diff --git a/NEW/src/Utils/JdeScoping.ConfigManager/Services/DiffService.cs b/NEW/src/Utils/JdeScoping.ConfigManager/Services/DiffService.cs
new file mode 100644
index 0000000..b5974a5
--- /dev/null
+++ b/NEW/src/Utils/JdeScoping.ConfigManager/Services/DiffService.cs
@@ -0,0 +1,65 @@
+using DiffPlex;
+using DiffPlex.DiffBuilder;
+using DiffPlex.DiffBuilder.Model;
+
+namespace JdeScoping.ConfigManager.Services;
+
+/// <summary>
+/// Service for generating diffs between text content.
+/// </summary>
+public class DiffService : IDiffService
+{
+    public DiffResult GenerateDiff(string original, string modified)
+    {
+        var diffBuilder = new InlineDiffBuilder(new Differ());
+        var diff = diffBuilder.BuildDiffModel(original, modified);
+
+        var lines = new List<DiffLine>();
+        int oldLineNum = 1;
+        int newLineNum = 1;
+        int insertions = 0;
+        int deletions = 0;
+
+        foreach (var line in diff.Lines)
+        {
+            var diffLine = new DiffLine
+            {
+                Text = line.Text,
+                Type = line.Type switch
+                {
+                    ChangeType.Inserted => DiffLineType.Added,
+                    ChangeType.Deleted => DiffLineType.Removed,
+                    _ => DiffLineType.Unchanged
+                },
+                OldLineNumber = line.Type == ChangeType.Inserted ? null : oldLineNum,
+                NewLineNumber = line.Type == ChangeType.Deleted ? null : newLineNum
+            };
+
+            lines.Add(diffLine);
+
+            switch (line.Type)
+            {
+                case ChangeType.Inserted:
+                    newLineNum++;
+                    insertions++;
+                    break;
+                case ChangeType.Deleted:
+                    oldLineNum++;
+                    deletions++;
+                    break;
+                default:
+                    oldLineNum++;
+                    newLineNum++;
+                    break;
+            }
+        }
+
+        return new DiffResult
+        {
+            HasChanges = insertions > 0 || deletions > 0,
+            Lines = lines,
+            Insertions = insertions,
+            Deletions = deletions
+        };
+    }
+}
diff --git a/NEW/src/Utils/JdeScoping.ConfigManager/Services/IDiffService.cs b/NEW/src/Utils/JdeScoping.ConfigManager/Services/IDiffService.cs
new file mode 100644
index 0000000..502edaa
--- /dev/null
+++ b/NEW/src/Utils/JdeScoping.ConfigManager/Services/IDiffService.cs
@@ -0,0 +1,38 @@
+namespace JdeScoping.ConfigManager.Services;
+
+/// <summary>
+/// Represents a line in a diff output.
+/// </summary>
+public class DiffLine
+{
+    public required int? OldLineNumber { get; init; }
+    public required int? NewLineNumber { get; init; }
+    public required string Text { get; init; }
+    public required DiffLineType Type { get; init; }
+}
+
+public enum DiffLineType
+{
+    Unchanged,
+    Added,
+    Removed
+}
+
+/// <summary>
+/// Result of a diff operation.
+/// </summary>
+public class DiffResult
+{
+    public bool HasChanges { get; init; }
+    public List<DiffLine> Lines { get; init; } = [];
+    public int Insertions { get; init; }
+    public int Deletions { get; init; }
+}
+
+/// <summary>
+/// Service for generating diffs between text content.
+/// </summary>
+public interface IDiffService
+{
+    DiffResult GenerateDiff(string original, string modified);
+}
diff --git a/NEW/tests/JdeScoping.ConfigManager.Tests/Services/DiffServiceTests.cs b/NEW/tests/JdeScoping.ConfigManager.Tests/Services/DiffServiceTests.cs
new file mode 100644
index 0000000..cba412f
--- /dev/null
+++ b/NEW/tests/JdeScoping.ConfigManager.Tests/Services/DiffServiceTests.cs
@@ -0,0 +1,173 @@
+using JdeScoping.ConfigManager.Services;
+
+namespace JdeScoping.ConfigManager.Tests.Services;
+
+public class DiffServiceTests
+{
+    private readonly DiffService _sut;
+
+    public DiffServiceTests()
+    {
+        _sut = new DiffService();
+    }
+
+    [Fact]
+    public void GenerateDiff_WithNoChanges_ReturnsEmptyDiff()
+    {
+        // Arrange
+        var original = "line1\nline2\nline3";
+        var modified = "line1\nline2\nline3";
+
+        // Act
+        var result = _sut.GenerateDiff(original, modified);
+
+        // Assert
+        result.HasChanges.ShouldBeFalse();
+    }
+
+    [Fact]
+    public void GenerateDiff_WithChanges_ReturnsDiffLines()
+    {
+        // Arrange
+        var original = "line1\nline2\nline3";
+        var modified = "line1\nmodified\nline3";
+
+        // Act
+        var result = _sut.GenerateDiff(original, modified);
+
+        // Assert
+        result.HasChanges.ShouldBeTrue();
+        result.Lines.ShouldNotBeEmpty();
+    }
+
+    [Fact]
+    public void GenerateDiff_WithAddedLine_ReportsInsertion()
+    {
+        // Arrange
+        var original = "line1\nline2";
+        var modified = "line1\nline2\nline3";
+
+        // Act
+        var result = _sut.GenerateDiff(original, modified);
+
+        // Assert
+        result.HasChanges.ShouldBeTrue();
+        result.Insertions.ShouldBe(1);
+        result.Deletions.ShouldBe(0);
+        result.Lines.ShouldContain(l => l.Type == DiffLineType.Added && l.Text == "line3");
+    }
+
+    [Fact]
+    public void GenerateDiff_WithRemovedLine_ReportsDeletion()
+    {
+        // Arrange
+        var original = "line1\nline2\nline3";
+        var modified = "line1\nline3";
+
+        // Act
+        var result = _sut.GenerateDiff(original, modified);
+
+        // Assert
+        result.HasChanges.ShouldBeTrue();
+        result.Deletions.ShouldBe(1);
+        result.Lines.ShouldContain(l => l.Type == DiffLineType.Removed && l.Text == "line2");
+    }
+
+    [Fact]
+    public void GenerateDiff_WithModifiedLine_ReportsAdditionAndDeletion()
+    {
+        // Arrange
+        var original = "line1\noriginal\nline3";
+        var modified = "line1\nchanged\nline3";
+
+        // Act
+        var result = _sut.GenerateDiff(original, modified);
+
+        // Assert
+        result.HasChanges.ShouldBeTrue();
+        result.Insertions.ShouldBeGreaterThan(0);
+        result.Deletions.ShouldBeGreaterThan(0);
+    }
+
+    [Fact]
+    public void GenerateDiff_WithEmptyOriginal_ReportsAllAsInsertions()
+    {
+        // Arrange
+        var original = "";
+        var modified = "line1\nline2";
+
+        // Act
+        var result = _sut.GenerateDiff(original, modified);
+
+        // Assert
+        result.HasChanges.ShouldBeTrue();
+        result.Insertions.ShouldBeGreaterThan(0);
+        result.Deletions.ShouldBe(0);
+    }
+
+    [Fact]
+    public void GenerateDiff_WithEmptyModified_ReportsAllAsDeletions()
+    {
+        // Arrange
+        var original = "line1\nline2";
+        var modified = "";
+
+        // Act
+        var result = _sut.GenerateDiff(original, modified);
+
+        // Assert
+        result.HasChanges.ShouldBeTrue();
+        result.Insertions.ShouldBe(0);
+        result.Deletions.ShouldBeGreaterThan(0);
+    }
+
+    [Fact]
+    public void GenerateDiff_LineNumbers_AreCorrectForUnchangedLines()
+    {
+        // Arrange
+        var original = "line1\nline2\nline3";
+        var modified = "line1\nline2\nline3";
+
+        // Act
+        var result = _sut.GenerateDiff(original, modified);
+
+        // Assert
+        var firstLine = result.Lines.First();
+        firstLine.OldLineNumber.ShouldBe(1);
+        firstLine.NewLineNumber.ShouldBe(1);
+    }
+
+    [Fact]
+    public void GenerateDiff_AddedLine_HasNullOldLineNumber()
+    {
+        // Arrange
+        var original = "line1";
+        var modified = "line1\nline2";
+
+        // Act
+        var result = _sut.GenerateDiff(original, modified);
+
+        // Assert
+        var addedLine = result.Lines.FirstOrDefault(l => l.Type == DiffLineType.Added);
+        addedLine.ShouldNotBeNull();
+        addedLine.OldLineNumber.ShouldBeNull();
+        addedLine.NewLineNumber.ShouldNotBeNull();
+    }
+
+    [Fact]
+    public void GenerateDiff_RemovedLine_HasNullNewLineNumber()
+    {
+        // Arrange
+        var original = "line1\nline2";
+        var modified = "line1";
+
+        // Act
+        var result = _sut.GenerateDiff(original, modified);
+
+        // Assert
+        var removedLine = result.Lines.FirstOrDefault(l => l.Type == DiffLineType.Removed);
+        removedLine.ShouldNotBeNull();
+        removedLine.OldLineNumber.ShouldNotBeNull();
+        removedLine.NewLineNumber.ShouldBeNull();
+    }
+}