diff --git a/runtime/doc/options.txt b/runtime/doc/options.txt
index 2c61024e84..068a2296cc 100644
--- a/runtime/doc/options.txt
+++ b/runtime/doc/options.txt
@@ -2257,9 +2257,10 @@ A jump table for the options with a short description can be found at |Q_op|.
 		internal	Use the internal diff library.  This is
 				ignored when 'diffexpr' is set.  *E960*
 				When running out of memory when writing a
-				buffer this item will be ignored for diffs
-				involving that buffer.  Set the 'verbose'
-				option to see when this happens.
+				buffer or the diff is larger than 1 GB this
+				item will be ignored for diffs involving that
+				buffer.  Set the 'verbose' option to see when
+				this happens.
 
 		iwhite		Ignore changes in amount of white space.  Adds
 				the "-b" flag to the "diff" command if
diff --git a/runtime/lua/vim/_meta/options.lua b/runtime/lua/vim/_meta/options.lua
index 0d0471c671..7befc642c5 100644
--- a/runtime/lua/vim/_meta/options.lua
+++ b/runtime/lua/vim/_meta/options.lua
@@ -1874,9 +1874,10 @@ vim.go.dex = vim.go.diffexpr
 --- 	internal	Use the internal diff library.  This is
 --- 			ignored when 'diffexpr' is set.  *E960*
 --- 			When running out of memory when writing a
---- 			buffer this item will be ignored for diffs
---- 			involving that buffer.  Set the 'verbose'
---- 			option to see when this happens.
+--- 			buffer or the diff is larger than 1 GB this
+--- 			item will be ignored for diffs involving that
+--- 			buffer.  Set the 'verbose' option to see when
+--- 			this happens.
 ---
 --- 	iwhite		Ignore changes in amount of white space.  Adds
 --- 			the "-b" flag to the "diff" command if
diff --git a/src/nvim/diff.c b/src/nvim/diff.c
index da04d37931..fe28b83529 100644
--- a/src/nvim/diff.c
+++ b/src/nvim/diff.c
@@ -103,6 +103,10 @@ static int linematch_lines = 40;
 
 #define LBUFLEN 50               // length of line in diff file
 
+// Max file size xdiff is eqipped to deal with. The value (1GB - 1MB) comes
+// from Git's implementation.
+#define MAX_XDIFF_SIZE (1024L * 1024 * 1023)
+
 // kTrue when "diff -a" works, kFalse when it doesn't work,
 // kNone when not checked yet
 static TriState diff_a_works = kNone;
@@ -1221,10 +1225,15 @@ static int diff_file_internal(diffio_T *diffio)
   emit_cfg.ctxlen = 0;  // don't need any diff_context here
   emit_cb.priv = &diffio->dio_diff;
   emit_cfg.hunk_func = xdiff_out;
+  if (diffio->dio_orig.din_mmfile.size > MAX_XDIFF_SIZE
+      || diffio->dio_new.din_mmfile.size > MAX_XDIFF_SIZE) {
+    emsg(_(e_problem_creating_internal_diff));
+    return FAIL;
+  }
   if (xdl_diff(&diffio->dio_orig.din_mmfile,
                &diffio->dio_new.din_mmfile,
                &param, &emit_cfg, &emit_cb) < 0) {
-    emsg(_("E960: Problem creating the internal diff"));
+    emsg(_(e_problem_creating_internal_diff));
     return FAIL;
   }
   return OK;
diff --git a/src/nvim/errors.h b/src/nvim/errors.h
index b63929a657..dd8d6871a0 100644
--- a/src/nvim/errors.h
+++ b/src/nvim/errors.h
@@ -165,6 +165,8 @@ EXTERN const char e_cant_find_file_str_in_path[] INIT(= N_("E345: Can't find fil
 EXTERN const char e_no_more_directory_str_found_in_cdpath[] INIT(= N_("E346: No more directory \"%s\" found in cdpath"));
 EXTERN const char e_no_more_file_str_found_in_path[] INIT(= N_("E347: No more file \"%s\" found in path"));
 
+EXTERN const char e_problem_creating_internal_diff[] INIT(= N_("E960: Problem creating the internal diff"));
+
 EXTERN const char e_cannot_define_autocommands_for_all_events[] INIT(= N_("E1155: Cannot define autocommands for ALL events"));
 EXTERN const char e_cannot_change_arglist_recursively[] INIT(= N_("E1156: Cannot change the argument list recursively"));
 
diff --git a/src/nvim/options.lua b/src/nvim/options.lua
index 50bfd6ddbb..a21f5647dd 100644
--- a/src/nvim/options.lua
+++ b/src/nvim/options.lua
@@ -2460,9 +2460,10 @@ local options = {
         	internal	Use the internal diff library.  This is
         			ignored when 'diffexpr' is set.  *E960*
         			When running out of memory when writing a
-        			buffer this item will be ignored for diffs
-        			involving that buffer.  Set the 'verbose'
-        			option to see when this happens.
+        			buffer or the diff is larger than 1 GB this
+        			item will be ignored for diffs involving that
+        			buffer.  Set the 'verbose' option to see when
+        			this happens.
 
         	iwhite		Ignore changes in amount of white space.  Adds
         			the "-b" flag to the "diff" command if