diff --git a/agent/tools/utils/diff.py b/agent/tools/utils/diff.py
index 3801ffe5..1872f326 100644
--- a/agent/tools/utils/diff.py
+++ b/agent/tools/utils/diff.py
@@ -111,20 +111,39 @@ def fuzzy_find_text(content: str, old_text: str) -> FuzzyMatchResult:
             content_for_replacement=content
         )
     
-    # Try fuzzy match
-    fuzzy_content = normalize_for_fuzzy_match(content)
-    fuzzy_old_text = normalize_for_fuzzy_match(old_text)
-    
-    index = fuzzy_content.find(fuzzy_old_text)
-    if index != -1:
-        # Fuzzy match successful, use normalized content for replacement
-        return FuzzyMatchResult(
-            found=True,
-            index=index,
-            match_length=len(fuzzy_old_text),
-            content_for_replacement=fuzzy_content
-        )
-    
+    # Fuzzy match: the exact substring was not found, most likely because the
+    # whitespace differs (indentation, spaces around operators, trailing
+    # spaces). Locate the region in the ORIGINAL content using a
+    # whitespace-flexible pattern and return offsets into that original
+    # content.
+    #
+    # This must NOT replace inside a whitespace-normalized copy of the file:
+    # doing so previously returned the normalized copy as
+    # content_for_replacement, which caused the whole file to be rewritten
+    # with collapsed indentation (every untouched line got reformatted).
+    stripped = old_text.strip('\n')
+    if stripped.strip():
+        line_patterns = []
+        for line in stripped.split('\n'):
+            tokens = line.split()
+            if tokens:
+                # Tolerate flexible indentation and any run of blanks between
+                # tokens, matching the leniency of the old normalized compare.
+                line_patterns.append(
+                    r'[ \t]*' + r'[ \t]+'.join(re.escape(tok) for tok in tokens) + r'[ \t]*'
+                )
+            else:
+                line_patterns.append(r'[ \t]*')
+        pattern = '\n'.join(line_patterns)
+        match = re.search(pattern, content)
+        if match:
+            return FuzzyMatchResult(
+                found=True,
+                index=match.start(),
+                match_length=match.end() - match.start(),
+                content_for_replacement=content
+            )
+
     # Not found
     return FuzzyMatchResult(found=False)
 
diff --git a/tests/test_edit_tool.py b/tests/test_edit_tool.py
new file mode 100644
index 00000000..2d006674
--- /dev/null
+++ b/tests/test_edit_tool.py
@@ -0,0 +1,85 @@
+# encoding:utf-8
+"""
+Regression tests for the Edit tool's fuzzy matching.
+
+When the provided oldText does not match byte-for-byte (usually because the
+whitespace differs), the Edit tool falls back to a whitespace-tolerant fuzzy
+match. The fuzzy match must replace only the matched region in the original
+file. It previously rewrote the entire file from a whitespace-normalized copy,
+which collapsed the indentation of every untouched line and corrupted the file
+(e.g. broke Python indentation).
+"""
+import os
+import sys
+import tempfile
+import unittest
+
+sys.path.insert(0, os.path.join(os.path.dirname(__file__), ".."))
+
+from agent.tools.edit.edit import Edit
+
+
+class TestEditFuzzyPreservesWhitespace(unittest.TestCase):
+    def setUp(self):
+        self.work = tempfile.mkdtemp()
+        self.path = os.path.join(self.work, "sample.py")
+        self.original = (
+            "def foo():\n"
+            "    x = 1\n"
+            "    y = 2\n"
+            "    return x + y\n"
+        )
+        with open(self.path, "w", encoding="utf-8") as f:
+            f.write(self.original)
+        self.tool = Edit({"cwd": self.work})
+
+    def _read(self):
+        with open(self.path, "r", encoding="utf-8") as f:
+            return f.read()
+
+    def test_fuzzy_match_does_not_reformat_untouched_lines(self):
+        # oldText differs from the file only by extra spaces around '=', so the
+        # exact match fails and the fuzzy path is taken. Only the 'x = 1' line
+        # should change; the other lines must keep their 4-space indentation.
+        result = self.tool.execute({
+            "path": self.path,
+            "oldText": "    x  =  1",
+            "newText": "    x = 100",
+        })
+        self.assertEqual(result.status, "success", result.result)
+
+        expected = (
+            "def foo():\n"
+            "    x = 100\n"
+            "    y = 2\n"
+            "    return x + y\n"
+        )
+        self.assertEqual(self._read(), expected)
+
+    def test_exact_match_still_replaces_in_place(self):
+        result = self.tool.execute({
+            "path": self.path,
+            "oldText": "    y = 2",
+            "newText": "    y = 20",
+        })
+        self.assertEqual(result.status, "success", result.result)
+        self.assertEqual(
+            self._read(),
+            "def foo():\n    x = 1\n    y = 20\n    return x + y\n",
+        )
+
+    def test_multiline_fuzzy_match_preserves_surrounding_indentation(self):
+        result = self.tool.execute({
+            "path": self.path,
+            "oldText": "    x = 1\n    y  =  2",  # extra spaces on 2nd line
+            "newText": "    x = 9\n    y = 8",
+        })
+        self.assertEqual(result.status, "success", result.result)
+        self.assertEqual(
+            self._read(),
+            "def foo():\n    x = 9\n    y = 8\n    return x + y\n",
+        )
+
+
+if __name__ == "__main__":
+    unittest.main()