diff --git a/src/main/kotlin/ee/carlrobert/codegpt/toolwindow/chat/editor/ResponseEditorPanel.kt b/src/main/kotlin/ee/carlrobert/codegpt/toolwindow/chat/editor/ResponseEditorPanel.kt
index c2ab63e0..e469484c 100644
--- a/src/main/kotlin/ee/carlrobert/codegpt/toolwindow/chat/editor/ResponseEditorPanel.kt
+++ b/src/main/kotlin/ee/carlrobert/codegpt/toolwindow/chat/editor/ResponseEditorPanel.kt
@@ -10,17 +10,22 @@ import com.intellij.openapi.editor.event.BulkAwareDocumentListener
 import com.intellij.openapi.editor.event.DocumentEvent
 import com.intellij.openapi.editor.ex.EditorEx
 import com.intellij.openapi.project.Project
+import com.intellij.openapi.application.ApplicationManager
 import com.intellij.openapi.util.Disposer
 import com.intellij.openapi.util.Key
 import com.intellij.openapi.vfs.VirtualFile
+import com.intellij.openapi.diagnostic.thisLogger
+import com.intellij.openapi.vfs.readText
 import com.intellij.util.ui.JBUI
 import com.intellij.util.ui.components.BorderLayoutPanel
+import ee.carlrobert.codegpt.codecompletions.CompletionProgressNotifier
 import ee.carlrobert.codegpt.completions.AutoApplyParameters
 import ee.carlrobert.codegpt.completions.CompletionRequestService
 import ee.carlrobert.codegpt.toolwindow.chat.editor.diff.DiffSyncManager
 import ee.carlrobert.codegpt.toolwindow.chat.editor.factory.ComponentFactory
 import ee.carlrobert.codegpt.toolwindow.chat.editor.factory.ComponentFactory.EXPANDED_KEY
 import ee.carlrobert.codegpt.toolwindow.chat.editor.factory.ComponentFactory.MIN_LINES_FOR_EXPAND
+import ee.carlrobert.codegpt.toolwindow.chat.editor.header.DiffHeaderPanel
 import ee.carlrobert.codegpt.toolwindow.chat.editor.state.EditorState
 import ee.carlrobert.codegpt.toolwindow.chat.editor.state.EditorStateManager
 import ee.carlrobert.codegpt.toolwindow.chat.parser.ReplaceWaiting
@@ -42,6 +47,7 @@ class ResponseEditorPanel(
         val RESPONSE_EDITOR_STATE_KEY = Key.create<EditorState>("proxyai.responseEditorState")
     }
 
+    private val logger = thisLogger()
     private val stateManager = EditorStateManager(project)
     private var searchReplaceHandler: SearchReplaceHandler
 
@@ -101,6 +107,66 @@ class ResponseEditorPanel(
                 responseEditorPanel.replaceEditor(oldEditor, newEditor)
             })
     }
+    
+    internal fun createReplaceWaitingSegment(searchContent: String, replaceContent: String, virtualFile: VirtualFile): ReplaceWaiting {
+        return ReplaceWaiting(
+            search = searchContent,
+            replace = replaceContent,
+            language = virtualFile.extension ?: "text",
+            filePath = virtualFile.path
+        )
+    }
+    
+    fun createDiffEditorForDirectApply(searchContent: String, replaceContent: String, virtualFile: VirtualFile) {
+        try {
+            val segment = createReplaceWaitingSegment(searchContent, "", virtualFile)
+            
+            val oldEditor = stateManager.getCurrentState()?.editor
+            if (oldEditor == null) {
+                logger.warn("No current editor state found for direct apply")
+                return
+            }
+            
+            val currentText = try {
+                virtualFile.readText()
+            } catch (e: Exception) {
+                logger.error("Failed to read file content for direct apply", e)
+                return
+            }
+            
+            val containsText = currentText.contains(segment.search.trim())
+            
+            val newState = if (containsText) {
+                stateManager.createFromSegment(segment)
+            } else {
+                stateManager.transitionToFailedDiffState(
+                    segment.search,
+                    segment.replace,
+                    virtualFile
+                ) ?: run {
+                    logger.warn("Failed to transition to failed diff state")
+                    return
+                }
+            }
+            
+            replaceEditor(oldEditor, newState.editor)
+            
+            val finalSegment = createReplaceWaitingSegment(searchContent, replaceContent, virtualFile)
+            newState.updateContent(finalSegment)
+            
+            val currentEditor = newState.editor
+            val headerPanel = currentEditor.permanentHeaderComponent as? DiffHeaderPanel
+            
+            ApplicationManager.getApplication().invokeLater {
+                if (!project.isDisposed) {
+                    headerPanel?.handleDone()
+                    CompletionProgressNotifier.update(project, false)
+                }
+            }
+        } catch (e: Exception) {
+            logger.error("Unexpected error during direct apply", e)
+        }
+    }
 
     override fun dispose() {
         val state = stateManager.getCurrentState()
diff --git a/src/main/kotlin/ee/carlrobert/codegpt/toolwindow/chat/editor/header/DefaultHeaderPanel.kt b/src/main/kotlin/ee/carlrobert/codegpt/toolwindow/chat/editor/header/DefaultHeaderPanel.kt
index e463095a..20f735b2 100644
--- a/src/main/kotlin/ee/carlrobert/codegpt/toolwindow/chat/editor/header/DefaultHeaderPanel.kt
+++ b/src/main/kotlin/ee/carlrobert/codegpt/toolwindow/chat/editor/header/DefaultHeaderPanel.kt
@@ -3,17 +3,12 @@ package ee.carlrobert.codegpt.toolwindow.chat.editor.header
 import com.intellij.icons.AllIcons
 import com.intellij.openapi.actionSystem.*
 import com.intellij.openapi.application.runInEdt
-import com.intellij.openapi.application.runUndoTransparentWriteAction
 import com.intellij.openapi.editor.ex.EditorEx
 import com.intellij.openapi.project.Project
 import com.intellij.openapi.ui.JBMenuItem
 import com.intellij.openapi.ui.JBPopupMenu
-import com.intellij.openapi.ui.MessageType
-import com.intellij.openapi.ui.popup.JBPopupFactory
 import com.intellij.openapi.vfs.readText
-import com.intellij.openapi.vfs.writeText
 import com.intellij.ui.AnimatedIcon
-import com.intellij.ui.components.AnActionLink
 import com.intellij.ui.components.JBLabel
 import com.intellij.util.ui.JBUI
 import ee.carlrobert.codegpt.CodeGPTBundle
@@ -66,7 +61,7 @@ class DefaultHeaderPanel(config: HeaderConfig) : HeaderPanel(config) {
             actionGroup.add(CopyAction(editor))
         } else {
             actionGroup.add(AutoApplyAction(project, editor, config.filePath, virtualFile) {
-                handleApply(project, editor, it)
+                handleApply(project, editor)
             })
             actionGroup.add(CopyAction(editor))
             actionGroup.addSeparator()
@@ -75,7 +70,7 @@ class DefaultHeaderPanel(config: HeaderConfig) : HeaderPanel(config) {
         return createToolbar(actionGroup)
     }
 
-    private fun handleApply(project: Project, editor: EditorEx, link: AnActionLink) {
+    private fun handleApply(project: Project, editor: EditorEx) {
         val file = virtualFile
             ?: EditorUtil.getSelectedEditor(project)?.virtualFile
             ?: throw IllegalStateException("Virtual file is null")
@@ -83,22 +78,9 @@ class DefaultHeaderPanel(config: HeaderConfig) : HeaderPanel(config) {
         val directApplyThreshold = 0.85
         val coefficient = StringUtil.getDiceCoefficient(editor.document.text, file.readText())
         if (coefficient > directApplyThreshold) {
-            runUndoTransparentWriteAction {
-                file.writeText(
-                    com.intellij.openapi.util.text.StringUtil.convertLineSeparators(
-                        editor.document.text
-                    )
-                )
-            }
-            val balloon = JBPopupFactory.getInstance()
-                .createHtmlTextBalloonBuilder(
-                    CodeGPTBundle.get("toolwindow.chat.editor.action.autoApply.successMessage"),
-                    MessageType.INFO,
-                    null
-                )
-                .setFadeoutTime(3000)
-                .createBalloon()
-            balloon.showInCenterOf(link)
+            val responseEditorPanel = editor.component.parent as? ResponseEditorPanel
+                ?: throw IllegalStateException("Could not find corresponding ResponseEditorPanel")
+            responseEditorPanel.createDiffEditorForDirectApply(file.readText(), editor.document.text, file)
             return
         }