diff --git a/docs-internal/registry-parity-worklist.md b/docs-internal/registry-parity-worklist.md
index 86a297be21..a2385e2101 100644
--- a/docs-internal/registry-parity-worklist.md
+++ b/docs-internal/registry-parity-worklist.md
@@ -622,6 +622,20 @@ real e2e tests that prove Linux-parity behavior — not smoke tests.
     Biome is not applicable for this package test path; it reported the file is
     ignored by config in
     `2026-07-08T13-29-23-0700-item12-yq-biome-check.log`. Rev: `znlmtymu`.
+  - **diffutils — DONE.** Added package-local VM e2e coverage for the staged
+    `diff` command and fixed recursive directory output to print the compared
+    file pair before hunk output, matching the Linux `diff -r` shape. The suite
+    proves identical-file exit 0, normal and unified diffs, brief output,
+    ignore-case/whitespace/blank-line flags, recursive directory comparisons,
+    and missing-input errors through the packaged WASM command. Proof:
+    `2026-07-08T13-32-10-0700-item12-diffutils-toolchain-cmd-build.log`;
+    `2026-07-08T13-34-45-0700-item12-diffutils-package-build-after-recursive-header.log`;
+    `2026-07-08T13-35-04-0700-item12-diffutils-package-e2e-final.log`;
+    `2026-07-08T13-35-04-0700-item12-diffutils-check-types-final.log`;
+    `2026-07-08T13-35-04-0700-item12-diffutils-cargo-fmt-check-final.log`.
+    Biome is not applicable for this package test path; it reported the file is
+    ignored by config in
+    `2026-07-08T13-35-04-0700-item12-diffutils-biome-check.log`.
   - **jq — DONE.** Added package-local VM e2e coverage for the staged `jq`
     command and fixed the jaq-backed CLI wrapper to accept Linux-style file
     operands instead of only stdin. The suite now proves version output,
diff --git a/software/diffutils/bin/diff b/software/diffutils/bin/diff
index 003d074f99..ccaee62a89 100644
Binary files a/software/diffutils/bin/diff and b/software/diffutils/bin/diff differ
diff --git a/software/diffutils/native/crates/diff/src/lib.rs b/software/diffutils/native/crates/diff/src/lib.rs
index 04dbde97da..77e385a00e 100644
--- a/software/diffutils/native/crates/diff/src/lib.rs
+++ b/software/diffutils/native/crates/diff/src/lib.rs
@@ -272,6 +272,14 @@ fn diff_files(path_a: &Path, path_b: &Path, opts: &Options) -> Result<bool, Stri
         return Ok(true);
     }
 
+    if opts.recursive {
+        print_stdout_line(format_args!(
+            "diff -r {} {}",
+            path_a.display(),
+            path_b.display()
+        ))?;
+    }
+
     // Diff the original text for output (all output logic inline to avoid lifetime issues)
     let diff = TextDiff::from_lines(&text_a, &text_b);
     let label_a = format!("{}", path_a.display());
diff --git a/software/diffutils/test/diff.test.ts b/software/diffutils/test/diff.test.ts
new file mode 100644
index 0000000000..e3f175b502
--- /dev/null
+++ b/software/diffutils/test/diff.test.ts
@@ -0,0 +1,145 @@
+import { existsSync } from "node:fs";
+import { mkdir, mkdtemp, rm, writeFile } from "node:fs/promises";
+import { tmpdir } from "node:os";
+import { dirname, join } from "node:path";
+import { fileURLToPath } from "node:url";
+import {
+	NodeFileSystem,
+	createKernel,
+	createWasmVmRuntime,
+	describeIf,
+} from "@agentos/test-harness";
+import type { Kernel } from "@agentos/test-harness";
+import { afterEach, expect, it } from "vitest";
+
+const DIFF_COMMAND_DIR = fileURLToPath(new URL("../bin", import.meta.url));
+const hasDiffPackageBinary = existsSync(join(DIFF_COMMAND_DIR, "diff"));
+
+let tempRoot: string | undefined;
+
+async function writeFixture(path: string, contents: string): Promise<void> {
+	if (!tempRoot) throw new Error("fixture root not initialized");
+	const hostPath = join(tempRoot, path.replace(/^\/+/, ""));
+	await mkdir(dirname(hostPath), { recursive: true });
+	await writeFile(hostPath, contents);
+}
+
+async function createTestVFS(): Promise<NodeFileSystem> {
+	tempRoot = await mkdtemp(join(tmpdir(), "agentos-diff-"));
+	await writeFixture("/project/a.txt", "alpha\nbeta\ngamma\n");
+	await writeFixture("/project/b.txt", "alpha\ndelta\ngamma\n");
+	await writeFixture("/project/same.txt", "alpha\nbeta\ngamma\n");
+	await writeFixture("/project/ws-a.txt", "Alpha\n\nbeta value\n");
+	await writeFixture("/project/ws-b.txt", "alpha\n BETA   VALUE\n");
+	await writeFixture("/project/left/common.txt", "one\ntwo\nthree\n");
+	await writeFixture("/project/right/common.txt", "one\n2\nthree\n");
+	await writeFixture("/project/right/extra.txt", "only on right\n");
+	return new NodeFileSystem({ root: tempRoot });
+}
+
+describeIf(hasDiffPackageBinary, "diff command", { timeout: 10_000 }, () => {
+	let kernel: Kernel | undefined;
+
+	afterEach(async () => {
+		await kernel?.dispose();
+		kernel = undefined;
+		if (tempRoot) {
+			await rm(tempRoot, { recursive: true, force: true });
+			tempRoot = undefined;
+		}
+	});
+
+	async function mountFixture(): Promise<void> {
+		const vfs = await createTestVFS();
+		kernel = createKernel({ filesystem: vfs });
+		await kernel.mount(createWasmVmRuntime({ commandDirs: [DIFF_COMMAND_DIR] }));
+	}
+
+	async function runDiff(args: string[]) {
+		if (!kernel) throw new Error("kernel not mounted");
+		let stdout = "";
+		let stderr = "";
+		const proc = kernel.spawn("diff", args, {
+			onStdout: (chunk) => {
+				stdout += Buffer.from(chunk).toString("utf8");
+			},
+			onStderr: (chunk) => {
+				stderr += Buffer.from(chunk).toString("utf8");
+			},
+		});
+		const exitCode = await proc.wait();
+		await new Promise<void>((resolve) => setTimeout(resolve, 0));
+		return { stdout, stderr, exitCode };
+	}
+
+	it("returns zero for identical files", async () => {
+		await mountFixture();
+
+		const result = await runDiff(["/project/a.txt", "/project/same.txt"]);
+		expect(result.exitCode, result.stderr || result.stdout).toBe(0);
+		expect(result.stdout).toBe("");
+	});
+
+	it("prints normal diffs for changed files", async () => {
+		await mountFixture();
+
+		const result = await runDiff(["/project/a.txt", "/project/b.txt"]);
+		expect(result.exitCode).toBe(1);
+		expect(result.stdout).toContain("2c2");
+		expect(result.stdout).toContain("< beta");
+		expect(result.stdout).toContain("> delta");
+	});
+
+	it("prints unified diffs", async () => {
+		await mountFixture();
+
+		const result = await runDiff(["-u", "/project/a.txt", "/project/b.txt"]);
+		expect(result.exitCode).toBe(1);
+		expect(result.stdout).toContain("--- /project/a.txt");
+		expect(result.stdout).toContain("+++ /project/b.txt");
+		expect(result.stdout).toContain("-beta");
+		expect(result.stdout).toContain("+delta");
+	});
+
+	it("prints brief output with -q", async () => {
+		await mountFixture();
+
+		const result = await runDiff(["-q", "/project/a.txt", "/project/b.txt"]);
+		expect(result.exitCode).toBe(1);
+		expect(result.stdout.trim()).toBe(
+			"Files /project/a.txt and /project/b.txt differ",
+		);
+	});
+
+	it("honors ignore-case, whitespace, and blank-line flags", async () => {
+		await mountFixture();
+
+		const result = await runDiff([
+			"-i",
+			"-w",
+			"-B",
+			"/project/ws-a.txt",
+			"/project/ws-b.txt",
+		]);
+		expect(result.exitCode, result.stderr || result.stdout).toBe(0);
+		expect(result.stdout).toBe("");
+	});
+
+	it("compares directories recursively", async () => {
+		await mountFixture();
+
+		const result = await runDiff(["-r", "/project/left", "/project/right"]);
+		expect(result.exitCode).toBe(1);
+		expect(result.stdout).toContain("Only in /project/right: extra.txt");
+		expect(result.stdout).toContain("/project/left/common.txt");
+		expect(result.stdout).toContain("/project/right/common.txt");
+	});
+
+	it("returns an error for missing inputs", async () => {
+		await mountFixture();
+
+		const result = await runDiff(["/project/a.txt", "/project/missing.txt"]);
+		expect(result.exitCode).toBe(2);
+		expect(result.stderr).toContain("/project/missing.txt");
+	});
+});