diff --git a/crates/edit/src/buffer/mod.rs b/crates/edit/src/buffer/mod.rs
index 777501f774a..31bdfdc6f11 100644
--- a/crates/edit/src/buffer/mod.rs
+++ b/crates/edit/src/buffer/mod.rs
@@ -2518,7 +2518,12 @@ impl TextBuffer {
 
         self.edit_begin_grouping();
 
-        for y in selection_beg.y.min(selection_end.y)..=selection_beg.y.max(selection_end.y) {
+        let [first, last] = minmax(selection_beg, selection_end);
+        // A selection that stops at column 0 covers no character on that last line,
+        // so that line is not part of the selection and must not be (un)indented.
+        let last_y = if last.x == 0 && last.y > first.y { last.y - 1 } else { last.y };
+
+        for y in first.y..=last_y {
             self.cursor_move_to_logical(Point { x: 0, y });
 
             let line_start_offset = self.cursor.offset;
diff --git a/crates/edit/tests/indent_789.rs b/crates/edit/tests/indent_789.rs
new file mode 100644
index 00000000000..2acb85513f7
--- /dev/null
+++ b/crates/edit/tests/indent_789.rs
@@ -0,0 +1,110 @@
+// Discriminating tests for issue #789
+// (tab/shift-tab with a selection occasionally (un)indents the line above or below it).
+
+use edit::buffer::TextBuffer;
+use edit::helpers::Point;
+
+fn contents(buf: &mut TextBuffer) -> String {
+    let mut s = String::new();
+    buf.save_as_string(&mut s);
+    s
+}
+
+fn buffer_with(text: &[u8]) -> TextBuffer {
+    let mut buf = TextBuffer::new(false).unwrap();
+    buf.set_crlf(false);
+    buf.set_insert_final_newline(false);
+    buf.set_indent_with_tabs(true);
+    buf.write_raw(text);
+    buf.cursor_move_to_logical(Point { x: 0, y: 0 });
+    buf
+}
+
+/// Select line 1 only, by holding Shift and pressing Down once from its start.
+/// That produces a selection from (0,1) to (0,2): every character of line 1 and
+/// zero characters of line 2. Only line 1 should be indented.
+#[test]
+fn indent_selection_ending_at_column_zero_of_next_line() {
+    let mut buf = buffer_with(b"aaa\nbbb\nccc\n");
+    buf.cursor_move_to_logical(Point { x: 0, y: 1 });
+    buf.selection_update_logical(Point { x: 0, y: 2 });
+
+    buf.indent_change(1);
+
+    assert_eq!(contents(&mut buf), "aaa\n\tbbb\nccc\n", "only the selected line should indent");
+}
+
+/// The same selection built backwards (anchor at the start of line 2, cursor moved
+/// up to the start of line 1), which is the shape in the second screenshot on #789.
+#[test]
+fn indent_backwards_selection_ending_at_column_zero() {
+    let mut buf = buffer_with(b"aaa\nbbb\nccc\n");
+    buf.cursor_move_to_logical(Point { x: 0, y: 2 });
+    buf.selection_update_logical(Point { x: 0, y: 1 });
+
+    buf.indent_change(1);
+
+    assert_eq!(contents(&mut buf), "aaa\n\tbbb\nccc\n", "only the selected line should indent");
+}
+
+/// Triple-click (`select_line`) selects (0,y)..(0,y+1), the same shape.
+#[test]
+fn indent_after_select_line() {
+    let mut buf = buffer_with(b"aaa\nbbb\nccc\n");
+    buf.cursor_move_to_logical(Point { x: 0, y: 1 });
+    buf.select_line();
+
+    buf.indent_change(1);
+
+    assert_eq!(contents(&mut buf), "aaa\n\tbbb\nccc\n", "only the clicked line should indent");
+}
+
+/// Unindent has the same boundary: the trailing line contributes no selected
+/// characters, so its indentation must be left alone.
+#[test]
+fn unindent_selection_ending_at_column_zero_of_next_line() {
+    let mut buf = buffer_with(b"\taaa\n\tbbb\n\tccc\n");
+    buf.cursor_move_to_logical(Point { x: 0, y: 1 });
+    buf.selection_update_logical(Point { x: 0, y: 2 });
+
+    buf.indent_change(-1);
+
+    assert_eq!(contents(&mut buf), "\taaa\nbbb\n\tccc\n", "only the selected line should unindent");
+}
+
+/// Two full lines selected the same way: (0,0)..(0,2) covers lines 0 and 1 only.
+#[test]
+fn indent_multiline_selection_ending_at_column_zero() {
+    let mut buf = buffer_with(b"aaa\nbbb\nccc\n");
+    buf.cursor_move_to_logical(Point { x: 0, y: 0 });
+    buf.selection_update_logical(Point { x: 0, y: 2 });
+
+    buf.indent_change(1);
+
+    assert_eq!(contents(&mut buf), "\taaa\n\tbbb\nccc\n", "line 2 is not part of the selection");
+}
+
+/// CONTROL: a selection that genuinely covers characters on the last line must
+/// still indent that line. This is what keeps the fix from over-correcting.
+#[test]
+fn indent_selection_covering_part_of_last_line() {
+    let mut buf = buffer_with(b"aaa\nbbb\nccc\n");
+    buf.cursor_move_to_logical(Point { x: 0, y: 1 });
+    buf.selection_update_logical(Point { x: 1, y: 2 });
+
+    buf.indent_change(1);
+
+    assert_eq!(contents(&mut buf), "aaa\n\tbbb\n\tccc\n", "both lines carry selected text");
+}
+
+/// CONTROL: with no selection at all, Tab inserts a tab at the cursor and Shift+Tab
+/// unindents the cursor's line only.
+#[test]
+fn indent_without_selection_touches_one_line() {
+    let mut buf = buffer_with(b"aaa\n\tbbb\nccc\n");
+    buf.cursor_move_to_logical(Point { x: 1, y: 1 });
+
+    buf.indent_change(-1);
+
+    assert_eq!(contents(&mut buf), "aaa\nbbb\nccc\n", "only the cursor's line should unindent");
+}