diff --git a/Git.sublime-settings b/Git.sublime-settings
index 05ebd07f..475d18ba 100644
--- a/Git.sublime-settings
+++ b/Git.sublime-settings
@@ -51,4 +51,8 @@
 	// Watch for gitignore changes?
 	// When found, import them. This will hide the ignored files from the sidebar.
 	,"gitignore_sync": false
+
+	// Allows diff to show untracked (new) files as well, instead of omitting
+	// them until staged
+	,"diff_untracked_files": false
 }
diff --git a/git/diff.py b/git/diff.py
index af815c76..500bacf3 100644
--- a/git/diff.py
+++ b/git/diff.py
@@ -9,8 +9,19 @@
 
 class GitDiff (object):
     def run(self, edit=None, ignore_whitespace=False):
+        self.ignore_whitespace = ignore_whitespace
+        self.edit = edit
+        s = sublime.load_settings("Git.sublime-settings")
+
+        # stage untracked files as empty files so they can be seen on the diff
+        if s.get('diff_untracked_files'):
+            self.stage_untracked_files()
+        else:
+            self.continue_diff(None)
+
+    def continue_diff(self, result):
         command = ['git', 'diff', '--no-color']
-        if ignore_whitespace:
+        if self.ignore_whitespace:
             command.extend(('--ignore-all-space', '--ignore-blank-lines'))
         command.extend(('--', self.get_file_name()))
         self.run_command(command, self.diff_done)
@@ -26,6 +37,29 @@ def diff_done(self, result):
         else:
             self.scratch(result, title="Git Diff", syntax=syntax)
 
+        self.reset_untracked_files()
+
+    # obtain the modified files list
+    def stage_untracked_files(self):
+        untracked_files_command = ['git', 'status', '-uall', '--porcelain']
+        self.run_command(untracked_files_command, self.stage_untracked_files_result)
+
+    # obtain the untracked files list and stage them
+    def stage_untracked_files_result(self, result):
+        # filter for untracked files
+        lines = result.rstrip().split('\n')
+        self.empty_stages = [x[3:] for x in lines if x.startswith('??')]
+
+        if len(self.empty_stages) > 0:
+            command = ['git', 'add', '.', '-N']
+            self.run_command(command, self.continue_diff, show_status=False)
+
+    # reset the empty staged files to their original untracked status
+    def reset_untracked_files(self):
+        if len(self.empty_stages) > 0:
+            reset_empty_stages_command = ['git', 'reset', '--quiet', '--'] + self.empty_stages
+            self.run_command(reset_empty_stages_command, show_status=False)
+
 
 class GitDiffCommit (object):
     def run(self, edit=None, ignore_whitespace=False):