diff --git a/src/vs/editor/browser/widget/diffEditor/commands.ts b/src/vs/editor/browser/widget/diffEditor/commands.ts
index 425266acea8d1..a3c2b7f212b4d 100644
--- a/src/vs/editor/browser/widget/diffEditor/commands.ts
+++ b/src/vs/editor/browser/widget/diffEditor/commands.ts
@@ -80,6 +80,32 @@ export class ToggleUseInlineViewWhenSpaceIsLimited extends Action2 {
 
 const diffEditorCategory: ILocalizedString = localize2('diffEditor', "Diff Editor");
 
+export class ToggleDiffSideBySide extends Action2 {
+	constructor() {
+		super({
+			id: 'diffEditor.toggleDiffSideBySide',
+			title: localize2('toggleDiffSideBySide', 'Toggle Inline View'),
+			icon: Codicon.splitHorizontal,
+			toggled: EditorContextKeys.diffEditorInlineMode.toNegated(),
+			precondition: ContextKeyExpr.has('isInDiffEditor'),
+			f1: true,
+			category: diffEditorCategory,
+			menu: {
+				when: ContextKeyExpr.has('isInDiffEditor'),
+				id: MenuId.EditorTitle,
+				order: 21,
+				group: 'navigation',
+			},
+		});
+	}
+
+	run(accessor: ServicesAccessor, ...args: unknown[]): void {
+		const configurationService = accessor.get(IConfigurationService);
+		const newValue = !configurationService.getValue<boolean>('diffEditor.renderSideBySide');
+		configurationService.updateValue('diffEditor.renderSideBySide', newValue);
+	}
+}
+
 export class SwitchSide extends EditorAction2 {
 	constructor() {
 		super({
diff --git a/src/vs/editor/browser/widget/diffEditor/diffEditor.contribution.ts b/src/vs/editor/browser/widget/diffEditor/diffEditor.contribution.ts
index d264028a74950..b12b0ddb21653 100644
--- a/src/vs/editor/browser/widget/diffEditor/diffEditor.contribution.ts
+++ b/src/vs/editor/browser/widget/diffEditor/diffEditor.contribution.ts
@@ -4,7 +4,7 @@
  *--------------------------------------------------------------------------------------------*/
 
 import { Codicon } from '../../../../base/common/codicons.js';
-import { AccessibleDiffViewerNext, AccessibleDiffViewerPrev, CollapseAllUnchangedRegions, ExitCompareMove, RevertHunkOrSelection, ShowAllUnchangedRegions, SwitchSide, ToggleCollapseUnchangedRegions, ToggleShowMovedCodeBlocks, ToggleUseInlineViewWhenSpaceIsLimited } from './commands.js';
+import { AccessibleDiffViewerNext, AccessibleDiffViewerPrev, CollapseAllUnchangedRegions, ExitCompareMove, RevertHunkOrSelection, ShowAllUnchangedRegions, SwitchSide, ToggleCollapseUnchangedRegions, ToggleDiffSideBySide, ToggleShowMovedCodeBlocks, ToggleUseInlineViewWhenSpaceIsLimited } from './commands.js';
 import { EditorContextKeys } from '../../../common/editorContextKeys.js';
 import { localize } from '../../../../nls.js';
 import { MenuId, MenuRegistry, registerAction2 } from '../../../../platform/actions/common/actions.js';
@@ -15,6 +15,7 @@ import './registrations.contribution.js';
 registerAction2(ToggleCollapseUnchangedRegions);
 registerAction2(ToggleShowMovedCodeBlocks);
 registerAction2(ToggleUseInlineViewWhenSpaceIsLimited);
+registerAction2(ToggleDiffSideBySide);
 
 MenuRegistry.appendMenuItem(MenuId.EditorTitle, {
 	command: {