diff --git a/src/vs/workbench/api/browser/mainThreadNotebook.ts b/src/vs/workbench/api/browser/mainThreadNotebook.ts
index 12242914859..6f2566049d7 100644
--- a/src/vs/workbench/api/browser/mainThreadNotebook.ts
+++ b/src/vs/workbench/api/browser/mainThreadNotebook.ts
@@ -4,12 +4,12 @@
  *--------------------------------------------------------------------------------------------*/
 
 import { extHostNamedCustomer } from 'vs/workbench/api/common/extHostCustomers';
-import { MainContext, MainThreadNotebookShape, NotebookExtensionDescription, IExtHostContext, ExtHostNotebookShape, ExtHostContext, NotebookCellsSplice, NotebookCellOutputsSplice } from '../common/extHost.protocol';
+import { MainContext, MainThreadNotebookShape, NotebookExtensionDescription, IExtHostContext, ExtHostNotebookShape, ExtHostContext, NotebookCellOutputsSplice } from '../common/extHost.protocol';
 import { Disposable, IDisposable } from 'vs/base/common/lifecycle';
 import { URI, UriComponents } from 'vs/base/common/uri';
 import { INotebookService, IMainNotebookController } from 'vs/workbench/contrib/notebook/browser/notebookService';
 import { Emitter, Event } from 'vs/base/common/event';
-import { ICell, IOutput, INotebook, INotebookMimeTypeSelector, NOTEBOOK_DISPLAY_ORDER } from 'vs/workbench/contrib/notebook/common/notebookCommon';
+import { ICell, IOutput, INotebook, INotebookMimeTypeSelector, NOTEBOOK_DISPLAY_ORDER, NotebookCellsSplice } from 'vs/workbench/contrib/notebook/common/notebookCommon';
 import { IConfigurationService } from 'vs/platform/configuration/common/configuration';
 
 export class MainThreadCell implements ICell {
@@ -76,8 +76,8 @@ export class MainThreadCell implements ICell {
 export class MainThreadNotebookDocument extends Disposable implements INotebook {
 	private readonly _onWillDispose: Emitter<void> = this._register(new Emitter<void>());
 	readonly onWillDispose: Event<void> = this._onWillDispose.event;
-	private readonly _onDidChangeCells = new Emitter<void>();
-	get onDidChangeCells(): Event<void> { return this._onDidChangeCells.event; }
+	private readonly _onDidChangeCells = new Emitter<NotebookCellsSplice[]>();
+	get onDidChangeCells(): Event<NotebookCellsSplice[]> { return this._onDidChangeCells.event; }
 	private _onDidChangeDirtyState = new Emitter<boolean>();
 	onDidChangeDirtyState: Event<boolean> = this._onDidChangeDirtyState.event;
 	private _mapping: Map<number, MainThreadCell> = new Map();
@@ -181,8 +181,7 @@ export class MainThreadNotebookDocument extends Disposable implements INotebook
 			this.cells.splice(splice[0], splice[1], ...newCells);
 		});
 
-		// @TODO, support incremental insertion/deletion instead of simple list relayout.
-		this._onDidChangeCells.fire();
+		this._onDidChangeCells.fire(splices);
 	}
 
 	spliceNotebookCellOutputs(cellHandle: number, splices: NotebookCellOutputsSplice[]): void {
diff --git a/src/vs/workbench/contrib/notebook/browser/notebookEditor.ts b/src/vs/workbench/contrib/notebook/browser/notebookEditor.ts
index 3d53700815b..a83ea7ce029 100644
--- a/src/vs/workbench/contrib/notebook/browser/notebookEditor.ts
+++ b/src/vs/workbench/contrib/notebook/browser/notebookEditor.ts
@@ -29,7 +29,7 @@ import { OutputRenderer } from 'vs/workbench/contrib/notebook/browser/output/out
 import { BackLayerWebView } from 'vs/workbench/contrib/notebook/browser/renderers/backLayerWebView';
 import { CodeCellRenderer, MarkdownCellRenderer, NotebookCellListDelegate } from 'vs/workbench/contrib/notebook/browser/renderers/cellRenderer';
 import { CellViewModel } from 'vs/workbench/contrib/notebook/browser/renderers/cellViewModel';
-import { CELL_MARGIN, INotebook } from 'vs/workbench/contrib/notebook/common/notebookCommon';
+import { CELL_MARGIN, INotebook, NotebookCellsSplice } from 'vs/workbench/contrib/notebook/common/notebookCommon';
 import { IWebviewService } from 'vs/workbench/contrib/webview/browser/webview';
 import { getExtraColor } from 'vs/workbench/contrib/welcome/walkThrough/common/walkThroughUtils';
 import { IEditorGroup, IEditorGroupsService } from 'vs/workbench/services/editor/common/editorGroupsService';
@@ -287,8 +287,8 @@ export class NotebookEditor extends BaseEditor implements INotebookEditor {
 				}
 
 				this.model = model;
-				this.localStore.add(this.model.onDidChangeCells(() => {
-					this.updateViewCells();
+				this.localStore.add(this.model.onDidChangeCells((e) => {
+					this.updateViewCells(e);
 				}));
 
 				let viewState = this.loadTextEditorViewState(input);
@@ -402,7 +402,13 @@ export class NotebookEditor extends BaseEditor implements INotebookEditor {
 		}
 	}
 
-	updateViewCells() {
+	updateViewCells(splices: NotebookCellsSplice[]) {
+		let update = () => splices.reverse().forEach((diff) => {
+			this.list?.splice(diff[0], diff[1], diff[2].map(cell => {
+				return this.instantiationService.createInstance(CellViewModel, this.viewType!, this.notebook!.handle, cell, false);
+			}));
+		});
+
 		if (this.list?.view.isRendering) {
 			if (this.relayoutDisposable) {
 				this.relayoutDisposable.dispose();
@@ -410,11 +416,11 @@ export class NotebookEditor extends BaseEditor implements INotebookEditor {
 			}
 
 			this.relayoutDisposable = DOM.scheduleAtNextAnimationFrame(() => {
-				this.list?.rerender();
+				update();
 				this.relayoutDisposable = null;
 			});
 		} else {
-			this.list?.rerender();
+			update();
 		}
 	}
 
diff --git a/src/vs/workbench/contrib/notebook/browser/notebookEditorInput.ts b/src/vs/workbench/contrib/notebook/browser/notebookEditorInput.ts
index ca5255b9ed7..b892f60dcb4 100644
--- a/src/vs/workbench/contrib/notebook/browser/notebookEditorInput.ts
+++ b/src/vs/workbench/contrib/notebook/browser/notebookEditorInput.ts
@@ -8,7 +8,7 @@ import { ITextModelService } from 'vs/editor/common/services/resolverService';
 import { ITextModel } from 'vs/editor/common/model';
 import { Emitter, Event } from 'vs/base/common/event';
 import { INotebookService } from 'vs/workbench/contrib/notebook/browser/notebookService';
-import { INotebook, ICell } from 'vs/workbench/contrib/notebook/common/notebookCommon';
+import { INotebook, ICell, NotebookCellsSplice } from 'vs/workbench/contrib/notebook/common/notebookCommon';
 
 export class NotebookEditorModel extends EditorModel {
 	private _dirty = false;
@@ -16,8 +16,8 @@ export class NotebookEditorModel extends EditorModel {
 	protected readonly _onDidChangeDirty = this._register(new Emitter<void>());
 	readonly onDidChangeDirty = this._onDidChangeDirty.event;
 
-	private readonly _onDidChangeCells = new Emitter<void>();
-	get onDidChangeCells(): Event<void> { return this._onDidChangeCells.event; }
+	private readonly _onDidChangeCells = new Emitter<NotebookCellsSplice[]>();
+	get onDidChangeCells(): Event<NotebookCellsSplice[]> { return this._onDidChangeCells.event; }
 
 	constructor(
 		public readonly textModel: ITextModel,
@@ -32,8 +32,8 @@ export class NotebookEditorModel extends EditorModel {
 					this._onDidChangeDirty.fire();
 				}
 			}));
-			this._register(_notebook.onDidChangeCells(() => {
-				this._onDidChangeCells.fire();
+			this._register(_notebook.onDidChangeCells((e) => {
+				this._onDidChangeCells.fire(e);
 			}));
 		}
 	}
diff --git a/src/vs/workbench/contrib/notebook/common/notebookCommon.ts b/src/vs/workbench/contrib/notebook/common/notebookCommon.ts
index 0160a2ff934..e44f65feedb 100644
--- a/src/vs/workbench/contrib/notebook/common/notebookCommon.ts
+++ b/src/vs/workbench/contrib/notebook/common/notebookCommon.ts
@@ -129,7 +129,7 @@ export interface INotebook {
 	languages: string[];
 	cells: ICell[];
 	renderers: Set<number>;
-	onDidChangeCells?: Event<void>;
+	onDidChangeCells?: Event<NotebookCellsSplice[]>;
 	onDidChangeDirtyState: Event<boolean>;
 	onWillDispose(listener: () => void): IDisposable;
 	save(): Promise<boolean>;
@@ -152,3 +152,9 @@ export interface IOutputTransformContribution {
 
 export const CELL_MARGIN = 24;
 
+
+export type NotebookCellsSplice = [
+	number /* start */,
+	number /* delete count */,
+	ICell[]
+];