diff --git a/app/models/compare.rb b/app/models/compare.rb
index 4856510f5263360306304d6b1be45fdab2db6297..4b568a1d11c7bbfffa3e34166a49f4c4f278d5cf 100644
--- a/app/models/compare.rb
+++ b/app/models/compare.rb
@@ -11,9 +11,10 @@ class Compare
     end
   end
 
-  def initialize(compare, project)
+  def initialize(compare, project, straight = false)
     @compare = compare
     @project = project
+    @straight = straight
   end
 
   def commits
@@ -36,6 +37,8 @@ class Compare
   alias_method :commit, :head_commit
 
   def base_commit
+    return start_commit if @straight
+
     return @base_commit if defined?(@base_commit)
 
     @base_commit = if start_commit && head_commit
diff --git a/app/models/merge_request_diff.rb b/app/models/merge_request_diff.rb
index 3f7e96186a1abb679ebe4036500170c0fda03a17..0ea9e892be2e60589cfe3ff6820c3882fa8751bb 100644
--- a/app/models/merge_request_diff.rb
+++ b/app/models/merge_request_diff.rb
@@ -167,8 +167,11 @@ class MergeRequestDiff < ActiveRecord::Base
     self == merge_request.merge_request_diff
   end
 
-  def compare_with(sha)
-    CompareService.new.execute(project, head_commit_sha, project, sha)
+  def compare_with(sha, straight = true)
+    # When compare merge request versions we want diff A..B instead of A...B
+    # so we handle cases when user squash and rebase commits in one of versions.
+    # For this reason we set straight to true by default.
+    CompareService.new.execute(project, head_commit_sha, project, sha, straight)
   end
 
   private
diff --git a/app/services/compare_service.rb b/app/services/compare_service.rb
index 6d6075628af89a0c113a2f637af5b728f3009d60..6df3b958b8ae0c0ab52f363b3831a0203638303d 100644
--- a/app/services/compare_service.rb
+++ b/app/services/compare_service.rb
@@ -3,7 +3,7 @@ require 'securerandom'
 # Compare 2 branches for one repo or between repositories
 # and return Gitlab::Git::Compare object that responds to commits and diffs
 class CompareService
-  def execute(source_project, source_branch, target_project, target_branch)
+  def execute(source_project, source_branch, target_project, target_branch, straight = false)
     source_commit = source_project.commit(source_branch)
     return unless source_commit
 
@@ -23,9 +23,10 @@ class CompareService
     raw_compare = Gitlab::Git::Compare.new(
       target_project.repository.raw_repository,
       target_branch,
-      source_sha
+      source_sha,
+      straight
     )
 
-    Compare.new(raw_compare, target_project)
+    Compare.new(raw_compare, target_project, straight)
   end
 end