diff --git a/core/index.d.ts b/core/index.d.ts
index 8e9d43dc370..21a77f194ad 100644
--- a/core/index.d.ts
+++ b/core/index.d.ts
@@ -1515,7 +1515,7 @@ export interface ShowFilePayload {
 
 export interface ApplyToFilePayload {
   streamId: string;
-  filepath?: string;
+  filepath: string;
   text: string;
   toolCallId?: string;
   isSearchAndReplace?: boolean;
diff --git a/extensions/vscode/src/apply/ApplyManager.ts b/extensions/vscode/src/apply/ApplyManager.ts
index de8344e1889..f40523b27ce 100644
--- a/extensions/vscode/src/apply/ApplyManager.ts
+++ b/extensions/vscode/src/apply/ApplyManager.ts
@@ -11,6 +11,7 @@ import { streamDiffLines } from "core/edit/streamDiffLines";
 import { pruneLinesFromBottom, pruneLinesFromTop } from "core/llm/countTokens";
 import { getMarkdownLanguageTagForFile } from "core/util";
 import { VerticalDiffManager } from "../diff/vertical/manager";
+import { openEditorAndRevealRange } from "../util/vscode";
 import { VsCodeIde } from "../VsCodeIde";
 import { VsCodeWebviewProtocol } from "../webviewProtocol";
 
@@ -32,18 +33,14 @@ export class ApplyManager {
     toolCallId,
     isSearchAndReplace,
   }: ApplyToFilePayload) {
-    if (filepath) {
-      await this.ensureFileOpen(filepath);
-    }
-
-    const { activeTextEditor } = vscode.window;
-    if (!activeTextEditor) {
-      void vscode.window.showErrorMessage("No active editor to apply edits to");
+    const editor = await this.getOrCreateEditor(filepath);
+    if (!editor) {
+      void vscode.window.showErrorMessage("Failed to open editor for file");
       return;
     }
 
     // Capture the original file content before applying changes
-    const originalFileContent = activeTextEditor.document.getText();
+    const originalFileContent = editor.document.getText();
 
     await this.webviewProtocol.request("updateApplyState", {
       streamId,
@@ -53,42 +50,37 @@ export class ApplyManager {
       toolCallId,
     });
 
-    const hasExistingDocument = !!activeTextEditor.document.getText().trim();
+    const hasExistingDocument = !!editor.document.getText().trim();
     if (hasExistingDocument) {
       // Currently `isSearchAndReplace` will always provide a full file rewrite
       // as the contents of `text`, so we can just instantly apply
       if (isSearchAndReplace) {
         await this.verticalDiffManager.instantApplyDiff(
+          filepath,
           originalFileContent,
           text,
           streamId,
           toolCallId,
         );
       } else {
-        await this.handleExistingDocument(
-          activeTextEditor,
-          text,
-          streamId,
-          toolCallId,
-        );
+        await this.handleExistingDocument(editor, text, streamId, toolCallId);
       }
     } else {
-      await this.handleEmptyDocument(
-        activeTextEditor,
-        text,
-        streamId,
-        toolCallId,
-      );
+      await this.handleEmptyDocument(editor, text, streamId, toolCallId);
     }
   }
 
-  private async ensureFileOpen(filepath: string): Promise<void> {
+  private async getOrCreateEditor(
+    filepath: string,
+  ): Promise<vscode.TextEditor | undefined> {
     const fileExists = await this.ide.fileExists(filepath);
     if (!fileExists) {
       await this.ide.writeFile(filepath, "");
-      await this.ide.openFile(filepath);
     }
-    await this.ide.openFile(filepath);
+    const uri = filepath.startsWith("file://")
+      ? vscode.Uri.parse(filepath)
+      : vscode.Uri.file(filepath);
+    return openEditorAndRevealRange(uri);
   }
 
   private modelIsTooFastForStreaming(model: string): boolean {
diff --git a/extensions/vscode/src/diff/vertical/manager.ts b/extensions/vscode/src/diff/vertical/manager.ts
index 059efe0aee4..4c5d9161a09 100644
--- a/extensions/vscode/src/diff/vertical/manager.ts
+++ b/extensions/vscode/src/diff/vertical/manager.ts
@@ -16,6 +16,7 @@ import { EDIT_MODE_STREAM_ID } from "core/edit/constants";
 import { stripImages } from "core/util/messageContent";
 import { getLastNPathParts } from "core/util/uri";
 import { editOutcomeTracker } from "../../extension/EditOutcomeTracker";
+import { openEditorAndRevealRange } from "../../util/vscode";
 import { VerticalDiffHandler, VerticalDiffHandlerOptions } from "./handler";
 import { getFirstChangedLine } from "./util";
 
@@ -296,6 +297,7 @@ export class VerticalDiffManager {
   }
 
   async instantApplyDiff(
+    filepath: string,
     oldContent: string,
     newContent: string,
     streamId: string,
@@ -303,17 +305,16 @@ export class VerticalDiffManager {
   ) {
     vscode.commands.executeCommand("setContext", "continue.diffVisible", true);
 
-    const editor = vscode.window.activeTextEditor;
+    const uri = vscode.Uri.parse(filepath);
+    const editor = await openEditorAndRevealRange(uri);
     if (!editor) {
       return;
     }
 
-    const fileUri = editor.document.uri.toString();
-
     const myersDiffs = myersDiff(oldContent, newContent);
 
     const diffHandler = this.createVerticalDiffHandler(
-      fileUri,
+      filepath,
       0,
       editor.document.lineCount - 1,
       {
@@ -324,7 +325,7 @@ export class VerticalDiffManager {
             status,
             numDiffs,
             fileContent,
-            filepath: fileUri,
+            filepath,
             toolCallId,
           }),
         streamId,
@@ -347,9 +348,9 @@ export class VerticalDiffManager {
     await this.webviewProtocol.request("updateApplyState", {
       streamId,
       status: "done",
-      numDiffs: this.fileUriToCodeLens.get(fileUri)?.length ?? 0,
+      numDiffs: this.fileUriToCodeLens.get(filepath)?.length ?? 0,
       fileContent: editor.document.getText(),
-      filepath: fileUri,
+      filepath,
       toolCallId,
     });
   }
diff --git a/gui/src/redux/thunks/handleApplyStateUpdate.ts b/gui/src/redux/thunks/handleApplyStateUpdate.ts
index a220af51f63..7b4a82356a2 100644
--- a/gui/src/redux/thunks/handleApplyStateUpdate.ts
+++ b/gui/src/redux/thunks/handleApplyStateUpdate.ts
@@ -10,6 +10,7 @@ import { updateEditStateApplyState } from "../slices/editState";
 import {
   acceptToolCall,
   errorToolCall,
+  setToolGenerated,
   updateApplyState,
   updateToolCallOutput,
 } from "../slices/sessionSlice";
@@ -49,16 +50,22 @@ export const handleApplyStateUpdate = createAsyncThunk<
           applyState.toolCallId,
         );
 
-        if (
-          applyState.status === "done" &&
-          toolCallState?.toolCall.function.name &&
-          getState().ui.toolSettings[toolCallState.toolCall.function.name] ===
-            "allowedWithoutPermission"
-        ) {
-          extra.ideMessenger.post("acceptDiff", {
-            streamId: applyState.streamId,
-            filepath: applyState.filepath,
-          });
+        if (applyState.status === "done") {
+          // diff is ready for user accept/reject - set status back to "generated"
+          dispatch(
+            setToolGenerated({ toolCallId: applyState.toolCallId, tools: [] }),
+          );
+
+          if (
+            toolCallState?.toolCall.function.name &&
+            getState().ui.toolSettings[toolCallState.toolCall.function.name] ===
+              "allowedWithoutPermission"
+          ) {
+            extra.ideMessenger.post("acceptDiff", {
+              streamId: applyState.streamId,
+              filepath: applyState.filepath,
+            });
+          }
         }
 
         if (applyState.status === "closed") {