diff --git a/test/diff.format.test.ts b/test/diff.format.test.ts
new file mode 100644
index 0000000..8d6b87f
--- /dev/null
+++ b/test/diff.format.test.ts
@@ -0,0 +1,165 @@
+import { describe, it, expect } from "vitest";
+import { formatDiff } from "../src/diff.js";
+import type { TranscriptDiff } from "../src/diff.js";
+import type { JsonRpcMessage } from "../src/types.js";
+
+// Strip ANSI color codes so assertions do not depend on terminal color support.
+function strip(s: string): string {
+  return s.replace(/\x1b\[[0-9;]*m/g, "");
+}
+
+const EMPTY: TranscriptDiff = {
+  onlyInA: [],
+  onlyInB: [],
+  changed: [],
+  unchanged: 0,
+};
+
+const resp = (id: number, result: unknown): JsonRpcMessage => ({
+  jsonrpc: "2.0",
+  id,
+  result,
+});
+
+describe("formatDiff - identical transcripts", () => {
+  it("reports identical with 1 pair (singular)", () => {
+    const out = strip(formatDiff({ ...EMPTY, unchanged: 1 }));
+    expect(out).toContain("identical");
+    expect(out).toContain("1 pair");
+  });
+
+  it("uses plural 'pairs' for 0 unchanged", () => {
+    const out = strip(formatDiff(EMPTY));
+    expect(out).toContain("0 pairs");
+  });
+
+  it("uses plural 'pairs' for more than 1 unchanged", () => {
+    const out = strip(formatDiff({ ...EMPTY, unchanged: 4 }));
+    expect(out).toContain("4 pairs");
+  });
+});
+
+describe("formatDiff - only-in-A", () => {
+  it("shows the section header and method name", () => {
+    const diff: TranscriptDiff = {
+      ...EMPTY,
+      onlyInA: [{ method: "tools/call", paramsCanonical: '{"name":"search"}' }],
+    };
+    const out = strip(formatDiff(diff));
+    expect(out).toContain("Only in A");
+    expect(out).toContain("tools/call");
+  });
+
+  it("shows the canonical params", () => {
+    const diff: TranscriptDiff = {
+      ...EMPTY,
+      onlyInA: [{ method: "x", paramsCanonical: '{"q":"hello"}' }],
+    };
+    const out = strip(formatDiff(diff));
+    expect(out).toContain('"q":"hello"');
+  });
+
+  it("uses custom label in section header", () => {
+    const diff: TranscriptDiff = {
+      ...EMPTY,
+      onlyInA: [{ method: "x", paramsCanonical: "{}" }],
+    };
+    const out = strip(formatDiff(diff, "v1", "v2"));
+    expect(out).toContain("Only in v1");
+    expect(out).not.toContain("Only in A");
+  });
+});
+
+describe("formatDiff - only-in-B", () => {
+  it("shows the section header and method name", () => {
+    const diff: TranscriptDiff = {
+      ...EMPTY,
+      onlyInB: [{ method: "resources/list", paramsCanonical: "{}" }],
+    };
+    const out = strip(formatDiff(diff));
+    expect(out).toContain("Only in B");
+    expect(out).toContain("resources/list");
+  });
+
+  it("uses custom label in section header", () => {
+    const diff: TranscriptDiff = {
+      ...EMPTY,
+      onlyInB: [{ method: "x", paramsCanonical: "{}" }],
+    };
+    const out = strip(formatDiff(diff, "old", "new"));
+    expect(out).toContain("Only in new");
+    expect(out).not.toContain("Only in B");
+  });
+});
+
+describe("formatDiff - changed responses", () => {
+  const before = resp(1, { count: 1 });
+  const after = resp(1, { count: 2 });
+
+  it("shows the section header and method name", () => {
+    const diff: TranscriptDiff = {
+      ...EMPTY,
+      changed: [{ method: "tools/call", paramsCanonical: "{}", before, after }],
+    };
+    const out = strip(formatDiff(diff));
+    expect(out).toContain("Changed responses");
+    expect(out).toContain("tools/call");
+  });
+
+  it("shows before and after response content", () => {
+    const diff: TranscriptDiff = {
+      ...EMPTY,
+      changed: [{ method: "tools/call", paramsCanonical: "{}", before, after }],
+    };
+    const out = strip(formatDiff(diff));
+    expect(out).toContain('"count":1');
+    expect(out).toContain('"count":2');
+  });
+});
+
+describe("formatDiff - summary line", () => {
+  it("includes all four counts", () => {
+    const diff: TranscriptDiff = {
+      onlyInA: [{ method: "a", paramsCanonical: "{}" }],
+      onlyInB: [{ method: "b", paramsCanonical: "{}" }],
+      changed: [{ method: "c", paramsCanonical: "{}", before: resp(1, 1), after: resp(1, 2) }],
+      unchanged: 5,
+    };
+    const out = strip(formatDiff(diff));
+    expect(out).toContain("1 changed");
+    expect(out).toContain("5 unchanged");
+  });
+
+  it("uses custom labels in summary line", () => {
+    const diff: TranscriptDiff = {
+      ...EMPTY,
+      onlyInA: [{ method: "x", paramsCanonical: "{}" }],
+    };
+    const out = strip(formatDiff(diff, "alpha", "beta"));
+    expect(out).toContain("alpha");
+    expect(out).toContain("beta");
+  });
+});
+
+describe("formatDiff - truncation", () => {
+  it("truncates paramsCanonical longer than 80 chars", () => {
+    const long = "x".repeat(200);
+    const diff: TranscriptDiff = {
+      ...EMPTY,
+      onlyInA: [{ method: "m", paramsCanonical: long }],
+    };
+    const out = strip(formatDiff(diff));
+    expect(out).toContain("…");
+  });
+
+  it("does not truncate params within the 80-char limit", () => {
+    const short = '{"q":"hello"}';
+    const diff: TranscriptDiff = {
+      ...EMPTY,
+      onlyInA: [{ method: "m", paramsCanonical: short }],
+    };
+    const out = strip(formatDiff(diff));
+    expect(out).toContain(short);
+    expect(out).not.toContain("…");
+  });
+});