diff --git a/e2e-tests/chat_mode.spec.ts b/e2e-tests/chat_mode.spec.ts
index 329113b..d2ff33d 100644
--- a/e2e-tests/chat_mode.spec.ts
+++ b/e2e-tests/chat_mode.spec.ts
@@ -22,3 +22,37 @@ test("chat mode selector - ask mode", async ({ po }) => {
   await po.snapshotServerDump("all-messages");
   await po.snapshotMessages({ replaceDumpPath: true });
 });
+
+test("dyadwrite edit and save - basic flow", async ({ po }) => {
+  await po.setUp({ autoApprove: true });
+  await po.importApp("minimal");
+  await po.clickNewChat();
+
+  await po.sendPrompt(
+    "Create a simple React component in src/components/Hello.tsx",
+  );
+  await po.waitForChatCompletion();
+
+  await po.clickEditButton();
+  await po.editFileContent("// Test modification\n");
+
+  await po.saveFile();
+
+  await po.snapshotMessages({ replaceDumpPath: true });
+});
+
+test("dyadwrite edit and cancel", async ({ po }) => {
+  await po.setUp({ autoApprove: true });
+  await po.importApp("minimal");
+  await po.clickNewChat();
+
+  await po.sendPrompt("Create a utility function in src/utils/helper.ts");
+  await po.waitForChatCompletion();
+
+  await po.clickEditButton();
+
+  await po.editFileContent("// This should be discarded\n");
+  await po.cancelEdit();
+
+  await po.snapshotMessages({ replaceDumpPath: true });
+});
diff --git a/e2e-tests/helpers/test_helper.ts b/e2e-tests/helpers/test_helper.ts
index 4bea2bb..8d3c6b7 100644
--- a/e2e-tests/helpers/test_helper.ts
+++ b/e2e-tests/helpers/test_helper.ts
@@ -431,6 +431,27 @@ export class PageObject {
   async clickRestart() {
     await this.page.getByRole("button", { name: "Restart" }).click();
   }
+  ////////////////////////////////
+  // Inline code editor
+  ////////////////////////////////
+  async clickEditButton() {
+    await this.page.locator('button:has-text("Edit")').first().click();
+  }
+
+  async editFileContent(content: string) {
+    const editor = this.page.locator(".monaco-editor textarea").first();
+    await editor.focus();
+    await editor.press("Home");
+    await editor.type(content);
+  }
+
+  async saveFile() {
+    await this.page.locator('[data-testid="save-file-button"]').click();
+  }
+
+  async cancelEdit() {
+    await this.page.locator('button:has-text("Cancel")').first().click();
+  }
 
   ////////////////////////////////
   // Preview panel
diff --git a/e2e-tests/snapshots/chat_mode.spec.ts_dyadwrite-edit-and-cancel-1.aria.yml b/e2e-tests/snapshots/chat_mode.spec.ts_dyadwrite-edit-and-cancel-1.aria.yml
new file mode 100644
index 0000000..40baf11
--- /dev/null
+++ b/e2e-tests/snapshots/chat_mode.spec.ts_dyadwrite-edit-and-cancel-1.aria.yml
@@ -0,0 +1,20 @@
+- paragraph: Create a utility function in src/utils/helper.ts
+- img
+- text: file1.txt
+- button "Edit":
+  - img
+- img
+- text: file1.txt typescript
+- button "Copy":
+  - img
+- paragraph: More EOM
+- img
+- text: Approved
+- img
+- text: less than a minute ago
+- img
+- text: wrote 1 file(s)
+- button "Undo":
+  - img
+- button "Retry":
+  - img
\ No newline at end of file
diff --git a/e2e-tests/snapshots/chat_mode.spec.ts_dyadwrite-edit-and-save---basic-flow-1.aria.yml b/e2e-tests/snapshots/chat_mode.spec.ts_dyadwrite-edit-and-save---basic-flow-1.aria.yml
new file mode 100644
index 0000000..8a18bd3
--- /dev/null
+++ b/e2e-tests/snapshots/chat_mode.spec.ts_dyadwrite-edit-and-save---basic-flow-1.aria.yml
@@ -0,0 +1,24 @@
+- paragraph: Create a simple React component in src/components/Hello.tsx
+- img
+- text: file1.txt
+- button "Cancel":
+  - img
+- img
+- text: file1.txt file1.txt
+- button [disabled]:
+  - img
+- img
+- code:
+  - textbox "Editor content"
+  - list
+- paragraph: More EOM
+- img
+- text: Approved
+- img
+- text: less than a minute ago
+- img
+- text: wrote 1 file(s)
+- button "Undo":
+  - img
+- button "Retry":
+  - img
\ No newline at end of file
diff --git a/src/components/chat/DyadWrite.tsx b/src/components/chat/DyadWrite.tsx
index 49dc09f..6b45709 100644
--- a/src/components/chat/DyadWrite.tsx
+++ b/src/components/chat/DyadWrite.tsx
@@ -7,9 +7,14 @@ import {
   Pencil,
   Loader,
   CircleX,
+  Edit,
+  X,
 } from "lucide-react";
 import { CodeHighlight } from "./CodeHighlight";
 import { CustomTagState } from "./stateTypes";
+import { FileEditor } from "../preview_panel/FileEditor";
+import { useAtomValue } from "jotai";
+import { selectedAppIdAtom } from "@/atoms/appAtoms";
 
 interface DyadWriteProps {
   children?: ReactNode;
@@ -30,9 +35,20 @@ export const DyadWrite: React.FC<DyadWriteProps> = ({
   const path = pathProp || node?.properties?.path || "";
   const description = descriptionProp || node?.properties?.description || "";
   const state = node?.properties?.state as CustomTagState;
-  const inProgress = state === "pending";
-  const aborted = state === "aborted";
 
+  const aborted = state === "aborted";
+  const appId = useAtomValue(selectedAppIdAtom);
+  const [isEditing, setIsEditing] = useState(false);
+  const inProgress = state === "pending";
+
+  const handleCancel = () => {
+    setIsEditing(false);
+  };
+
+  const handleEdit = () => {
+    setIsEditing(true);
+    setIsContentVisible(true);
+  };
   // Extract filename from path
   const fileName = path ? path.split("/").pop() : "";
 
@@ -69,6 +85,35 @@ export const DyadWrite: React.FC<DyadWriteProps> = ({
           )}
         </div>
         <div className="flex items-center">
+          {!inProgress && (
+            <>
+              {isEditing ? (
+                <>
+                  <button
+                    onClick={(e) => {
+                      e.stopPropagation();
+                      handleCancel();
+                    }}
+                    className="flex items-center gap-1 text-xs text-gray-500 hover:text-gray-700 dark:text-gray-400 dark:hover:text-gray-200 px-2 py-1 rounded cursor-pointer"
+                  >
+                    <X size={14} />
+                    Cancel
+                  </button>
+                </>
+              ) : (
+                <button
+                  onClick={(e) => {
+                    e.stopPropagation();
+                    handleEdit();
+                  }}
+                  className="flex items-center gap-1 text-xs text-gray-500 hover:text-gray-700 dark:text-gray-400 dark:hover:text-gray-200 px-2 py-1 rounded cursor-pointer"
+                >
+                  <Edit size={14} />
+                  Edit
+                </button>
+              )}
+            </>
+          )}
           {isContentVisible ? (
             <ChevronsDownUp
               size={20}
@@ -98,9 +143,15 @@ export const DyadWrite: React.FC<DyadWriteProps> = ({
           className="text-xs cursor-text"
           onClick={(e) => e.stopPropagation()}
         >
-          <CodeHighlight className="language-typescript">
-            {children}
-          </CodeHighlight>
+          {isEditing ? (
+            <div className="h-96 min-h-96 border border-gray-200 dark:border-gray-700 rounded overflow-hidden">
+              <FileEditor appId={appId ?? null} filePath={path} />
+            </div>
+          ) : (
+            <CodeHighlight className="language-typescript">
+              {children}
+            </CodeHighlight>
+          )}
         </div>
       )}
     </div>