diff --git a/app/assets/javascripts/diffs/components/app.vue b/app/assets/javascripts/diffs/components/app.vue
index 59680959bb1..9c0f72f177f 100644
--- a/app/assets/javascripts/diffs/components/app.vue
+++ b/app/assets/javascripts/diffs/components/app.vue
@@ -223,7 +223,10 @@ export default {
         :commit="commit"
       />
 
-      <div class="files d-flex prepend-top-default">
+      <div
+        :data-can-create-note="getNoteableData.current_user.can_create_note"
+        class="files d-flex prepend-top-default"
+      >
         <div
           v-show="showTreeList"
           class="diff-tree-list"
diff --git a/app/assets/javascripts/diffs/components/diff_content.vue b/app/assets/javascripts/diffs/components/diff_content.vue
index fb5556e3cd7..547742a5ff4 100644
--- a/app/assets/javascripts/diffs/components/diff_content.vue
+++ b/app/assets/javascripts/diffs/components/diff_content.vue
@@ -1,15 +1,22 @@
 <script>
-import { mapGetters, mapState } from 'vuex';
+import { mapActions, mapGetters, mapState } from 'vuex';
 import DiffViewer from '~/vue_shared/components/diff_viewer/diff_viewer.vue';
-import { diffModes } from '~/ide/constants';
 import InlineDiffView from './inline_diff_view.vue';
 import ParallelDiffView from './parallel_diff_view.vue';
+import NoteForm from '../../notes/components/note_form.vue';
+import ImageDiffOverlay from './image_diff_overlay.vue';
+import DiffDiscussions from './diff_discussions.vue';
+import { IMAGE_DIFF_POSITION_TYPE } from '../constants';
+import { getDiffMode } from '../store/utils';
 
 export default {
   components: {
     InlineDiffView,
     ParallelDiffView,
     DiffViewer,
+    NoteForm,
+    DiffDiscussions,
+    ImageDiffOverlay,
   },
   props: {
     diffFile: {
@@ -23,13 +30,38 @@ export default {
       endpoint: state => state.diffs.endpoint,
     }),
     ...mapGetters('diffs', ['isInlineView', 'isParallelView']),
+    ...mapGetters('diffs', ['getCommentFormForDiffFile']),
+    ...mapGetters(['getNoteableData', 'noteableType']),
     diffMode() {
-      const diffModeKey = Object.keys(diffModes).find(key => this.diffFile[`${key}File`]);
-      return diffModes[diffModeKey] || diffModes.replaced;
+      return getDiffMode(this.diffFile);
     },
     isTextFile() {
       return this.diffFile.viewer.name === 'text';
     },
+    diffFileCommentForm() {
+      return this.getCommentFormForDiffFile(this.diffFile.fileHash);
+    },
+    showNotesContainer() {
+      return this.diffFile.discussions.length || this.diffFileCommentForm;
+    },
+  },
+  methods: {
+    ...mapActions('diffs', ['saveDiffDiscussion', 'closeDiffFileCommentForm']),
+    handleSaveNote(note) {
+      this.saveDiffDiscussion({
+        note,
+        formData: {
+          noteableData: this.getNoteableData,
+          noteableType: this.noteableType,
+          diffFile: this.diffFile,
+          positionType: IMAGE_DIFF_POSITION_TYPE,
+          x: this.diffFileCommentForm.x,
+          y: this.diffFileCommentForm.y,
+          width: this.diffFileCommentForm.width,
+          height: this.diffFileCommentForm.height,
+        },
+      });
+    },
   },
 };
 </script>
@@ -56,7 +88,37 @@ export default {
         :new-sha="diffFile.diffRefs.headSha"
         :old-path="diffFile.oldPath"
         :old-sha="diffFile.diffRefs.baseSha"
-        :project-path="projectPath"/>
+        :file-hash="diffFile.fileHash"
+        :project-path="projectPath"
+      >
+        <image-diff-overlay
+          slot="image-overlay"
+          :discussions="diffFile.discussions"
+          :file-hash="diffFile.fileHash"
+          :can-comment="getNoteableData.current_user.can_create_note"
+        />
+        <div
+          v-if="showNotesContainer"
+          class="note-container"
+        >
+          <diff-discussions
+            v-if="diffFile.discussions.length"
+            class="diff-file-discussions"
+            :discussions="diffFile.discussions"
+            :should-collapse-discussions="true"
+            :render-avatar-badge="true"
+          />
+          <note-form
+            v-if="diffFileCommentForm"
+            ref="noteForm"
+            :is-editing="false"
+            :save-button-title="__('Comment')"
+            class="diff-comment-form new-note discussion-form discussion-form-container"
+            @handleFormUpdate="handleSaveNote"
+            @cancelForm="closeDiffFileCommentForm(diffFile.fileHash)"
+          />          
+        </div>
+      </diff-viewer>
     </div>
   </div>
 </template>
diff --git a/app/assets/javascripts/diffs/components/diff_discussions.vue b/app/assets/javascripts/diffs/components/diff_discussions.vue
index cddbe554fbd..e19207bdc95 100644
--- a/app/assets/javascripts/diffs/components/diff_discussions.vue
+++ b/app/assets/javascripts/diffs/components/diff_discussions.vue
@@ -1,24 +1,40 @@
 <script>
 import { mapActions } from 'vuex';
+import Icon from '~/vue_shared/components/icon.vue';
 import noteableDiscussion from '../../notes/components/noteable_discussion.vue';
 
 export default {
   components: {
     noteableDiscussion,
+    Icon,
   },
   props: {
     discussions: {
       type: Array,
       required: true,
     },
+    shouldCollapseDiscussions: {
+      type: Boolean,
+      required: false,
+      default: false,
+    },
+    renderAvatarBadge: {
+      type: Boolean,
+      required: false,
+      default: false,
+    },
   },
   methods: {
+    ...mapActions(['toggleDiscussion']),
     ...mapActions('diffs', ['removeDiscussionsFromDiff']),
     deleteNoteHandler(discussion) {
       if (discussion.notes.length <= 1) {
         this.removeDiscussionsFromDiff(discussion);
       }
     },
+    isExpanded(discussion) {
+      return this.shouldCollapseDiscussions ? discussion.expanded : true;
+    },
   },
 };
 </script>
@@ -26,22 +42,54 @@ export default {
 <template>
   <div>
     <div
-      v-for="discussion in discussions"
+      v-for="(discussion, index) in discussions"
       :key="discussion.id"
-      class="discussion-notes diff-discussions"
+      :class="{
+        collapsed: !isExpanded(discussion)
+      }"
+      class="discussion-notes diff-discussions position-relative"
     >
       <ul
         :data-discussion-id="discussion.id"
         class="notes"
       >
+        <template v-if="shouldCollapseDiscussions">
+          <button
+            :class="{
+              'diff-notes-collapse': discussion.expanded,
+              'btn-transparent badge badge-pill': !discussion.expanded
+            }"
+            type="button"
+            class="js-diff-notes-toggle"
+            @click="toggleDiscussion({ discussionId: discussion.id })"
+          >
+            <icon
+              v-if="discussion.expanded"
+              name="collapse"
+              class="collapse-icon"
+            />
+            <template v-else>
+              {{ index + 1 }}
+            </template>
+          </button>
+        </template>
         <noteable-discussion
+          v-show="isExpanded(discussion)"
           :discussion="discussion"
           :render-header="false"
           :render-diff-file="false"
           :always-expanded="true"
           :discussions-by-diff-order="true"
           @noteDeleted="deleteNoteHandler"
-        />
+        >
+          <span
+            v-if="renderAvatarBadge"
+            slot="avatar-badge"
+            class="badge badge-pill"
+          >
+            {{ index + 1 }}
+          </span>
+        </noteable-discussion>
       </ul>
     </div>
   </div>
diff --git a/app/assets/javascripts/diffs/components/image_diff_overlay.vue b/app/assets/javascripts/diffs/components/image_diff_overlay.vue
new file mode 100644
index 00000000000..ae1b0a52901
--- /dev/null
+++ b/app/assets/javascripts/diffs/components/image_diff_overlay.vue
@@ -0,0 +1,139 @@
+<script>
+import { mapActions, mapGetters } from 'vuex';
+import _ from 'underscore';
+import Icon from '~/vue_shared/components/icon.vue';
+
+export default {
+  name: 'ImageDiffOverlay',
+  components: {
+    Icon,
+  },
+  props: {
+    discussions: {
+      type: [Array, Object],
+      required: true,
+    },
+    fileHash: {
+      type: String,
+      required: true,
+    },
+    canComment: {
+      type: Boolean,
+      required: false,
+      default: false,
+    },
+    showCommentIcon: {
+      type: Boolean,
+      required: false,
+      default: false,
+    },
+    badgeClass: {
+      type: String,
+      required: false,
+      default: 'badge badge-pill',
+    },
+    shouldToggleDiscussion: {
+      type: Boolean,
+      required: false,
+      default: true,
+    },
+  },
+  computed: {
+    ...mapGetters('diffs', ['getDiffFileByHash', 'getCommentFormForDiffFile']),
+    currentCommentForm() {
+      return this.getCommentFormForDiffFile(this.fileHash);
+    },
+    allDiscussions() {
+      return _.isArray(this.discussions) ? this.discussions : [this.discussions];
+    },
+  },
+  methods: {
+    ...mapActions(['toggleDiscussion']),
+    ...mapActions('diffs', ['openDiffFileCommentForm']),
+    getImageDimensions() {
+      return {
+        width: this.$parent.width,
+        height: this.$parent.height,
+      };
+    },
+    getPositionForObject(meta) {
+      const { x, y, width, height } = meta;
+      const imageWidth = this.getImageDimensions().width;
+      const imageHeight = this.getImageDimensions().height;
+      const widthRatio = imageWidth / width;
+      const heightRatio = imageHeight / height;
+
+      return {
+        x: Math.round(x * widthRatio),
+        y: Math.round(y * heightRatio),
+      };
+    },
+    getPosition(discussion) {
+      const { x, y } = this.getPositionForObject(discussion.position);
+
+      return {
+        left: `${x}px`,
+        top: `${y}px`,
+      };
+    },
+    clickedImage(x, y) {
+      const { width, height } = this.getImageDimensions();
+
+      this.openDiffFileCommentForm({
+        fileHash: this.fileHash,
+        width,
+        height,
+        x,
+        y,
+      });
+    },
+  },
+};
+</script>
+
+<template>
+  <div class="position-absolute w-100 h-100 image-diff-overlay">
+    <button
+      v-if="canComment"
+      type="button"
+      class="btn-transparent position-absolute image-diff-overlay-add-comment w-100 h-100 js-add-image-diff-note-button"
+      @click="clickedImage($event.offsetX, $event.offsetY)"
+    >
+      <span class="sr-only">
+        {{ __('Add image comment') }}
+      </span>
+    </button>
+    <button
+      v-for="(discussion, index) in allDiscussions"
+      :key="discussion.id"
+      :style="getPosition(discussion)"
+      :class="badgeClass"
+      :disabled="!shouldToggleDiscussion"
+      class="js-image-badge"
+      type="button"
+      @click="toggleDiscussion({ discussionId: discussion.id })"
+    >
+      <icon
+        v-if="showCommentIcon"
+        name="image-comment-dark"
+      />
+      <template v-else>
+        {{ index + 1 }}
+      </template>
+    </button>
+    <button
+      v-if="currentCommentForm"
+      :style="{
+        left: `${currentCommentForm.x}px`,
+        top: `${currentCommentForm.y}px`
+      }"
+      :aria-label="__('Comment form position')"
+      class="btn-transparent comment-indicator"
+      type="button"
+    >
+      <icon
+        name="image-comment-dark"
+      />
+    </button>
+  </div>
+</template>
diff --git a/app/assets/javascripts/diffs/constants.js b/app/assets/javascripts/diffs/constants.js
index 6a50d2c1426..78a39baa4cb 100644
--- a/app/assets/javascripts/diffs/constants.js
+++ b/app/assets/javascripts/diffs/constants.js
@@ -12,6 +12,7 @@ export const NOTE_TYPE = 'Note';
 export const NEW_LINE_TYPE = 'new';
 export const OLD_LINE_TYPE = 'old';
 export const TEXT_DIFF_POSITION_TYPE = 'text';
+export const IMAGE_DIFF_POSITION_TYPE = 'image';
 
 export const LINE_POSITION_LEFT = 'left';
 export const LINE_POSITION_RIGHT = 'right';
diff --git a/app/assets/javascripts/diffs/store/actions.js b/app/assets/javascripts/diffs/store/actions.js
index ca8ae605cb4..d3e9c7c88f0 100644
--- a/app/assets/javascripts/diffs/store/actions.js
+++ b/app/assets/javascripts/diffs/store/actions.js
@@ -50,8 +50,8 @@ export const assignDiscussionsToDiff = (
 };
 
 export const removeDiscussionsFromDiff = ({ commit }, removeDiscussion) => {
-  const { fileHash, line_code } = removeDiscussion;
-  commit(types.REMOVE_LINE_DISCUSSIONS_FOR_FILE, { fileHash, lineCode: line_code });
+  const { fileHash, line_code, id } = removeDiscussion;
+  commit(types.REMOVE_LINE_DISCUSSIONS_FOR_FILE, { fileHash, lineCode: line_code, id });
 };
 
 export const startRenderDiffsQueue = ({ state, commit }) => {
@@ -189,6 +189,7 @@ export const saveDiffDiscussion = ({ dispatch }, { note, formData }) => {
   return dispatch('saveNote', postData, { root: true })
     .then(result => dispatch('updateDiscussion', result.discussion, { root: true }))
     .then(discussion => dispatch('assignDiscussionsToDiff', [discussion]))
+    .then(() => dispatch('closeDiffFileCommentForm', formData.diffFile.fileHash))
     .catch(() => createFlash(s__('MergeRequests|Saving the comment failed')));
 };
 
@@ -210,5 +211,19 @@ export const toggleShowTreeList = ({ commit, state }) => {
   localStorage.setItem(MR_TREE_SHOW_KEY, state.showTreeList);
 };
 
+export const openDiffFileCommentForm = ({ commit, getters }, formData) => {
+  const form = getters.getCommentFormForDiffFile(formData.fileHash);
+
+  if (form) {
+    commit(types.UPDATE_DIFF_FILE_COMMENT_FORM, formData);
+  } else {
+    commit(types.OPEN_DIFF_FILE_COMMENT_FORM, formData);
+  }
+};
+
+export const closeDiffFileCommentForm = ({ commit }, fileHash) => {
+  commit(types.CLOSE_DIFF_FILE_COMMENT_FORM, fileHash);
+};
+
 // prevent babel-plugin-rewire from generating an invalid default during karma tests
 export default () => {};
diff --git a/app/assets/javascripts/diffs/store/getters.js b/app/assets/javascripts/diffs/store/getters.js
index d4c205882ff..2bf0ad99c22 100644
--- a/app/assets/javascripts/diffs/store/getters.js
+++ b/app/assets/javascripts/diffs/store/getters.js
@@ -114,5 +114,8 @@ export const allBlobs = state => Object.values(state.treeEntries).filter(f => f.
 
 export const diffFilesLength = state => state.diffFiles.length;
 
+export const getCommentFormForDiffFile = state => fileHash =>
+  state.commentForms.find(form => form.fileHash === fileHash);
+
 // prevent babel-plugin-rewire from generating an invalid default during karma tests
 export default () => {};
diff --git a/app/assets/javascripts/diffs/store/modules/diff_state.js b/app/assets/javascripts/diffs/store/modules/diff_state.js
index 1c5c35071de..085e255f1d3 100644
--- a/app/assets/javascripts/diffs/store/modules/diff_state.js
+++ b/app/assets/javascripts/diffs/store/modules/diff_state.js
@@ -24,4 +24,6 @@ export default () => ({
   showTreeList:
     storedTreeShow === null ? bp.getBreakpointSize() !== 'xs' : storedTreeShow === 'true',
   currentDiffFileId: '',
+  projectPath: '',
+  commentForms: [],
 });
diff --git a/app/assets/javascripts/diffs/store/mutation_types.js b/app/assets/javascripts/diffs/store/mutation_types.js
index 6474ee628e2..e011031e72c 100644
--- a/app/assets/javascripts/diffs/store/mutation_types.js
+++ b/app/assets/javascripts/diffs/store/mutation_types.js
@@ -14,3 +14,7 @@ export const REMOVE_LINE_DISCUSSIONS_FOR_FILE = 'REMOVE_LINE_DISCUSSIONS_FOR_FIL
 export const TOGGLE_FOLDER_OPEN = 'TOGGLE_FOLDER_OPEN';
 export const TOGGLE_SHOW_TREE_LIST = 'TOGGLE_SHOW_TREE_LIST';
 export const UPDATE_CURRENT_DIFF_FILE_ID = 'UPDATE_CURRENT_DIFF_FILE_ID';
+
+export const OPEN_DIFF_FILE_COMMENT_FORM = 'OPEN_DIFF_FILE_COMMENT_FORM';
+export const UPDATE_DIFF_FILE_COMMENT_FORM = 'UPDATE_DIFF_FILE_COMMENT_FORM';
+export const CLOSE_DIFF_FILE_COMMENT_FORM = 'CLOSE_DIFF_FILE_COMMENT_FORM';
diff --git a/app/assets/javascripts/diffs/store/mutations.js b/app/assets/javascripts/diffs/store/mutations.js
index 38a65f111a2..a7eea2c1449 100644
--- a/app/assets/javascripts/diffs/store/mutations.js
+++ b/app/assets/javascripts/diffs/store/mutations.js
@@ -153,20 +153,22 @@ export default {
     });
   },
 
-  [types.REMOVE_LINE_DISCUSSIONS_FOR_FILE](state, { fileHash, lineCode }) {
+  [types.REMOVE_LINE_DISCUSSIONS_FOR_FILE](state, { fileHash, lineCode, id }) {
     const selectedFile = state.diffFiles.find(f => f.fileHash === fileHash);
     if (selectedFile) {
-      const targetLine = selectedFile.parallelDiffLines.find(
-        line =>
-          (line.left && line.left.lineCode === lineCode) ||
-          (line.right && line.right.lineCode === lineCode),
-      );
-      if (targetLine) {
-        const side = targetLine.left && targetLine.left.lineCode === lineCode ? 'left' : 'right';
+      if (selectedFile.parallelDiffLines) {
+        const targetLine = selectedFile.parallelDiffLines.find(
+          line =>
+            (line.left && line.left.lineCode === lineCode) ||
+            (line.right && line.right.lineCode === lineCode),
+        );
+        if (targetLine) {
+          const side = targetLine.left && targetLine.left.lineCode === lineCode ? 'left' : 'right';
 
-        Object.assign(targetLine[side], {
-          discussions: [],
-        });
+          Object.assign(targetLine[side], {
+            discussions: [],
+          });
+        }
       }
 
       if (selectedFile.highlightedDiffLines) {
@@ -180,6 +182,12 @@ export default {
           });
         }
       }
+
+      if (selectedFile.discussions && selectedFile.discussions.length) {
+        selectedFile.discussions = selectedFile.discussions.filter(
+          discussion => discussion.id !== id,
+        );
+      }
     }
   },
   [types.TOGGLE_FOLDER_OPEN](state, path) {
@@ -191,4 +199,25 @@ export default {
   [types.UPDATE_CURRENT_DIFF_FILE_ID](state, fileId) {
     state.currentDiffFileId = fileId;
   },
+  [types.OPEN_DIFF_FILE_COMMENT_FORM](state, formData) {
+    state.commentForms.push({
+      ...formData,
+    });
+  },
+  [types.UPDATE_DIFF_FILE_COMMENT_FORM](state, formData) {
+    const { fileHash } = formData;
+
+    state.commentForms = state.commentForms.map(form => {
+      if (form.fileHash === fileHash) {
+        return {
+          ...formData,
+        };
+      }
+
+      return form;
+    });
+  },
+  [types.CLOSE_DIFF_FILE_COMMENT_FORM](state, fileHash) {
+    state.commentForms = state.commentForms.filter(form => form.fileHash !== fileHash);
+  },
 };
diff --git a/app/assets/javascripts/diffs/store/utils.js b/app/assets/javascripts/diffs/store/utils.js
index a482a2b82c0..a935b9b1ffa 100644
--- a/app/assets/javascripts/diffs/store/utils.js
+++ b/app/assets/javascripts/diffs/store/utils.js
@@ -1,5 +1,6 @@
 import _ from 'underscore';
 import { convertObjectPropsToCamelCase } from '~/lib/utils/common_utils';
+import { diffModes } from '~/ide/constants';
 import {
   LINE_POSITION_LEFT,
   LINE_POSITION_RIGHT,
@@ -34,6 +35,7 @@ export function getFormData(params) {
     noteTargetLine,
     diffViewType,
     linePosition,
+    positionType,
   } = params;
 
   const position = JSON.stringify({
@@ -42,9 +44,13 @@ export function getFormData(params) {
     head_sha: diffFile.diffRefs.headSha,
     old_path: diffFile.oldPath,
     new_path: diffFile.newPath,
-    position_type: TEXT_DIFF_POSITION_TYPE,
-    old_line: noteTargetLine.oldLine,
-    new_line: noteTargetLine.newLine,
+    position_type: positionType || TEXT_DIFF_POSITION_TYPE,
+    old_line: noteTargetLine ? noteTargetLine.oldLine : null,
+    new_line: noteTargetLine ? noteTargetLine.newLine : null,
+    x: params.x,
+    y: params.y,
+    width: params.width,
+    height: params.height,
   });
 
   const postData = {
@@ -66,7 +72,7 @@ export function getFormData(params) {
         diffFile.diffRefs.startSha && diffFile.diffRefs.headSha
           ? DIFF_NOTE_TYPE
           : LEGACY_DIFF_NOTE_TYPE,
-      line_code: noteTargetLine.lineCode,
+      line_code: noteTargetLine ? noteTargetLine.lineCode : null,
     },
   };
 
@@ -225,6 +231,7 @@ export function prepareDiffData(diffData) {
     Object.assign(file, {
       renderIt: showingLines < LINES_TO_BE_RENDERED_DIRECTLY,
       collapsed: file.text && showingLines > MAX_LINES_TO_BE_RENDERED,
+      discussions: [],
     });
   }
 }
@@ -320,3 +327,8 @@ export const generateTreeList = files =>
     },
     { treeEntries: {}, tree: [] },
   );
+
+export const getDiffMode = diffFile => {
+  const diffModeKey = Object.keys(diffModes).find(key => diffFile[`${key}File`]);
+  return diffModes[diffModeKey] || diffModes.replaced;
+};
diff --git a/app/assets/javascripts/merge_request_tabs.js b/app/assets/javascripts/merge_request_tabs.js
index 2950c2299ab..d8255181574 100644
--- a/app/assets/javascripts/merge_request_tabs.js
+++ b/app/assets/javascripts/merge_request_tabs.js
@@ -11,7 +11,6 @@ import bp from './breakpoints';
 import { parseUrlPathname, handleLocationHash, isMetaClick } from './lib/utils/common_utils';
 import { isInVueNoteablePage } from './lib/utils/dom_utils';
 import { getLocationHash } from './lib/utils/url_utility';
-import initDiscussionTab from './image_diff/init_discussion_tab';
 import Diff from './diff';
 import { localTimeAgo } from './lib/utils/datetime_utility';
 import syntaxHighlight from './syntax_highlight';
@@ -207,8 +206,6 @@ export default class MergeRequestTabs {
         }
         this.resetViewContainer();
         this.destroyPipelinesView();
-
-        initDiscussionTab();
       }
       if (this.setUrl) {
         this.setCurrentAction(action);
diff --git a/app/assets/javascripts/notes/components/diff_with_note.vue b/app/assets/javascripts/notes/components/diff_with_note.vue
index eaa0cded224..b209f736c3f 100644
--- a/app/assets/javascripts/notes/components/diff_with_note.vue
+++ b/app/assets/javascripts/notes/components/diff_with_note.vue
@@ -1,15 +1,18 @@
 <script>
 import { mapState, mapActions } from 'vuex';
-import imageDiffHelper from '~/image_diff/helpers/index';
 import { convertObjectPropsToCamelCase } from '~/lib/utils/common_utils';
 import DiffFileHeader from '~/diffs/components/diff_file_header.vue';
+import DiffViewer from '~/vue_shared/components/diff_viewer/diff_viewer.vue';
+import ImageDiffOverlay from '~/diffs/components/image_diff_overlay.vue';
 import { GlSkeletonLoading } from '@gitlab-org/gitlab-ui';
-import { trimFirstCharOfLineContent } from '~/diffs/store/utils';
+import { trimFirstCharOfLineContent, getDiffMode } from '~/diffs/store/utils';
 
 export default {
   components: {
     DiffFileHeader,
     GlSkeletonLoading,
+    DiffViewer,
+    ImageDiffOverlay,
   },
   props: {
     discussion: {
@@ -25,7 +28,11 @@ export default {
   computed: {
     ...mapState({
       noteableData: state => state.notes.noteableData,
+      projectPath: state => state.diffs.projectPath,
     }),
+    diffMode() {
+      return getDiffMode(this.diffFile);
+    },
     hasTruncatedDiffLines() {
       return this.discussion.truncatedDiffLines && this.discussion.truncatedDiffLines.length !== 0;
     },
@@ -62,11 +69,7 @@ export default {
     },
   },
   mounted() {
-    if (this.isImageDiff) {
-      const canCreateNote = false;
-      const renderCommentBadge = true;
-      imageDiffHelper.initImageDiff(this.$refs.fileHolder, canCreateNote, renderCommentBadge);
-    } else if (!this.hasTruncatedDiffLines) {
+    if (!this.hasTruncatedDiffLines) {
       this.fetchDiff();
     }
   },
@@ -160,7 +163,24 @@ export default {
     <div
       v-else
     >
-      <div v-html="imageDiffHtml"></div>
+      <diff-viewer
+        :diff-mode="diffMode"
+        :new-path="diffFile.newPath"
+        :new-sha="diffFile.diffRefs.headSha"
+        :old-path="diffFile.oldPath"
+        :old-sha="diffFile.diffRefs.baseSha"
+        :file-hash="diffFile.fileHash"
+        :project-path="projectPath"
+      >
+        <image-diff-overlay
+          slot="image-overlay"
+          :discussions="discussion"
+          :file-hash="diffFile.fileHash"
+          :show-comment-icon="true"
+          :should-toggle-discussion="false"
+          badge-class="image-comment-badge"
+        />
+      </diff-viewer>
       <slot></slot>
     </div>
   </div>
diff --git a/app/assets/javascripts/notes/components/noteable_discussion.vue b/app/assets/javascripts/notes/components/noteable_discussion.vue
index 6293dd5b7e1..07115ca07c4 100644
--- a/app/assets/javascripts/notes/components/noteable_discussion.vue
+++ b/app/assets/javascripts/notes/components/noteable_discussion.vue
@@ -350,11 +350,18 @@ Please check your network connection and try again.`;
                 <ul class="notes">
                   <component
                     :is="componentName(note)"
-                    v-for="note in discussion.notes"
+                    v-for="(note, index) in discussion.notes"
                     :key="note.id"
                     :note="componentData(note)"
                     @handleDeleteNote="deleteNoteHandler"
-                  />
+                  >
+                    <slot
+                      v-if="index === 0"
+                      slot="avatar-badge"
+                      name="avatar-badge"
+                    >
+                    </slot>
+                  </component>
                 </ul>
                 <div
                   :class="{ 'is-replying': isReplying }"
diff --git a/app/assets/javascripts/notes/components/noteable_note.vue b/app/assets/javascripts/notes/components/noteable_note.vue
index f391ed848a4..40222ac4a80 100644
--- a/app/assets/javascripts/notes/components/noteable_note.vue
+++ b/app/assets/javascripts/notes/components/noteable_note.vue
@@ -182,7 +182,13 @@ export default {
           :img-src="author.avatar_url"
           :img-alt="author.name"
           :img-size="40"
-        />
+        >
+          <slot
+            slot="avatar-badge"
+            name="avatar-badge"
+          >
+          </slot>
+        </user-avatar-link>
       </div>
       <div class="timeline-content">
         <div class="note-header">
diff --git a/app/assets/javascripts/vue_shared/components/content_viewer/viewers/image_viewer.vue b/app/assets/javascripts/vue_shared/components/content_viewer/viewers/image_viewer.vue
index 8163947cd0c..6f2f0f98690 100644
--- a/app/assets/javascripts/vue_shared/components/content_viewer/viewers/image_viewer.vue
+++ b/app/assets/javascripts/vue_shared/components/content_viewer/viewers/image_viewer.vue
@@ -17,19 +17,37 @@ export default {
       type: Boolean,
       default: true,
     },
+    innerCssClasses: {
+      type: [Array, Object, String],
+      required: false,
+      default: '',
+    },
   },
   data() {
     return {
       width: 0,
       height: 0,
-      isZoomable: false,
-      isZoomed: false,
+      isLoaded: false,
     };
   },
   computed: {
     fileSizeReadable() {
       return numberToHumanSize(this.fileSize);
     },
+    dimensionStyles() {
+      if (!this.isLoaded) return {};
+
+      return {
+        width: `${this.width}px`,
+        height: `${this.height}px`,
+      };
+    },
+    hasFileSize() {
+      return this.fileSize > 0;
+    },
+    hasDimensions() {
+      return this.width && this.height;
+    },
   },
   beforeDestroy() {
     window.removeEventListener('resize', this.resizeThrottled, false);
@@ -48,51 +66,52 @@ export default {
       const { contentImg } = this.$refs;
 
       if (contentImg) {
-        this.isZoomable =
-          contentImg.naturalWidth > contentImg.width ||
-          contentImg.naturalHeight > contentImg.height;
-
         this.width = contentImg.naturalWidth;
         this.height = contentImg.naturalHeight;
 
-        this.$emit('imgLoaded', {
-          width: this.width,
-          height: this.height,
-          renderedWidth: contentImg.clientWidth,
-          renderedHeight: contentImg.clientHeight,
+        this.$nextTick(() => {
+          this.isLoaded = true;
+
+          this.$emit('imgLoaded', {
+            width: this.width,
+            height: this.height,
+            renderedWidth: contentImg.clientWidth,
+            renderedHeight: contentImg.clientHeight,
+          });
         });
       }
     },
-    onImgClick() {
-      if (this.isZoomable) this.isZoomed = !this.isZoomed;
-    },
   },
 };
 </script>
 
 <template>
-  <div class="file-container">
-    <div class="file-content image_file">
+  <div>
+    <div
+      :class="innerCssClasses"
+      :style="dimensionStyles"
+      class="position-relative"
+    >
       <img
         ref="contentImg"
-        :class="{ 'is-zoomable': isZoomable, 'is-zoomed': isZoomed }"
         :src="path"
-        :alt="path"
         @load="onImgLoad"
-        @click="onImgClick"/>
-      <p
-        v-if="renderInfo"
-        class="file-info prepend-top-10">
-        <template v-if="fileSize>0">
-          {{ fileSizeReadable }}
-        </template>
-        <template v-if="fileSize>0 && width && height">
-          |
-        </template>
-        <template v-if="width && height">
-          W: {{ width }} | H: {{ height }}
-        </template>
-      </p>
+      />
+      <slot name="image-overlay"></slot>
     </div>
+    <p
+      v-if="renderInfo"
+      class="image-info"
+    >
+      <template v-if="hasFileSize">
+        {{ fileSizeReadable }}
+      </template>
+      <template v-if="hasFileSize && hasDimensions">
+        |
+      </template>
+      <template v-if="hasDimensions">
+        <strong>W</strong>: {{ width }} | <strong>H</strong>: {{ height }}
+      </template>
+    </p>
   </div>
 </template>
diff --git a/app/assets/javascripts/vue_shared/components/diff_viewer/diff_viewer.vue b/app/assets/javascripts/vue_shared/components/diff_viewer/diff_viewer.vue
index cfc5343217c..9c3f3e7f7a9 100644
--- a/app/assets/javascripts/vue_shared/components/diff_viewer/diff_viewer.vue
+++ b/app/assets/javascripts/vue_shared/components/diff_viewer/diff_viewer.vue
@@ -69,6 +69,13 @@ export default {
       :new-path="fullNewPath"
       :old-path="fullOldPath"
       :project-path="projectPath"
-    />
+    >
+      <slot
+        slot="image-overlay"
+        name="image-overlay"
+      >
+      </slot>
+    </component>
+    <slot></slot>
   </div>
 </template>
diff --git a/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff/onion_skin_viewer.vue b/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff/onion_skin_viewer.vue
index 38e881d17a2..cd0c1e850af 100644
--- a/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff/onion_skin_viewer.vue
+++ b/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff/onion_skin_viewer.vue
@@ -15,11 +15,6 @@ export default {
       type: String,
       required: true,
     },
-    projectPath: {
-      type: String,
-      required: false,
-      default: '',
-    },
   },
   data() {
     return {
@@ -120,7 +115,6 @@ export default {
           key="onionOldImg"
           :render-info="false"
           :path="oldPath"
-          :project-path="projectPath"
           @imgLoaded="onionOldImgLoaded"
         />
       </div>
@@ -136,9 +130,14 @@ export default {
           key="onionNewImg"
           :render-info="false"
           :path="newPath"
-          :project-path="projectPath"
           @imgLoaded="onionNewImgLoaded"
-        />
+        >
+          <slot
+            slot="image-overlay"
+            name="image-overlay"
+          >
+          </slot>
+        </image-viewer>
       </div>
       <div class="controls">
         <div class="transparent"></div>
diff --git a/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff/swipe_viewer.vue b/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff/swipe_viewer.vue
index 86366c799a2..c3cfe54eb4d 100644
--- a/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff/swipe_viewer.vue
+++ b/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff/swipe_viewer.vue
@@ -16,11 +16,6 @@ export default {
       type: String,
       required: true,
     },
-    projectPath: {
-      type: String,
-      required: false,
-      default: '',
-    },
   },
   data() {
     return {
@@ -117,16 +112,14 @@ export default {
         'height': swipeMaxPixelHeight,
       }"
       class="swipe-frame">
-      <div class="frame deleted">
-        <image-viewer
-          key="swipeOldImg"
-          ref="swipeOldImg"
-          :render-info="false"
-          :path="oldPath"
-          :project-path="projectPath"
-          @imgLoaded="swipeOldImgLoaded"
-        />
-      </div>
+      <image-viewer
+        key="swipeOldImg"
+        ref="swipeOldImg"
+        :render-info="false"
+        :path="oldPath"
+        class="frame deleted"
+        @imgLoaded="swipeOldImgLoaded"
+      />
       <div
         ref="swipeWrap"
         :style="{
@@ -134,15 +127,19 @@ export default {
           'height': swipeMaxPixelHeight,
         }"
         class="swipe-wrap">
-        <div class="frame added">
-          <image-viewer
-            key="swipeNewImg"
-            :render-info="false"
-            :path="newPath"
-            :project-path="projectPath"
-            @imgLoaded="swipeNewImgLoaded"
-          />
-        </div>
+        <image-viewer
+          key="swipeNewImg"
+          :render-info="false"
+          :path="newPath"
+          class="frame added"
+          @imgLoaded="swipeNewImgLoaded"
+        >
+          <slot
+            slot="image-overlay"
+            name="image-overlay"
+          >
+          </slot>
+        </image-viewer>
       </div>
       <span
         ref="swipeBar"
diff --git a/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff/two_up_viewer.vue b/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff/two_up_viewer.vue
index 9c19266ecdf..9806d65e940 100644
--- a/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff/two_up_viewer.vue
+++ b/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff/two_up_viewer.vue
@@ -14,28 +14,29 @@ export default {
       type: String,
       required: true,
     },
-    projectPath: {
-      type: String,
-      required: false,
-      default: '',
-    },
   },
 };
 </script>
 
 <template>
-  <div class="two-up view row">
-    <div class="col-sm-6 frame deleted">
-      <image-viewer
-        :path="oldPath"
-        :project-path="projectPath"
-      />
-    </div>
-    <div class="col-sm-6 frame added">
-      <image-viewer
-        :path="newPath"
-        :project-path="projectPath"
-      />
-    </div>
+  <div class="two-up view">
+    <image-viewer
+      :path="oldPath"
+      :render-info="true"
+      inner-css-classes="frame deleted"
+      class="wrap"
+    />
+    <image-viewer
+      :path="newPath"
+      :render-info="true"
+      :inner-css-classes="['frame', 'added']"
+      class="wrap"
+    >
+      <slot
+        slot="image-overlay"
+        name="image-overlay"
+      >
+      </slot>
+    </image-viewer>
   </div>
 </template>
diff --git a/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff_viewer.vue b/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff_viewer.vue
index 1af85283277..e68a2aa73fa 100644
--- a/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff_viewer.vue
+++ b/app/assets/javascripts/vue_shared/components/diff_viewer/viewers/image_diff_viewer.vue
@@ -8,9 +8,6 @@ import { diffModes, imageViewMode } from '../constants';
 export default {
   components: {
     ImageViewer,
-    TwoUpViewer,
-    SwipeViewer,
-    OnionSkinViewer,
   },
   props: {
     diffMode: {
@@ -25,17 +22,32 @@ export default {
       type: String,
       required: true,
     },
-    projectPath: {
-      type: String,
-      required: false,
-      default: '',
-    },
   },
   data() {
     return {
       mode: imageViewMode.twoup,
     };
   },
+  computed: {
+    imageViewComponent() {
+      switch (this.mode) {
+        case imageViewMode.twoup:
+          return TwoUpViewer;
+        case imageViewMode.swipe:
+          return SwipeViewer;
+        case imageViewMode.onion:
+          return OnionSkinViewer;
+        default:
+          return undefined;
+      }
+    },
+    isNew() {
+      return this.diffMode === diffModes.new;
+    },
+    imagePath() {
+      return this.isNew ? this.newPath : this.oldPath;
+    },
+  },
   methods: {
     changeMode(newMode) {
       this.mode = newMode;
@@ -52,15 +64,16 @@ export default {
       v-if="diffMode === $options.diffModes.replaced"
       class="diff-viewer">
       <div class="image js-replaced-image">
-        <two-up-viewer
-          v-if="mode === $options.imageViewMode.twoup"
-          v-bind="$props"/>
-        <swipe-viewer
-          v-else-if="mode === $options.imageViewMode.swipe"
-          v-bind="$props"/>
-        <onion-skin-viewer
-          v-else-if="mode === $options.imageViewMode.onion"
-          v-bind="$props"/>
+        <component
+          :is="imageViewComponent"
+          v-bind="$props"
+        >
+          <slot
+            slot="image-overlay"
+            name="image-overlay"
+          >
+          </slot>
+        </component>
       </div>
       <div class="view-modes">
         <ul class="view-modes-menu">
@@ -87,23 +100,27 @@ export default {
           </li>
         </ul>
       </div>
-      <div class="note-container"></div>
-    </div>
-    <div
-      v-else-if="diffMode === $options.diffModes.new"
-      class="diff-viewer added">
-      <image-viewer
-        :path="newPath"
-        :project-path="projectPath"
-      />
     </div>
     <div
       v-else
-      class="diff-viewer deleted">
-      <image-viewer
-        :path="oldPath"
-        :project-path="projectPath"
-      />
+      class="diff-viewer"
+    >
+      <div class="image">
+        <image-viewer
+          :path="imagePath"
+          :inner-css-classes="['frame', {
+            'added': isNew,
+            'deleted': diffMode === $options.diffModes.deleted
+          }]"
+        >
+          <slot
+            v-if="isNew"
+            slot="image-overlay"
+            name="image-overlay"
+          >
+          </slot>
+        </image-viewer>
+      </div>
     </div>
   </div>
 </template>
diff --git a/app/assets/javascripts/vue_shared/components/user_avatar/user_avatar_link.vue b/app/assets/javascripts/vue_shared/components/user_avatar/user_avatar_link.vue
index 86c7498a092..dd6f96e2609 100644
--- a/app/assets/javascripts/vue_shared/components/user_avatar/user_avatar_link.vue
+++ b/app/assets/javascripts/vue_shared/components/user_avatar/user_avatar_link.vue
@@ -99,6 +99,6 @@ export default {
       v-tooltip
       :title="tooltipText"
       :tooltip-placement="tooltipPlacement"
-    >{{ username }}</span>
+    >{{ username }}</span><slot name="avatar-badge"></slot>
   </gl-link>
 </template>
diff --git a/app/assets/stylesheets/pages/diff.scss b/app/assets/stylesheets/pages/diff.scss
index 52c91266ff4..19bc4262e21 100644
--- a/app/assets/stylesheets/pages/diff.scss
+++ b/app/assets/stylesheets/pages/diff.scss
@@ -421,21 +421,13 @@
 
   .diff-file-container {
     .frame.deleted {
-      border: 0;
+      border: 1px solid $deleted;
       background-color: inherit;
-
-      .image_file img {
-        border: 1px solid $deleted;
-      }
     }
 
     .frame.added {
-      border: 0;
+      border: 1px solid $added;
       background-color: inherit;
-
-      .image_file img {
-        border: 1px solid $added;
-      }
     }
 
     .swipe.view,
@@ -481,6 +473,11 @@
       bottom: -25px;
     }
   }
+
+  .discussion-notes .discussion-notes {
+    margin-left: 0;
+    border-left: 0;
+  }
 }
 
 .file-content .diff-file {
@@ -804,7 +801,7 @@
 
   // double jagged line divider
   .discussion-notes + .discussion-notes::before,
-  .discussion-notes + .discussion-form::before {
+  .diff-file-discussions + .discussion-form::before {
     content: '';
     position: relative;
     display: block;
@@ -844,6 +841,13 @@
     background-repeat: repeat;
   }
 
+  .diff-file-discussions + .discussion-form::before {
+    width: auto;
+    margin-left: -16px;
+    margin-right: -16px;
+    margin-bottom: 16px;
+  }
+
   .notes {
     position: relative;
   }
@@ -870,11 +874,13 @@
   }
 }
 
-.files:not([data-can-create-note]) .frame {
+.files:not([data-can-create-note="true"]) .frame {
   cursor: auto;
 }
 
-.frame.click-to-comment {
+.frame,
+.frame.click-to-comment,
+.btn-transparent.image-diff-overlay-add-comment {
   position: relative;
   cursor: image-url('illustrations/image_comment_light_cursor.svg')
       $image-comment-cursor-left-offset $image-comment-cursor-top-offset,
@@ -910,6 +916,7 @@
 
 .frame .badge.badge-pill,
 .image-diff-avatar-link .badge.badge-pill,
+.user-avatar-link .badge.badge-pill,
 .notes > .badge.badge-pill {
   position: absolute;
   background-color: $blue-400;
@@ -944,7 +951,8 @@
   }
 }
 
-.image-diff-avatar-link {
+.image-diff-avatar-link,
+.user-avatar-link {
   position: relative;
 
   .badge.badge-pill,
@@ -1073,3 +1081,14 @@
     top: 0;
   }
 }
+
+.image-diff-overlay,
+.image-diff-overlay-add-comment {
+  top: 0;
+  left: 0;
+
+  &:active,
+  &:focus {
+    outline: 0;
+  }
+}
diff --git a/changelogs/unreleased/mr-image-commenting.yml b/changelogs/unreleased/mr-image-commenting.yml
new file mode 100644
index 00000000000..3cc3becc795
--- /dev/null
+++ b/changelogs/unreleased/mr-image-commenting.yml
@@ -0,0 +1,5 @@
+---
+title: Reimplemented image commenting in merge request diffs
+merge_request:
+author:
+type: added
diff --git a/locale/gitlab.pot b/locale/gitlab.pot
index 45fc072900a..1bfc8a1a9ac 100644
--- a/locale/gitlab.pot
+++ b/locale/gitlab.pot
@@ -336,6 +336,9 @@ msgstr ""
 msgid "Add a table"
 msgstr ""
 
+msgid "Add image comment"
+msgstr ""
+
 msgid "Add license"
 msgstr ""
 
@@ -1718,12 +1721,18 @@ msgstr ""
 msgid "Collapse sidebar"
 msgstr ""
 
+msgid "Comment"
+msgstr ""
+
 msgid "Comment & resolve discussion"
 msgstr ""
 
 msgid "Comment & unresolve discussion"
 msgstr ""
 
+msgid "Comment form position"
+msgstr ""
+
 msgid "Comments"
 msgstr ""
 
diff --git a/spec/features/merge_request/user_creates_image_diff_notes_spec.rb b/spec/features/merge_request/user_creates_image_diff_notes_spec.rb
index f0d38dc6a0c..d790bdc82ce 100644
--- a/spec/features/merge_request/user_creates_image_diff_notes_spec.rb
+++ b/spec/features/merge_request/user_creates_image_diff_notes_spec.rb
@@ -114,10 +114,9 @@ describe 'Merge request > User creates image diff notes', :js do
           create_image_diff_note
         end
 
-        # TODO: https://gitlab.com/gitlab-org/gitlab-ce/issues/48034
-        xit 'shows indicator and avatar badges, and allows collapsing/expanding the discussion notes' do
+        it 'shows indicator and avatar badges, and allows collapsing/expanding the discussion notes' do
           indicator = find('.js-image-badge', match: :first)
-          badge = find('.image-diff-avatar-link .badge', match: :first)
+          badge = find('.user-avatar-link .badge', match: :first)
 
           expect(indicator).to have_content('1')
           expect(badge).to have_content('1')
@@ -157,8 +156,7 @@ describe 'Merge request > User creates image diff notes', :js do
       visit project_merge_request_path(project, merge_request)
     end
 
-    # TODO: https://gitlab.com/gitlab-org/gitlab-ce/issues/48034
-    xit 'render diff indicators within the image frame' do
+    it 'render diff indicators within the image frame' do
       diff_note = create(:diff_note_on_merge_request, project: project, noteable: merge_request, position: position)
 
       wait_for_requests
@@ -200,7 +198,6 @@ describe 'Merge request > User creates image diff notes', :js do
 
   def create_image_diff_note
     find('.js-add-image-diff-note-button', match: :first).click
-    page.all('.js-add-image-diff-note-button')[0].click
     find('.diff-content .note-textarea').native.send_keys('image diff test comment')
     click_button 'Comment'
     wait_for_requests
diff --git a/spec/javascripts/diffs/components/diff_content_spec.js b/spec/javascripts/diffs/components/diff_content_spec.js
index 67f7b569f47..36bd042f3c4 100644
--- a/spec/javascripts/diffs/components/diff_content_spec.js
+++ b/spec/javascripts/diffs/components/diff_content_spec.js
@@ -1,15 +1,24 @@
 import Vue from 'vue';
 import DiffContentComponent from '~/diffs/components/diff_content.vue';
-import store from '~/mr_notes/stores';
+import { createStore } from '~/mr_notes/stores';
 import { mountComponentWithStore } from 'spec/helpers/vue_mount_component_helper';
 import { GREEN_BOX_IMAGE_URL, RED_BOX_IMAGE_URL } from 'spec/test_constants';
+import '~/behaviors/markdown/render_gfm';
 import diffFileMockData from '../mock_data/diff_file';
+import discussionsMockData from '../mock_data/diff_discussions';
 
 describe('DiffContent', () => {
   const Component = Vue.extend(DiffContentComponent);
   let vm;
 
   beforeEach(() => {
+    const store = createStore();
+    store.state.notes.noteableData = {
+      current_user: {
+        can_create_note: false,
+      },
+    };
+
     vm = mountComponentWithStore(Component, {
       store,
       props: {
@@ -46,21 +55,57 @@ describe('DiffContent', () => {
     });
 
     describe('image diff', () => {
-      beforeEach(() => {
+      beforeEach(done => {
         vm.diffFile.newPath = GREEN_BOX_IMAGE_URL;
         vm.diffFile.newSha = 'DEF';
         vm.diffFile.oldPath = RED_BOX_IMAGE_URL;
         vm.diffFile.oldSha = 'ABC';
         vm.diffFile.viewPath = '';
+        vm.diffFile.discussions = [{ ...discussionsMockData }];
+        vm.$store.state.diffs.commentForms.push({
+          fileHash: vm.diffFile.fileHash,
+          x: 10,
+          y: 20,
+          width: 100,
+          height: 200,
+        });
+
+        vm.$nextTick(done);
       });
 
-      it('should have image diff view in place', done => {
-        vm.$nextTick(() => {
-          expect(vm.$el.querySelectorAll('.js-diff-inline-view').length).toEqual(0);
+      it('should have image diff view in place', () => {
+        expect(vm.$el.querySelectorAll('.js-diff-inline-view').length).toEqual(0);
 
-          expect(vm.$el.querySelectorAll('.diff-viewer .image').length).toEqual(1);
+        expect(vm.$el.querySelectorAll('.diff-viewer .image').length).toEqual(1);
+      });
 
-          done();
+      it('renders image diff overlay', () => {
+        expect(vm.$el.querySelector('.image-diff-overlay')).not.toBe(null);
+      });
+
+      it('renders diff file discussions', () => {
+        expect(vm.$el.querySelectorAll('.discussion .note.timeline-entry').length).toEqual(5);
+      });
+
+      describe('handleSaveNote', () => {
+        it('dispatches handleSaveNote', () => {
+          spyOn(vm.$store, 'dispatch').and.stub();
+
+          vm.handleSaveNote('test');
+
+          expect(vm.$store.dispatch).toHaveBeenCalledWith('diffs/saveDiffDiscussion', {
+            note: 'test',
+            formData: {
+              noteableData: jasmine.anything(),
+              noteableType: jasmine.anything(),
+              diffFile: vm.diffFile,
+              positionType: 'image',
+              x: 10,
+              y: 20,
+              width: 100,
+              height: 200,
+            },
+          });
         });
       });
     });
diff --git a/spec/javascripts/diffs/components/diff_discussions_spec.js b/spec/javascripts/diffs/components/diff_discussions_spec.js
index 270f363825f..0bc9da5ad0f 100644
--- a/spec/javascripts/diffs/components/diff_discussions_spec.js
+++ b/spec/javascripts/diffs/components/diff_discussions_spec.js
@@ -1,24 +1,90 @@
 import Vue from 'vue';
 import DiffDiscussions from '~/diffs/components/diff_discussions.vue';
-import store from '~/mr_notes/stores';
+import { createStore } from '~/mr_notes/stores';
 import { createComponentWithStore } from 'spec/helpers/vue_mount_component_helper';
+import '~/behaviors/markdown/render_gfm';
 import discussionsMockData from '../mock_data/diff_discussions';
 
 describe('DiffDiscussions', () => {
-  let component;
+  let vm;
   const getDiscussionsMockData = () => [Object.assign({}, discussionsMockData)];
 
-  beforeEach(() => {
-    component = createComponentWithStore(Vue.extend(DiffDiscussions), store, {
+  function createComponent(props = {}) {
+    const store = createStore();
+
+    vm = createComponentWithStore(Vue.extend(DiffDiscussions), store, {
       discussions: getDiscussionsMockData(),
+      ...props,
     }).$mount();
+  }
+
+  afterEach(() => {
+    vm.$destroy();
   });
 
   describe('template', () => {
     it('should have notes list', () => {
-      const { $el } = component;
+      createComponent();
 
-      expect($el.querySelectorAll('.discussion .note.timeline-entry').length).toEqual(5);
+      expect(vm.$el.querySelectorAll('.discussion .note.timeline-entry').length).toEqual(5);
+    });
+  });
+
+  describe('image commenting', () => {
+    it('renders collapsible discussion button', () => {
+      createComponent({ shouldCollapseDiscussions: true });
+
+      expect(vm.$el.querySelector('.js-diff-notes-toggle')).not.toBe(null);
+      expect(vm.$el.querySelector('.js-diff-notes-toggle svg')).not.toBe(null);
+      expect(vm.$el.querySelector('.js-diff-notes-toggle').classList).toContain(
+        'diff-notes-collapse',
+      );
+    });
+
+    it('dispatches toggleDiscussion when clicking collapse button', () => {
+      createComponent({ shouldCollapseDiscussions: true });
+
+      spyOn(vm.$store, 'dispatch').and.stub();
+
+      vm.$el.querySelector('.js-diff-notes-toggle').click();
+
+      expect(vm.$store.dispatch).toHaveBeenCalledWith('toggleDiscussion', {
+        discussionId: vm.discussions[0].id,
+      });
+    });
+
+    it('renders expand button when discussion is collapsed', done => {
+      createComponent({ shouldCollapseDiscussions: true });
+
+      vm.discussions[0].expanded = false;
+
+      vm.$nextTick(() => {
+        expect(vm.$el.querySelector('.js-diff-notes-toggle').textContent.trim()).toBe('1');
+        expect(vm.$el.querySelector('.js-diff-notes-toggle').className).toContain(
+          'btn-transparent badge badge-pill',
+        );
+
+        done();
+      });
+    });
+
+    it('hides discussion when collapsed', done => {
+      createComponent({ shouldCollapseDiscussions: true });
+
+      vm.discussions[0].expanded = false;
+
+      vm.$nextTick(() => {
+        expect(vm.$el.querySelector('.note-discussion').style.display).toBe('none');
+
+        done();
+      });
+    });
+
+    it('renders badge on avatar', () => {
+      createComponent({ renderAvatarBadge: true, discussions: [{ ...discussionsMockData }] });
+
+      expect(vm.$el.querySelector('.user-avatar-link .badge-pill')).not.toBe(null);
+      expect(vm.$el.querySelector('.user-avatar-link .badge-pill').textContent.trim()).toBe('1');
     });
   });
 });
diff --git a/spec/javascripts/diffs/components/image_diff_overlay_spec.js b/spec/javascripts/diffs/components/image_diff_overlay_spec.js
new file mode 100644
index 00000000000..d76ab745fe1
--- /dev/null
+++ b/spec/javascripts/diffs/components/image_diff_overlay_spec.js
@@ -0,0 +1,146 @@
+import Vue from 'vue';
+import ImageDiffOverlay from '~/diffs/components/image_diff_overlay.vue';
+import { createStore } from '~/mr_notes/stores';
+import { createComponentWithStore } from 'spec/helpers/vue_mount_component_helper';
+import { imageDiffDiscussions } from '../mock_data/diff_discussions';
+
+describe('Diffs image diff overlay component', () => {
+  const dimensions = {
+    width: 100,
+    height: 200,
+  };
+  let Component;
+  let vm;
+
+  function createComponent(props = {}, extendStore = () => {}) {
+    const store = createStore();
+
+    extendStore(store);
+
+    vm = createComponentWithStore(Component, store, {
+      discussions: [...imageDiffDiscussions],
+      fileHash: 'ABC',
+      ...props,
+    });
+  }
+
+  beforeAll(() => {
+    Component = Vue.extend(ImageDiffOverlay);
+  });
+
+  afterEach(() => {
+    vm.$destroy();
+  });
+
+  it('renders comment badges', () => {
+    createComponent();
+    spyOn(vm, 'getImageDimensions').and.returnValue(dimensions);
+    vm.$mount();
+
+    expect(vm.$el.querySelectorAll('.js-image-badge').length).toBe(2);
+  });
+
+  it('renders index of discussion in badge', () => {
+    createComponent();
+    spyOn(vm, 'getImageDimensions').and.returnValue(dimensions);
+    vm.$mount();
+
+    expect(vm.$el.querySelectorAll('.js-image-badge')[0].textContent.trim()).toBe('1');
+    expect(vm.$el.querySelectorAll('.js-image-badge')[1].textContent.trim()).toBe('2');
+  });
+
+  it('renders icon when showCommentIcon is true', () => {
+    createComponent({ showCommentIcon: true });
+    spyOn(vm, 'getImageDimensions').and.returnValue(dimensions);
+    vm.$mount();
+
+    expect(vm.$el.querySelector('.js-image-badge svg')).not.toBe(null);
+  });
+
+  it('sets badge comment positions', () => {
+    createComponent();
+    spyOn(vm, 'getImageDimensions').and.returnValue(dimensions);
+    vm.$mount();
+
+    expect(vm.$el.querySelectorAll('.js-image-badge')[0].style.left).toBe('10px');
+    expect(vm.$el.querySelectorAll('.js-image-badge')[0].style.top).toBe('10px');
+
+    expect(vm.$el.querySelectorAll('.js-image-badge')[1].style.left).toBe('5px');
+    expect(vm.$el.querySelectorAll('.js-image-badge')[1].style.top).toBe('5px');
+  });
+
+  it('renders single badge for discussion object', () => {
+    createComponent({
+      discussions: {
+        ...imageDiffDiscussions[0],
+      },
+    });
+    spyOn(vm, 'getImageDimensions').and.returnValue(dimensions);
+    vm.$mount();
+
+    expect(vm.$el.querySelectorAll('.js-image-badge').length).toBe(1);
+  });
+
+  it('dispatches openDiffFileCommentForm when clicking overlay', () => {
+    createComponent({ canComment: true });
+    spyOn(vm, 'getImageDimensions').and.returnValue(dimensions);
+    vm.$mount();
+
+    spyOn(vm.$store, 'dispatch').and.stub();
+
+    vm.$el.querySelector('.js-add-image-diff-note-button').click();
+
+    expect(vm.$store.dispatch).toHaveBeenCalledWith('diffs/openDiffFileCommentForm', {
+      fileHash: 'ABC',
+      x: 0,
+      y: 0,
+      width: 100,
+      height: 200,
+    });
+  });
+
+  describe('toggle discussion', () => {
+    it('disables buttons when shouldToggleDiscussion is false', () => {
+      createComponent({ shouldToggleDiscussion: false });
+      spyOn(vm, 'getImageDimensions').and.returnValue(dimensions);
+      vm.$mount();
+
+      expect(vm.$el.querySelector('.js-image-badge').hasAttribute('disabled')).toBe(true);
+    });
+
+    it('dispatches toggleDiscussion when clicking image badge', () => {
+      createComponent();
+      spyOn(vm, 'getImageDimensions').and.returnValue(dimensions);
+      vm.$mount();
+
+      spyOn(vm.$store, 'dispatch').and.stub();
+
+      vm.$el.querySelector('.js-image-badge').click();
+
+      expect(vm.$store.dispatch).toHaveBeenCalledWith('toggleDiscussion', { discussionId: '1' });
+    });
+  });
+
+  describe('comment form', () => {
+    beforeEach(() => {
+      createComponent({}, store => {
+        store.state.diffs.commentForms.push({
+          fileHash: 'ABC',
+          x: 20,
+          y: 10,
+        });
+      });
+      spyOn(vm, 'getImageDimensions').and.returnValue(dimensions);
+      vm.$mount();
+    });
+
+    it('renders comment form badge', () => {
+      expect(vm.$el.querySelector('.comment-indicator')).not.toBe(null);
+    });
+
+    it('sets comment form badge position', () => {
+      expect(vm.$el.querySelector('.comment-indicator').style.left).toBe('20px');
+      expect(vm.$el.querySelector('.comment-indicator').style.top).toBe('10px');
+    });
+  });
+});
diff --git a/spec/javascripts/diffs/mock_data/diff_discussions.js b/spec/javascripts/diffs/mock_data/diff_discussions.js
index 0ad214ea4a4..5ffe5a366ba 100644
--- a/spec/javascripts/diffs/mock_data/diff_discussions.js
+++ b/spec/javascripts/diffs/mock_data/diff_discussions.js
@@ -492,3 +492,24 @@ export default {
   image_diff_html:
     '<div class="image js-replaced-image" data="">\n<div class="two-up view">\n<div class="wrap">\n<div class="frame deleted">\n<img alt="CHANGELOG" src="http://localhost:3000/gitlab-org/gitlab-test/raw/e63f41fe459e62e1228fcef60d7189127aeba95a/CHANGELOG" />\n</div>\n<p class="image-info hide">\n<span class="meta-filesize">22.3 KB</span>\n|\n<strong>W:</strong>\n<span class="meta-width"></span>\n|\n<strong>H:</strong>\n<span class="meta-height"></span>\n</p>\n</div>\n<div class="wrap">\n<div class="added frame js-image-frame" data-note-type="DiffNote" data-position="{&quot;base_sha&quot;:&quot;e63f41fe459e62e1228fcef60d7189127aeba95a&quot;,&quot;start_sha&quot;:&quot;d9eaefe5a676b820c57ff18cf5b68316025f7962&quot;,&quot;head_sha&quot;:&quot;c48ee0d1bf3b30453f5b32250ce03134beaa6d13&quot;,&quot;old_path&quot;:&quot;CHANGELOG&quot;,&quot;new_path&quot;:&quot;CHANGELOG&quot;,&quot;position_type&quot;:&quot;text&quot;,&quot;old_line&quot;:null,&quot;new_line&quot;:2}">\n<img alt="CHANGELOG" draggable="false" src="http://localhost:3000/gitlab-org/gitlab-test/raw/c48ee0d1bf3b30453f5b32250ce03134beaa6d13/CHANGELOG" />\n</div>\n\n<p class="image-info hide">\n<span class="meta-filesize">22.3 KB</span>\n|\n<strong>W:</strong>\n<span class="meta-width"></span>\n|\n<strong>H:</strong>\n<span class="meta-height"></span>\n</p>\n</div>\n</div>\n<div class="swipe view hide">\n<div class="swipe-frame">\n<div class="frame deleted">\n<img alt="CHANGELOG" src="http://localhost:3000/gitlab-org/gitlab-test/raw/e63f41fe459e62e1228fcef60d7189127aeba95a/CHANGELOG" />\n</div>\n<div class="swipe-wrap">\n<div class="added frame js-image-frame" data-note-type="DiffNote" data-position="{&quot;base_sha&quot;:&quot;e63f41fe459e62e1228fcef60d7189127aeba95a&quot;,&quot;start_sha&quot;:&quot;d9eaefe5a676b820c57ff18cf5b68316025f7962&quot;,&quot;head_sha&quot;:&quot;c48ee0d1bf3b30453f5b32250ce03134beaa6d13&quot;,&quot;old_path&quot;:&quot;CHANGELOG&quot;,&quot;new_path&quot;:&quot;CHANGELOG&quot;,&quot;position_type&quot;:&quot;text&quot;,&quot;old_line&quot;:null,&quot;new_line&quot;:2}">\n<img alt="CHANGELOG" draggable="false" src="http://localhost:3000/gitlab-org/gitlab-test/raw/c48ee0d1bf3b30453f5b32250ce03134beaa6d13/CHANGELOG" />\n</div>\n\n</div>\n<span class="swipe-bar">\n<span class="top-handle"></span>\n<span class="bottom-handle"></span>\n</span>\n</div>\n</div>\n<div class="onion-skin view hide">\n<div class="onion-skin-frame">\n<div class="frame deleted">\n<img alt="CHANGELOG" src="http://localhost:3000/gitlab-org/gitlab-test/raw/e63f41fe459e62e1228fcef60d7189127aeba95a/CHANGELOG" />\n</div>\n<div class="added frame js-image-frame" data-note-type="DiffNote" data-position="{&quot;base_sha&quot;:&quot;e63f41fe459e62e1228fcef60d7189127aeba95a&quot;,&quot;start_sha&quot;:&quot;d9eaefe5a676b820c57ff18cf5b68316025f7962&quot;,&quot;head_sha&quot;:&quot;c48ee0d1bf3b30453f5b32250ce03134beaa6d13&quot;,&quot;old_path&quot;:&quot;CHANGELOG&quot;,&quot;new_path&quot;:&quot;CHANGELOG&quot;,&quot;position_type&quot;:&quot;text&quot;,&quot;old_line&quot;:null,&quot;new_line&quot;:2}">\n<img alt="CHANGELOG" draggable="false" src="http://localhost:3000/gitlab-org/gitlab-test/raw/c48ee0d1bf3b30453f5b32250ce03134beaa6d13/CHANGELOG" />\n</div>\n\n<div class="controls">\n<div class="transparent"></div>\n<div class="drag-track">\n<div class="dragger" style="left: 0px;"></div>\n</div>\n<div class="opaque"></div>\n</div>\n</div>\n</div>\n</div>\n<div class="view-modes hide">\n<ul class="view-modes-menu">\n<li class="two-up" data-mode="two-up">2-up</li>\n<li class="swipe" data-mode="swipe">Swipe</li>\n<li class="onion-skin" data-mode="onion-skin">Onion skin</li>\n</ul>\n</div>\n',
 };
+
+export const imageDiffDiscussions = [
+  {
+    id: '1',
+    position: {
+      x: 10,
+      y: 10,
+      width: 100,
+      height: 200,
+    },
+  },
+  {
+    id: '2',
+    position: {
+      x: 5,
+      y: 5,
+      width: 100,
+      height: 200,
+    },
+  },
+];
diff --git a/spec/javascripts/diffs/mock_data/diff_file.js b/spec/javascripts/diffs/mock_data/diff_file.js
index d7bc0dbe431..be194ab414f 100644
--- a/spec/javascripts/diffs/mock_data/diff_file.js
+++ b/spec/javascripts/diffs/mock_data/diff_file.js
@@ -237,4 +237,5 @@ export default {
       },
     },
   ],
+  discussions: [],
 };
diff --git a/spec/javascripts/diffs/store/actions_spec.js b/spec/javascripts/diffs/store/actions_spec.js
index bb623953710..17d0f31bdd3 100644
--- a/spec/javascripts/diffs/store/actions_spec.js
+++ b/spec/javascripts/diffs/store/actions_spec.js
@@ -218,6 +218,7 @@ describe('DiffsStoreActions', () => {
         ],
       };
       const singleDiscussion = {
+        id: '1',
         fileHash: 'ABC',
         line_code: 'ABC_1_1',
       };
@@ -230,6 +231,7 @@ describe('DiffsStoreActions', () => {
           {
             type: types.REMOVE_LINE_DISCUSSIONS_FOR_FILE,
             payload: {
+              id: '1',
               fileHash: 'ABC',
               lineCode: 'ABC_1_1',
             },
diff --git a/spec/javascripts/notes/components/diff_with_note_spec.js b/spec/javascripts/notes/components/diff_with_note_spec.js
index 239d7950907..0c16103714a 100644
--- a/spec/javascripts/notes/components/diff_with_note_spec.js
+++ b/spec/javascripts/notes/components/diff_with_note_spec.js
@@ -1,7 +1,7 @@
 import Vue from 'vue';
 import DiffWithNote from '~/notes/components/diff_with_note.vue';
 import { convertObjectPropsToCamelCase } from '~/lib/utils/common_utils';
-import createStore from '~/notes/stores';
+import { createStore } from '~/mr_notes/stores';
 import { mountComponentWithStore } from 'spec/helpers';
 
 const discussionFixture = 'merge_requests/diff_discussion.json';
diff --git a/spec/javascripts/vue_shared/components/content_viewer/content_viewer_spec.js b/spec/javascripts/vue_shared/components/content_viewer/content_viewer_spec.js
index e2c34508b0d..4da8c6196b1 100644
--- a/spec/javascripts/vue_shared/components/content_viewer/content_viewer_spec.js
+++ b/spec/javascripts/vue_shared/components/content_viewer/content_viewer_spec.js
@@ -47,7 +47,7 @@ describe('ContentViewer', () => {
     });
 
     setTimeout(() => {
-      expect(vm.$el.querySelector('.image_file img').getAttribute('src')).toBe(GREEN_BOX_IMAGE_URL);
+      expect(vm.$el.querySelector('img').getAttribute('src')).toBe(GREEN_BOX_IMAGE_URL);
 
       done();
     });
diff --git a/spec/javascripts/vue_shared/components/diff_viewer/diff_viewer_spec.js b/spec/javascripts/vue_shared/components/diff_viewer/diff_viewer_spec.js
index fcd231ec693..67a3a2e08bc 100644
--- a/spec/javascripts/vue_shared/components/diff_viewer/diff_viewer_spec.js
+++ b/spec/javascripts/vue_shared/components/diff_viewer/diff_viewer_spec.js
@@ -30,11 +30,11 @@ describe('DiffViewer', () => {
     });
 
     setTimeout(() => {
-      expect(vm.$el.querySelector('.deleted .image_file img').getAttribute('src')).toBe(
+      expect(vm.$el.querySelector('.deleted img').getAttribute('src')).toBe(
         `//raw/DEF/${RED_BOX_IMAGE_URL}`,
       );
 
-      expect(vm.$el.querySelector('.added .image_file img').getAttribute('src')).toBe(
+      expect(vm.$el.querySelector('.added img').getAttribute('src')).toBe(
         `//raw/ABC/${GREEN_BOX_IMAGE_URL}`,
       );
 
diff --git a/spec/javascripts/vue_shared/components/diff_viewer/viewers/image_diff_viewer_spec.js b/spec/javascripts/vue_shared/components/diff_viewer/viewers/image_diff_viewer_spec.js
index 380effdb669..2d3e178d249 100644
--- a/spec/javascripts/vue_shared/components/diff_viewer/viewers/image_diff_viewer_spec.js
+++ b/spec/javascripts/vue_shared/components/diff_viewer/viewers/image_diff_viewer_spec.js
@@ -52,13 +52,9 @@ describe('ImageDiffViewer', () => {
     });
 
     setTimeout(() => {
-      expect(vm.$el.querySelector('.added .image_file img').getAttribute('src')).toBe(
-        GREEN_BOX_IMAGE_URL,
-      );
+      expect(vm.$el.querySelector('.added img').getAttribute('src')).toBe(GREEN_BOX_IMAGE_URL);
 
-      expect(vm.$el.querySelector('.deleted .image_file img').getAttribute('src')).toBe(
-        RED_BOX_IMAGE_URL,
-      );
+      expect(vm.$el.querySelector('.deleted img').getAttribute('src')).toBe(RED_BOX_IMAGE_URL);
 
       expect(vm.$el.querySelector('.view-modes-menu li.active').textContent.trim()).toBe('2-up');
       expect(vm.$el.querySelector('.view-modes-menu li:nth-child(2)').textContent.trim()).toBe(
@@ -81,9 +77,7 @@ describe('ImageDiffViewer', () => {
     });
 
     setTimeout(() => {
-      expect(vm.$el.querySelector('.added .image_file img').getAttribute('src')).toBe(
-        GREEN_BOX_IMAGE_URL,
-      );
+      expect(vm.$el.querySelector('.added img').getAttribute('src')).toBe(GREEN_BOX_IMAGE_URL);
 
       done();
     });
@@ -97,9 +91,7 @@ describe('ImageDiffViewer', () => {
     });
 
     setTimeout(() => {
-      expect(vm.$el.querySelector('.deleted .image_file img').getAttribute('src')).toBe(
-        RED_BOX_IMAGE_URL,
-      );
+      expect(vm.$el.querySelector('.deleted img').getAttribute('src')).toBe(RED_BOX_IMAGE_URL);
 
       done();
     });