diff --git a/src/params.rs b/src/params.rs
index 7e9cc78..40af9ea 100644
--- a/src/params.rs
+++ b/src/params.rs
@@ -1,4 +1,5 @@
 use std::ffi::{OsStr, OsString};
+use std::path::PathBuf;
 
 use regex::Regex;
 
@@ -178,6 +179,20 @@ pub fn parse_params<I: IntoIterator<Item = OsString>>(opts: I) -> Result<Params,
     } else {
         return Err(format!("Usage: {} <from> <to>", exe.to_string_lossy()));
     };
+
+    // diff DIRECTORY FILE => diff DIRECTORY/FILE FILE
+    // diff FILE DIRECTORY => diff FILE DIRECTORY/FILE
+    let mut from_path: PathBuf = PathBuf::from(&params.from);
+    let mut to_path: PathBuf = PathBuf::from(&params.to);
+
+    if from_path.is_dir() && to_path.is_file() {
+        from_path.push(to_path.file_name().unwrap());
+        params.from = from_path.into_os_string();
+    } else if from_path.is_file() && to_path.is_dir() {
+        to_path.push(from_path.file_name().unwrap());
+        params.to = to_path.into_os_string();
+    }
+
     params.format = format.unwrap_or(Format::default());
     Ok(params)
 }
diff --git a/tests/integration.rs b/tests/integration.rs
index 853ba4d..3f49af3 100644
--- a/tests/integration.rs
+++ b/tests/integration.rs
@@ -6,6 +6,7 @@
 use assert_cmd::cmd::Command;
 use diffutilslib::assert_diff_eq;
 use predicates::prelude::*;
+use std::fs::File;
 use std::io::Write;
 use tempfile::NamedTempFile;
 
@@ -234,3 +235,33 @@ fn read_from_stdin() -> Result<(), Box<dyn std::error::Error>> {
 
     Ok(())
 }
+
+#[test]
+fn read_from_directory() -> Result<(), Box<dyn std::error::Error>> {
+    let mut cmd = Command::cargo_bin("diffutils")?;
+
+    let target = "target/integration";
+    let _ = std::fs::create_dir(target);
+    let directory = &format!("{target}/d");
+    let _ = std::fs::create_dir(directory);
+    let mut a = File::create(&format!("{target}/a")).unwrap();
+    a.write_all(b"a\n").unwrap();
+    let mut da = File::create(&format!("{directory}/a")).unwrap();
+    da.write_all(b"da\n").unwrap();
+
+    cmd.arg("-u")
+        .arg(&format!("{target}/d"))
+        .arg(&format!("{target}/a"));
+    cmd.assert().code(predicate::eq(1)).failure();
+
+    let output = cmd.output().unwrap().stdout;
+    assert_diff_eq!(
+        output,
+        format!(
+            "--- {}/d/a\tTIMESTAMP\n+++ {}/a\tTIMESTAMP\n@@ -1 +1 @@\n-da\n+a\n",
+            target, target
+        )
+    );
+
+    Ok(())
+}