diff --git a/lib/Caxy/HtmlDiff/AbstractDiff.php b/lib/Caxy/HtmlDiff/AbstractDiff.php
index 39cbbac..47d4199 100644
--- a/lib/Caxy/HtmlDiff/AbstractDiff.php
+++ b/lib/Caxy/HtmlDiff/AbstractDiff.php
@@ -19,6 +19,7 @@ abstract class AbstractDiff
     protected $specialCaseTags;
     protected $specialCaseChars;
     protected $groupDiffs;
+    protected $matchThreshold = 80;
 
     public function __construct($oldText, $newText, $encoding = 'UTF-8', $specialCaseTags = null, $groupDiffs = null)
     {
@@ -39,6 +40,28 @@ public function __construct($oldText, $newText, $encoding = 'UTF-8', $specialCas
         $this->setSpecialCaseChars(static::$defaultSpecialCaseChars);
     }
 
+    /**
+     * @return int
+     */
+    public function getMatchThreshold()
+    {
+        return $this->matchThreshold;
+    }
+
+    /**
+     * @param int $matchThreshold
+     *
+     * @return AbstractDiff
+     */
+    public function setMatchThreshold($matchThreshold)
+    {
+        $this->matchThreshold = $matchThreshold;
+
+        return $this;
+    }
+
+
+
     public function setSpecialCaseChars(array $chars)
     {
         $this->specialCaseChars = $chars;
diff --git a/lib/Caxy/HtmlDiff/HtmlDiff.php b/lib/Caxy/HtmlDiff/HtmlDiff.php
index 394c59b..915a331 100644
--- a/lib/Caxy/HtmlDiff/HtmlDiff.php
+++ b/lib/Caxy/HtmlDiff/HtmlDiff.php
@@ -215,7 +215,9 @@ protected function diffElements($oldText, $newText, $stripWrappingTags = true)
 
     protected function diffList($oldText, $newText)
     {
-        $diff = new ListDiff($oldText, $newText, $this->encoding, $this->specialCaseTags, $this->groupDiffs);
+        $diff = new ListDiffNew($oldText, $newText, $this->encoding, $this->specialCaseTags, $this->groupDiffs);
+        $diff->setMatchThreshold($this->matchThreshold);
+
         return $diff->build();
     }
 
diff --git a/lib/Caxy/HtmlDiff/ListDiff/DiffList.php b/lib/Caxy/HtmlDiff/ListDiff/DiffList.php
new file mode 100644
index 0000000..bed9eb8
--- /dev/null
+++ b/lib/Caxy/HtmlDiff/ListDiff/DiffList.php
@@ -0,0 +1,102 @@
+<?php
+
+namespace Caxy\HtmlDiff\ListDiff;
+
+class DiffList
+{
+    protected $listType;
+
+    protected $listItems = array();
+
+    protected $attributes = array();
+
+    protected $startTag;
+
+    protected $endTag;
+
+    public function __construct($listType, $startTag, $endTag, $listItems = array(), $attributes = array())
+    {
+        $this->listType = $listType;
+        $this->startTag = $startTag;
+        $this->endTag = $endTag;
+        $this->listItems = $listItems;
+        $this->attributes = $attributes;
+    }
+
+    /**
+     * @return mixed
+     */
+    public function getListType()
+    {
+        return $this->listType;
+    }
+
+    /**
+     * @param mixed $listType
+     *
+     * @return DiffList
+     */
+    public function setListType($listType)
+    {
+        $this->listType = $listType;
+
+        return $this;
+    }
+
+    /**
+     * @return mixed
+     */
+    public function getStartTag()
+    {
+        return $this->startTag;
+    }
+
+    public function getStartTagWithDiffClass($class = 'diff-list')
+    {
+        return str_replace('>', ' class="'.$class.'">', $this->startTag);
+    }
+
+    /**
+     * @param mixed $startTag
+     */
+    public function setStartTag($startTag)
+    {
+        $this->startTag = $startTag;
+    }
+
+    /**
+     * @return mixed
+     */
+    public function getEndTag()
+    {
+        return $this->endTag;
+    }
+
+    /**
+     * @param mixed $endTag
+     */
+    public function setEndTag($endTag)
+    {
+        $this->endTag = $endTag;
+    }
+
+    /**
+     * @return mixed
+     */
+    public function getListItems()
+    {
+        return $this->listItems;
+    }
+
+    /**
+     * @param mixed $listItems
+     *
+     * @return DiffList
+     */
+    public function setListItems($listItems)
+    {
+        $this->listItems = $listItems;
+
+        return $this;
+    }
+}
\ No newline at end of file
diff --git a/lib/Caxy/HtmlDiff/ListDiff/DiffListItem.php b/lib/Caxy/HtmlDiff/ListDiff/DiffListItem.php
new file mode 100644
index 0000000..da7272f
--- /dev/null
+++ b/lib/Caxy/HtmlDiff/ListDiff/DiffListItem.php
@@ -0,0 +1,124 @@
+<?php
+
+namespace Caxy\HtmlDiff\ListDiff;
+
+class DiffListItem
+{
+    protected $attributes = array();
+
+    protected $text;
+
+    protected $startTag;
+
+    protected $endTag;
+
+    public function __construct($text, $attributes = array(), $startTag, $endTag)
+    {
+        $this->text = $text;
+        $this->attributes = $attributes;
+        $this->startTag = $startTag;
+        $this->endTag = $endTag;
+    }
+
+    /**
+     * @return array
+     */
+    public function getAttributes()
+    {
+        return $this->attributes;
+    }
+
+    /**
+     * @param array $attributes
+     *
+     * @return DiffListItem
+     */
+    public function setAttributes($attributes)
+    {
+        $this->attributes = $attributes;
+
+        return $this;
+    }
+
+    /**
+     * @return mixed
+     */
+    public function getText()
+    {
+        return $this->text;
+    }
+
+    /**
+     * @param mixed $text
+     *
+     * @return DiffListItem
+     */
+    public function setText($text)
+    {
+        $this->text = $text;
+
+        return $this;
+    }
+
+    /**
+     * @return mixed
+     */
+    public function getStartTag()
+    {
+        return $this->startTag;
+    }
+
+    public function getStartTagWithDiffClass($class = 'normal')
+    {
+        return str_replace('>', ' class="'.$class.'">', $this->startTag);
+    }
+
+    /**
+     * @param mixed $startTag
+     *
+     * @return DiffListItem
+     */
+    public function setStartTag($startTag)
+    {
+        $this->startTag = $startTag;
+
+        return $this;
+    }
+
+    /**
+     * @return mixed
+     */
+    public function getEndTag()
+    {
+        return $this->endTag;
+    }
+
+    /**
+     * @param mixed $endTag
+     *
+     * @return DiffListItem
+     */
+    public function setEndTag($endTag)
+    {
+        $this->endTag = $endTag;
+
+        return $this;
+    }
+
+    public function getHtml($class = 'normal', $wrapTag = null)
+    {
+        $startWrap = $wrapTag ? sprintf('<%s>', $wrapTag) : '';
+        $endWrap = $wrapTag ? sprintf('</%s>', $wrapTag) : '';
+        return sprintf('%s%s%s%s%s', $this->getStartTagWithDiffClass($class), $startWrap, $this->getInnerHtml(), $endWrap, $this->endTag);
+    }
+
+    public function getInnerHtml()
+    {
+        return implode('', $this->text);
+    }
+
+    public function __toString()
+    {
+        return $this->getHtml();
+    }
+}
\ No newline at end of file
diff --git a/lib/Caxy/HtmlDiff/ListDiffNew.php b/lib/Caxy/HtmlDiff/ListDiffNew.php
new file mode 100644
index 0000000..c3cc57c
--- /dev/null
+++ b/lib/Caxy/HtmlDiff/ListDiffNew.php
@@ -0,0 +1,246 @@
+<?php
+
+namespace Caxy\HtmlDiff;
+
+use Caxy\HtmlDiff\ListDiff\DiffList;
+use Caxy\HtmlDiff\ListDiff\DiffListItem;
+
+class ListDiffNew extends AbstractDiff
+{
+    protected static $listTypes = array('ul', 'ol', 'dl');
+
+    public function build()
+    {
+        $this->splitInputsToWords();
+
+        return $this->diffLists(
+            $this->buildDiffList($this->oldWords),
+            $this->buildDiffList($this->newWords)
+        );
+    }
+
+    protected function diffLists(DiffList $oldList, DiffList $newList)
+    {
+        $oldMatchData = array();
+        $newMatchData = array();
+        $oldListIndices = array();
+        $newListIndices = array();
+        $oldListItems = array();
+        $newListItems = array();
+
+        foreach ($oldList->getListItems() as $oldIndex => $oldListItem) {
+            if ($oldListItem instanceof DiffListItem) {
+                $oldListItems[$oldIndex] = $oldListItem;
+
+                $oldListIndices[] = $oldIndex;
+                $oldMatchData[$oldIndex] = array();
+
+                // Get match percentages
+                foreach ($newList->getListItems() as $newIndex => $newListItem) {
+                    if ($newListItem instanceof DiffListItem) {
+                        if (!in_array($newListItem, $newListItems)) {
+                            $newListItems[$newIndex] = $newListItem;
+                        }
+                        if (!in_array($newIndex, $newListIndices)) {
+                            $newListIndices[] = $newIndex;
+                        }
+                        if (!array_key_exists($newIndex, $newMatchData)) {
+                            $newMatchData[$newIndex] = array();
+                        }
+
+                        $oldText = implode('', $oldListItem->getText());
+                        $newText = implode('', $newListItem->getText());
+
+                        // similar_text
+                        $percentage = null;
+                        similar_text($oldText, $newText, $percentage);
+
+                        $oldMatchData[$oldIndex][$newIndex] = $percentage;
+                        $newMatchData[$newIndex][$oldIndex] = $percentage;
+                    }
+                }
+            }
+        }
+
+        $currentIndexInOld = 0;
+        $currentIndexInNew = 0;
+        $oldCount = count($oldListIndices);
+        $newCount = count($newListIndices);
+        $difference = max($oldCount, $newCount) - min($oldCount, $newCount);
+
+        $diffOutput = '';
+
+        foreach ($newList->getListItems() as $newIndex => $newListItem) {
+            if ($newListItem instanceof DiffListItem) {
+                $operation = null;
+
+                $oldListIndex = array_key_exists($currentIndexInOld, $oldListIndices) ? $oldListIndices[$currentIndexInOld] : null;
+                $class = 'normal';
+
+                if (null !== $oldListIndex && array_key_exists($oldListIndex, $oldMatchData)) {
+                    // Check percentage matches of upcoming list items in old.
+                    $matchPercentage = $oldMatchData[$oldListIndex][$newIndex];
+
+                    // does the old list item match better?
+                    $otherMatchBetter = false;
+                    foreach ($oldMatchData[$oldListIndex] as $index => $percentage) {
+                        if ($index > $newIndex && $percentage > $matchPercentage) {
+                            $otherMatchBetter = $index;
+                        }
+                    }
+
+                    if (false !== $otherMatchBetter && $newCount > $oldCount && $difference > 0) {
+                        $diffOutput .= sprintf('%s', $newListItem->getHtml('normal new', 'ins'));
+                        $currentIndexInNew++;
+                        $difference--;
+
+                        continue;
+                    }
+
+                    $nextOldListIndex = array_key_exists($currentIndexInOld + 1, $oldListIndices) ? $oldListIndices[$currentIndexInOld + 1] : null;
+
+                    $replacement = false;
+
+                    if ($nextOldListIndex !== null && $oldMatchData[$nextOldListIndex][$newIndex] > $matchPercentage && $oldMatchData[$nextOldListIndex][$newIndex] > $this->matchThreshold) {
+                        // Following list item in old is better match, use that.
+                        $diffOutput .= sprintf('%s', $oldListItems[$oldListIndex]->getHtml('removed', 'del'));
+
+                        $currentIndexInOld++;
+                        $oldListIndex = $nextOldListIndex;
+                        $matchPercentage = $oldMatchData[$oldListIndex];
+                        $replacement = true;
+                    }
+
+                    if ($matchPercentage > $this->matchThreshold || $currentIndexInNew === $currentIndexInOld) {
+                        // Diff the two lists.
+                        $htmlDiff = new HtmlDiff($oldListItems[$oldListIndex]->getInnerHtml(), $newListItem->getInnerHtml(), $this->encoding, $this->specialCaseTags, $this->groupDiffs);
+                        $diffContent = $htmlDiff->build();
+
+                        $diffOutput .= sprintf('%s%s%s', $newListItem->getStartTagWithDiffClass($replacement ? 'replacement' : 'normal'), $diffContent, $newListItem->getEndTag());
+
+                    } else {
+                        $diffOutput .= sprintf('%s', $oldListItems[$oldListIndex]->getHtml('removed', 'del'));
+                        $diffOutput .= sprintf('%s', $newListItem->getHtml('replacement', 'ins'));
+                    }
+                    $currentIndexInOld++;
+                } else {
+                    $diffOutput .= sprintf('%s', $newListItem->getHtml('normal new', 'ins'));
+                }
+
+                $currentIndexInNew++;
+            }
+        }
+
+        // Output any additional list items
+        while (array_key_exists($currentIndexInOld, $oldListIndices)) {
+            $oldListIndex = $oldListIndices[$currentIndexInOld];
+            $diffOutput .= sprintf('%s', $oldListItems[$oldListIndex]->getHtml('removed', 'del'));
+            $currentIndexInOld++;
+        }
+
+        return sprintf('%s%s%s', $newList->getStartTagWithDiffClass(), $diffOutput, $newList->getEndTag());
+    }
+
+    protected function buildDiffList($words)
+    {
+        $listType = null;
+        $listStartTag = null;
+        $listEndTag = null;
+        $attributes = array();
+        $openLists = 0;
+        $openListItems = 0;
+        $list = array();
+        $currentListItem = null;
+        $listItemType = null;
+        $listItemStart = null;
+        $listItemEnd = null;
+
+        foreach ($words as $i => $word) {
+            if ($this->isOpeningListTag($word, $listType)) {
+                if ($openLists > 0) {
+                    if ($openListItems > 0) {
+                        $currentListItem[] = $word;
+                    } else {
+                        $list[] = $word;
+                    }
+                } else {
+                    $listType = substr($word, 1, 2);
+                    $listStartTag = $word;
+                }
+
+                $openLists++;
+            } elseif ($this->isClosingListTag($word, $listType)) {
+                if ($openLists > 1) {
+                    if ($openListItems > 0) {
+                        $currentListItem[] = $word;
+                    } else {
+                        $list[] = $word;
+                    }
+                } else {
+                    $listEndTag = $word;
+                }
+
+                $openLists--;
+            } elseif ($this->isOpeningListItemTag($word, $listItemType)) {
+                if ($openListItems === 0) {
+                    // New top-level list item
+                    $currentListItem = array();
+                    $listItemType = substr($word, 1, 2);
+                    $listItemStart = $word;
+                } else {
+                    $currentListItem[] = $word;
+                }
+
+                $openListItems++;
+            } elseif ($this->isClosingListItemTag($word, $listItemType)) {
+                if ($openListItems === 1) {
+                    $listItemEnd = $word;
+                    $listItem = new DiffListItem($currentListItem, array(), $listItemStart, $listItemEnd);
+                    $list[] = $listItem;
+                    $currentListItem = null;
+                } else {
+                    $currentListItem[] = $word;
+                }
+
+                $openListItems--;
+            } else {
+                if ($openListItems > 0) {
+                    $currentListItem[] = $word;
+                } else {
+                    $list[] = $word;
+                }
+            }
+        }
+
+        $diffList = new DiffList($listType, $listStartTag, $listEndTag, $list, $attributes);
+
+        return $diffList;
+    }
+
+    protected function isOpeningListTag($word, $type = null)
+    {
+        $filter = $type !== null ? array('<' . $type) : array('<ul', '<ol', '<dl');
+        return in_array(substr($word, 0, 3), $filter);
+    }
+
+    protected function isClosingListTag($word, $type = null)
+    {
+        $filter = $type !== null ? array('</' . $type) : array('</ul', '</ol', '</dl');
+
+        return in_array(substr($word, 0, 4), $filter);
+    }
+
+    protected function isOpeningListItemTag($word, $type = null)
+    {
+        $filter = $type !== null ? array('<' . $type) : array('<li', '<dd', '<dt');
+
+        return in_array(substr($word, 0, 3), $filter);
+    }
+
+    protected function isClosingListItemTag($word, $type = null)
+    {
+        $filter = $type !== null ? array('</' . $type) : array('</li', '</dd', '</dt');
+
+        return in_array(substr($word, 0, 4), $filter);
+    }
+}