3d45 100644
--- a/src/vs/workbench/contrib/inlineChat/browser/inlineChatSessionService.ts
+++ b/src/vs/workbench/contrib/inlineChat/browser/inlineChatSessionService.ts
@@ -9,6 +9,7 @@ import { URI } from '../../../../base/common/uri.js';
 import { IActiveCodeEditor, ICodeEditor } from '../../../../editor/browser/editorBrowser.js';
 import { Position } from '../../../../editor/common/core/position.js';
 import { IRange } from '../../../../editor/common/core/range.js';
+import { Selection } from '../../../../editor/common/core/selection.js';
 import { IValidEditOperation } from '../../../../editor/common/model.js';
 import { createDecorator, ServicesAccessor } from '../../../../platform/instantiation/common/instantiation.js';
 import { ChatViewPaneTarget, IChatWidgetService } from '../../chat/browser/chat.js';
@@ -35,6 +36,7 @@ export interface IInlineChatSessionEndEvent extends IInlineChatSessionEvent {
 
 export interface IInlineChatSession2 {
 	readonly initialPosition: Position;
+	readonly initialSelection: Selection;
 	readonly uri: URI;
 	readonly chatModel: IChatModel;
 	readonly editingSession: IChatEditingSession;
diff --git a/src/vs/workbench/contrib/inlineChat/browser/inlineChatSessionServiceImpl.ts b/src/vs/workbench/contrib/inlineChat/browser/inlineChatSessionServiceImpl.ts
index 2e50d987fa9..5a14d5f4070 100644
--- a/src/vs/workbench/contrib/inlineChat/browser/inlineChatSessionServiceImpl.ts
+++ b/src/vs/workbench/contrib/inlineChat/browser/inlineChatSessionServiceImpl.ts
@@ -399,6 +399,7 @@ export class InlineChatSessionServiceImpl implements IInlineChatSessionService {
 		const result: IInlineChatSession2 = {
 			uri,
 			initialPosition: editor.getSelection().getStartPosition().delta(-1), /* one line above selection start */
+			initialSelection: editor.getSelection(),
 			chatModel,
 			editingSession: chatModel.editingSession!,
 			dispose: store.dispose.bind(store)