diff --git a/extensions/git/npm-shrinkwrap.json b/extensions/git/npm-shrinkwrap.json
index d757c142e96..9239e6181fe 100644
--- a/extensions/git/npm-shrinkwrap.json
+++ b/extensions/git/npm-shrinkwrap.json
@@ -7,13 +7,18 @@
       "from": "applicationinsights@0.18.0",
       "resolved": "https://registry.npmjs.org/applicationinsights/-/applicationinsights-0.18.0.tgz"
     },
+    "byline": {
+      "version": "5.0.0",
+      "from": "byline@latest",
+      "resolved": "https://registry.npmjs.org/byline/-/byline-5.0.0.tgz"
+    },
     "iconv-lite": {
       "version": "0.4.15",
       "from": "iconv-lite@0.4.15",
       "resolved": "https://registry.npmjs.org/iconv-lite/-/iconv-lite-0.4.15.tgz"
     },
     "vscode-extension-telemetry": {
-      "version": "0.0.7",
+      "version": "0.0.8",
       "from": "vscode-extension-telemetry@>=0.0.8 <0.0.9",
       "resolved": "https://registry.npmjs.org/vscode-extension-telemetry/-/vscode-extension-telemetry-0.0.8.tgz"
     },
diff --git a/extensions/git/package.json b/extensions/git/package.json
index d4b341b4451..3175cc55c2a 100644
--- a/extensions/git/package.json
+++ b/extensions/git/package.json
@@ -806,6 +806,7 @@
     }
   },
   "dependencies": {
+    "byline": "^5.0.0",
     "iconv-lite": "0.4.15",
     "vscode-extension-telemetry": "0.0.8",
     "vscode-nls": "2.0.2"
diff --git a/extensions/git/src/commands.ts b/extensions/git/src/commands.ts
index 58decf3724b..fc66825d924 100644
--- a/extensions/git/src/commands.ts
+++ b/extensions/git/src/commands.ts
@@ -10,6 +10,7 @@ import { Ref, RefType, Git, GitErrorCodes, Branch } from './git';
 import { Repository, Resource, Status, CommitOptions, ResourceGroupType } from './repository';
 import { Model } from './model';
 import { toGitUri, fromGitUri } from './uri';
+import { grep } from './util';
 import { applyLineChanges, intersectDiffWithRange, toLineRanges, invertLineChange } from './staging';
 import * as path from 'path';
 import * as os from 'os';
@@ -486,12 +487,20 @@ export class CommandCenter {
 		}
 
 		const selection = resourceStates.filter(s => s instanceof Resource) as Resource[];
-		const mergeConflicts = selection.filter(s => s.resourceGroupType === ResourceGroupType.Merge);
+		const merge = selection.filter(s => s.resourceGroupType === ResourceGroupType.Merge);
+		const bothModified = merge.filter(s => s.type === Status.BOTH_MODIFIED);
+		const promises = bothModified.map(s => grep(s.resourceUri.fsPath, /^<{7}|^={7}|^>{7}/));
+		const unresolvedBothModified = await Promise.all<boolean>(promises);
+		const resolvedConflicts = bothModified.filter((s, i) => !unresolvedBothModified[i]);
+		const unresolvedConflicts = [
+			...merge.filter(s => s.type !== Status.BOTH_MODIFIED),
+			...bothModified.filter((s, i) => unresolvedBothModified[i])
+		];
 
-		if (mergeConflicts.length > 0) {
-			const message = mergeConflicts.length > 1
-				? localize('confirm stage files with merge conflicts', "Are you sure you want to stage {0} files with merge conflicts?", mergeConflicts.length)
-				: localize('confirm stage file with merge conflicts', "Are you sure you want to stage {0} with merge conflicts?", path.basename(mergeConflicts[0].resourceUri.fsPath));
+		if (unresolvedConflicts.length > 0) {
+			const message = unresolvedConflicts.length > 1
+				? localize('confirm stage files with merge conflicts', "Are you sure you want to stage {0} files with merge conflicts?", unresolvedConflicts.length)
+				: localize('confirm stage file with merge conflicts', "Are you sure you want to stage {0} with merge conflicts?", path.basename(unresolvedConflicts[0].resourceUri.fsPath));
 
 			const yes = localize('yes', "Yes");
 			const pick = await window.showWarningMessage(message, { modal: true }, yes);
@@ -501,10 +510,8 @@ export class CommandCenter {
 			}
 		}
 
-		const workingTree = selection
-			.filter(s => s.resourceGroupType === ResourceGroupType.WorkingTree);
-
-		const scmResources = [...workingTree, ...mergeConflicts];
+		const workingTree = selection.filter(s => s.resourceGroupType === ResourceGroupType.WorkingTree);
+		const scmResources = [...workingTree, ...resolvedConflicts, ...unresolvedConflicts];
 
 		if (!scmResources.length) {
 			return;
diff --git a/extensions/git/src/util.ts b/extensions/git/src/util.ts
index 632fd5a0a86..6e1dc139340 100644
--- a/extensions/git/src/util.ts
+++ b/extensions/git/src/util.ts
@@ -8,6 +8,7 @@
 import { Event } from 'vscode';
 import { dirname } from 'path';
 import * as fs from 'fs';
+import * as byline from 'byline';
 
 export function log(...args: any[]): void {
 	console.log.apply(console, ['git:', ...args]);
@@ -188,4 +189,20 @@ export function find<T>(array: T[], fn: (t: T) => boolean): T | undefined {
 	});
 
 	return result;
+}
+
+export async function grep(filename: string, pattern: RegExp): Promise<boolean> {
+	return new Promise<boolean>((c, e) => {
+		const fileStream = fs.createReadStream(filename, { encoding: 'utf8' });
+		const stream = byline(fileStream);
+		stream.on('data', (line: string) => {
+			if (pattern.test(line)) {
+				fileStream.close();
+				c(true);
+			}
+		});
+
+		stream.on('error', e);
+		stream.on('end', () => c(false));
+	});
 }
\ No newline at end of file