diff --git a/src/web/frontend/components/ActivityStream.e2e.test.tsx b/src/web/frontend/components/ActivityStream.e2e.test.tsx
index a3c298a..1028448 100644
--- a/src/web/frontend/components/ActivityStream.e2e.test.tsx
+++ b/src/web/frontend/components/ActivityStream.e2e.test.tsx
@@ -540,4 +540,184 @@ describe('E2E: ActivityStream Display and Scrolling', () => {
       expect(screen.getAllByText(/bd-bbb/).length).toBeGreaterThan(0);
     });
   });
+
+  describe('Edit tool inline diff rendering', () => {
+    it('should render inline diff for Edit tool events', () => {
+      const events = [
+        createMockEvent({
+          tool: 'Edit',
+          message: 'Editing file',
+          tool_args: {
+            file_path: '/src/example.ts',
+            old_string: 'const x = 1;',
+            new_string: 'const x = 2;',
+          },
+        }),
+      ];
+
+      const { container } = render(
+        <ActivityStream events={events} selectedWorker={null} />
+      );
+
+      // DiffView should be rendered within the event item
+      const diffView = container.querySelector('.event-item .diff-view');
+      expect(diffView).toBeInTheDocument();
+
+      // File path should be shown
+      expect(diffView?.textContent).toContain('/src/example.ts');
+    });
+
+    it('should show collapsed diff by default in compact mode', () => {
+      const events = [
+        createMockEvent({
+          tool: 'Edit',
+          message: 'Editing file',
+          tool_args: {
+            file_path: '/src/test.ts',
+            old_string: 'old line 1\nold line 2',
+            new_string: 'new line 1\nnew line 2',
+          },
+        }),
+      ];
+
+      const { container } = render(
+        <ActivityStream events={events} selectedWorker={null} />
+      );
+
+      const diffView = container.querySelector('.diff-view');
+      expect(diffView).toHaveClass('compact');
+
+      // Diff content should not be visible when collapsed
+      const diffContent = container.querySelector('.diff-content');
+      expect(diffContent).not.toBeInTheDocument();
+    });
+
+    it('should expand diff on toggle click', async () => {
+      const events = [
+        createMockEvent({
+          tool: 'Edit',
+          message: 'Editing file',
+          tool_args: {
+            file_path: '/src/test.ts',
+            old_string: 'old line',
+            new_string: 'new line',
+          },
+        }),
+      ];
+
+      const { container } = render(
+        <ActivityStream events={events} selectedWorker={null} />
+      );
+
+      // Initially collapsed
+      expect(container.querySelector('.diff-content')).not.toBeInTheDocument();
+
+      // Click the toggle button
+      const toggleButton = container.querySelector('.diff-toggle');
+      expect(toggleButton).toBeInTheDocument();
+      await userEvent.click(toggleButton!);
+
+      // Diff content should now be visible
+      const diffContent = container.querySelector('.diff-content');
+      expect(diffContent).toBeInTheDocument();
+
+      // Should show diff lines
+      const diffLines = container.querySelectorAll('.diff-line');
+      expect(diffLines.length).toBeGreaterThan(0);
+    });
+
+    it('should display diff summary with added/removed counts', () => {
+      const events = [
+        createMockEvent({
+          tool: 'Edit',
+          message: 'Editing file',
+          tool_args: {
+            file_path: '/src/test.ts',
+            old_string: 'line 1\nline 2\nline 3',
+            new_string: 'line 1\nline 2 modified\nline 3',
+          },
+        }),
+      ];
+
+      const { container } = render(
+        <ActivityStream events={events} selectedWorker={null} />
+      );
+
+      const diffSummary = container.querySelector('.diff-summary');
+      expect(diffSummary).toBeInTheDocument();
+      expect(diffSummary?.textContent).toMatch(/\d+ removed/);
+      expect(diffSummary?.textContent).toMatch(/\d+ added/);
+    });
+
+    it('should not render diff for non-Edit tools', () => {
+      const events = [
+        createMockEvent({
+          tool: 'Read',
+          message: 'Reading file',
+          tool_args: {
+            file_path: '/src/test.ts',
+          },
+        }),
+      ];
+
+      const { container } = render(
+        <ActivityStream events={events} selectedWorker={null} />
+      );
+
+      const diffView = container.querySelector('.event-item .diff-view');
+      expect(diffView).not.toBeInTheDocument();
+    });
+
+    it('should handle Edit events with missing diff data gracefully', () => {
+      const events = [
+        createMockEvent({
+          tool: 'Edit',
+          message: 'Editing file',
+          tool_args: {
+            file_path: '/src/test.ts',
+            // old_string and new_string missing
+          },
+        }),
+      ];
+
+      const { container } = render(
+        <ActivityStream events={events} selectedWorker={null} />
+      );
+
+      // Should not render diff view when data is incomplete
+      const diffView = container.querySelector('.event-item .diff-view');
+      expect(diffView).not.toBeInTheDocument();
+    });
+
+    it('should render multi-line diffs correctly', async () => {
+      const events = [
+        createMockEvent({
+          tool: 'Edit',
+          message: 'Multi-line edit',
+          tool_args: {
+            file_path: '/src/component.tsx',
+            old_string: 'const a = 1;\nconst b = 2;\nconst c = 3;',
+            new_string: 'const a = 1;\nconst b = 20;\nconst c = 3;',
+          },
+        }),
+      ];
+
+      const { container } = render(
+        <ActivityStream events={events} selectedWorker={null} />
+      );
+
+      // Expand the diff
+      const toggleButton = container.querySelector('.diff-toggle');
+      if (toggleButton) {
+        await userEvent.click(toggleButton);
+      }
+
+      // Check for diff line types
+      const removedLines = container.querySelectorAll('.diff-line-removed');
+      const addedLines = container.querySelectorAll('.diff-line-added');
+
+      expect(removedLines.length).toBeGreaterThan(0);
+      expect(addedLines.length).toBeGreaterThan(0);
+    });
+  });
 });