diff --git a/src/CodeDiff.jl b/src/CodeDiff.jl
index be1d070..73f846b 100644
--- a/src/CodeDiff.jl
+++ b/src/CodeDiff.jl
@@ -18,8 +18,11 @@ Fancy REPL output is done with [`side_by_side_diff`](@ref).
 struct CodeDiff <: DeepDiffs.DeepDiff
     before::String
     after::String
-    changed::Dict{Int, Tuple{Vector{Int}, DeepDiffs.StringDiff}}  # line idx => (line idxs added before the change, change diff)
-    ignore_added::Set{Int}  # Line idxs which are part of `changed`, including line idxs added before changes
+    # line idx => (line idxs added before the change, line after change, change diff)
+    changed::Dict{Int, Tuple{Vector{Int}, Int, DeepDiffs.StringDiff}}
+    # Line idxs which are part of `changed`, including line idxs added before changes
+    ignore_added::Set{Int}
+    # Line by line diff, without highlighting
     diff::DeepDiffs.VectorDiff
     highlighted_before::String
     highlighted_after::String
@@ -67,7 +70,7 @@ function Base.show(io::IO, diff::CodeDiff)
             printstyled(io, "~ ", color=:yellow)
             io_buf = IOBuffer()
             io_ctx = IOContext(io_buf, io)
-            Base.show(io_ctx, diff.changed[idx][2])
+            Base.show(io_ctx, diff.changed[idx][3])
             printstyled(io, String(take!(io_buf))[2:end-1])  # unquote the line diff
         else
             print(io, "  ", xlines[idx])
@@ -105,8 +108,9 @@ function optimize_line_changes!(diff::CodeDiff; dist=StringDistances.Levenshtein
             changed = false
             for (li, removed_line) in enumerate(previously_removed[removed_start:end])
                 if StringDistances.compare(xlines[removed_line], ylines[idx], dist) ≥ tol
-                    # `(lines added before this changed line, change diff)`
-                    diff.changed[removed_line] = (copy(added_before), DeepDiffs.deepdiff(xlines[removed_line], ylines[idx]))
+                    # `(lines added before this changed line, ylines idx, change diff)`
+                    diff.changed[removed_line] =
+                        (copy(added_before), idx, DeepDiffs.deepdiff(xlines[removed_line], ylines[idx]))
                     if !isempty(added_before)
                         push!(diff.ignore_added, added_before...)
                         empty!(added_before)
@@ -134,7 +138,7 @@ function DeepDiffs.visitall(f, diff::CodeDiff)
     DeepDiffs.visitall(diff.diff) do idx, state, last
         if state == :removed
             if haskey(diff.changed, idx)
-                added_lines_before, _ = diff.changed[idx]
+                added_lines_before, _, _ = diff.changed[idx]
                 for line_idx in added_lines_before
                     f(line_idx, :added, false)
                 end
diff --git a/src/display.jl b/src/display.jl
index c389945..f999f34 100644
--- a/src/display.jl
+++ b/src/display.jl
@@ -39,7 +39,9 @@ function print_columns(io, width, left_line, sep, right_line, empty_line, tab_re
 end
 
 
-function print_columns_change(io, width, line_diff, highlighted_left, sep, empty_line, tab_replacement)
+function print_columns_change(
+    io, width, line_diff, highlighted_left, highlighted_right, sep, empty_line, tab_replacement
+)
     wio = TextWidthLimiter(IOBuffer(), width)
     wio_ctx = IOContext(wio, io)
 
@@ -52,7 +54,7 @@ function print_columns_change(io, width, line_diff, highlighted_left, sep, empty
 
     printstyled(io, sep)
 
-    printstyled_code_line_diff(wio_ctx, line_diff, highlighted_left, false, tab_replacement)
+    printstyled_code_line_diff(wio_ctx, line_diff, highlighted_right, false, tab_replacement)
     right_len = wio.width
     printstyled(io, String(take!(wio)))
     if right_len < width
@@ -62,8 +64,8 @@ function print_columns_change(io, width, line_diff, highlighted_left, sep, empty
 end
 
 
-function next_ansi_sequence(str, idx, str_len)
-    m = (1 ≤ idx ≤ str_len) ? match(ANSI_REGEX, str, idx) : nothing
+function next_ansi_sequence(str, idx)
+    m = (1 ≤ idx ≤ ncodeunits(str)) ? match(ANSI_REGEX, str, idx) : nothing
     if m === nothing
         return typemax(idx), ""
     else
@@ -82,9 +84,10 @@ const ANSI_GREEN_FGR = "\e[32m"
 
 
 function printstyled_code_line_diff(
-    io::IO, diff::DeepDiffs.StringDiff, highlighted_left, removed_only::Bool,
+    io::IO, diff::DeepDiffs.StringDiff, highlighted_side, removed_only::Bool,
     tab_replacement
 )
+    # Vectors of `Char`
     xchars = DeepDiffs.before(diff.diff)
     ychars = DeepDiffs.after(diff.diff)
 
@@ -98,38 +101,46 @@ function printstyled_code_line_diff(
         added_bkg_color = ""
     end
 
-    hl_length = length(highlighted_left)
-    idx_before_next_ansi, ansi_seq = next_ansi_sequence(highlighted_left, 1, hl_length)
+    idx_before_next_ansi, ansi_seq = next_ansi_sequence(highlighted_side, 1)
     highlighted_offset = 0
+    cu_idx = 0
 
     full_tab_len = length(tab_replacement)
     column_pos = 1
     tmp_io = IOBuffer()
     prev_state = :same
     DeepDiffs.visitall(diff.diff) do idx, state, _
-        if idx + highlighted_offset ≥ idx_before_next_ansi
-            write(tmp_io, ansi_seq)
-            if prev_state !== :same && occursin("\e[0m", ansi_seq)
-                prev_state = :same
-            end
-            highlighted_offset += length(ansi_seq)
-            idx_before_next_ansi, ansi_seq =
-                next_ansi_sequence(highlighted_left, idx + highlighted_offset, hl_length)
-        end
+        # `idx` is a character index, not a code unit index
 
         if state === :removed
             !removed_only && return
-            prev_state !== :removed && write(tmp_io, removed_bkg_color)
             c = xchars[idx]
         elseif state === :added
             removed_only && return
-            prev_state !== :added && write(tmp_io, added_bkg_color)
             c = ychars[idx]
         else
-            prev_state !== :same && write(tmp_io, default_bkg)
             c = xchars[idx]
         end
 
+        cu_idx += ncodeunits(c)  # `cu_idx` is `idx` in code units
+
+        if cu_idx + highlighted_offset ≥ idx_before_next_ansi 
+            write(tmp_io, ansi_seq)
+            if prev_state !== :same && occursin("\e[0m", ansi_seq)
+                prev_state = :same  # this will make sure the next char will have the right background 
+            end
+            highlighted_offset += ncodeunits(ansi_seq)
+            idx_before_next_ansi, ansi_seq =
+                next_ansi_sequence(highlighted_side, idx_before_next_ansi + ncodeunits(ansi_seq))
+        end
+
+        if state !== prev_state
+            if     state === :removed  write(tmp_io, removed_bkg_color)
+            elseif state === :added    write(tmp_io, added_bkg_color)
+            else#= state === :same =#  write(tmp_io, default_bkg)
+            end
+        end
+
         if c == '\t'
             tab_len = full_tab_len - mod(column_pos - 1, full_tab_len)
             write(tmp_io, @view(tab_replacement[1:tab_len]))
@@ -143,7 +154,7 @@ function printstyled_code_line_diff(
     end
 
     prev_state !== :same && write(tmp_io, default_bkg)
-    write(tmp_io, @view highlighted_left[idx_before_next_ansi:end])
+    write(tmp_io, @view highlighted_side[idx_before_next_ansi:end])
 
     printstyled(io, String(take!(tmp_io)))
 end
@@ -230,8 +241,8 @@ function side_by_side_diff(io::IO, diff::CodeDiff; tab_width=4, width=nothing, l
             print_line_num(:right)
         elseif state === :changed
             print_line_num(:left)
-            _, line_diff = diff.changed[idx]
-            print_columns_change(io, column_width, line_diff, xlines[idx], sep_changed_to, empty_column, tab)
+            _, y_idx, line_diff = diff.changed[idx]
+            print_columns_change(io, column_width, line_diff, xlines[idx], ylines[y_idx], sep_changed_to, empty_column, tab)
             print_line_num(:right)
         else
             print_line_num(:left)
diff --git a/test/references/a_vs_b_COLOR.jl_ast b/test/references/a_vs_b_COLOR.jl_ast
index f185d0e..88d2f86 100644
--- a/test/references/a_vs_b_COLOR.jl_ast
+++ b/test/references/a_vs_b_COLOR.jl_ast
@@ -4,5 +4,5 @@
     f(a, b)                                               ⟪╋⟫    f(a, d)                                               
     g(c, d)                                               ⟪╋⟫    g(c, b)                                               
                                                            ┣⟫    h(x, y)                                               
-    "test"                                                ⟪╋⟫    "test2"                                               
+    "test"                                                ⟪╋⟫    "test2"                                               
 end                                                        ┃ end                                                       
\ No newline at end of file
diff --git a/test/runtests.jl b/test/runtests.jl
index d95b034..08583b6 100644
--- a/test/runtests.jl
+++ b/test/runtests.jl
@@ -99,7 +99,7 @@ function check_diff_display_order(diff::CodeDiffs.CodeDiff, order::Vector{<:Pair
             @test first(order[order_idx]) === nothing
             @test occursin(last(order[order_idx]), ylines[idx])
         elseif state === :changed
-            line_diff = diff.changed[idx][2]
+            line_diff = diff.changed[idx][3]
             @test occursin(first(order[order_idx]), line_diff.before)
             @test occursin(last(order[order_idx]), line_diff.after)
         else