diff --git a/dvc/command/diff.py b/dvc/command/diff.py
index 3ddd3dd400..4842018a4a 100644
--- a/dvc/command/diff.py
+++ b/dvc/command/diff.py
@@ -17,12 +17,15 @@ def _digest(checksum):
     return "{}..{}".format(checksum["old"][0:8], checksum["new"][0:8])
 
 
-def _show_md(diff, show_hash=False):
+def _show_md(diff, show_hash=False, hide_missing=False):
     from dvc.utils.diff import table
 
     header = ["Status", "Hash", "Path"] if show_hash else ["Status", "Path"]
     rows = []
-    for status in ["added", "deleted", "modified"]:
+    statuses = ["added", "deleted", "modified"]
+    if not hide_missing:
+        statuses.append("not in cache")
+    for status in statuses:
         entries = diff.get(status, [])
         if not entries:
             continue
@@ -39,7 +42,7 @@ def _show_md(diff, show_hash=False):
 
 class CmdDiff(CmdBase):
     @staticmethod
-    def _format(diff):
+    def _format(diff, hide_missing=False):
         """
         Given a diff structure, generate a string of paths separated
         by new lines and grouped together by their state.
@@ -69,12 +72,16 @@ def _format(diff):
             "added": colorama.Fore.GREEN,
             "modified": colorama.Fore.YELLOW,
             "deleted": colorama.Fore.RED,
+            "not in cache": colorama.Fore.YELLOW,
         }
 
         summary = {}
         groups = []
 
-        for state in ["added", "deleted", "modified"]:
+        states = ["added", "deleted", "modified"]
+        if not hide_missing:
+            states.append("not in cache")
+        for state in states:
             summary[state] = 0
             entries = diff[state]
 
@@ -105,10 +112,16 @@ def _format(diff):
                 )
             )
 
-        groups.append(
+        if not sum(summary.values()):
+            return None
+
+        fmt = (
             "files summary: {added} added, {deleted} deleted,"
-            " {modified} modified".format_map(summary)
+            " {modified} modified"
         )
+        if not hide_missing:
+            fmt += ", {not in cache} not in cache"
+        groups.append(fmt.format_map(summary))
 
         return "\n\n".join(groups)
 
@@ -116,6 +129,9 @@ def run(self):
         try:
             diff = self.repo.diff(self.args.a_rev, self.args.b_rev)
             show_hash = self.args.show_hash
+            hide_missing = self.args.b_rev or self.args.hide_missing
+            if hide_missing:
+                del diff["not in cache"]
 
             for key, entries in diff.items():
                 entries = sorted(entries, key=lambda entry: entry["path"])
@@ -127,9 +143,11 @@ def run(self):
             if self.args.show_json:
                 logger.info(json.dumps(diff))
             elif self.args.show_md:
-                logger.info(_show_md(diff, show_hash))
+                logger.info(_show_md(diff, show_hash, hide_missing))
             elif diff:
-                logger.info(self._format(diff))
+                output = self._format(diff, hide_missing)
+                if output:
+                    logger.info(output)
 
         except DvcException:
             logger.exception("failed to get diff")
@@ -178,4 +196,9 @@ def add_parser(subparsers, parent_parser):
         action="store_true",
         default=False,
     )
+    diff_parser.add_argument(
+        "--hide-missing",
+        help="Hide missing cache file status.",
+        action="store_true",
+    )
     diff_parser.set_defaults(func=CmdDiff)
diff --git a/dvc/repo/diff.py b/dvc/repo/diff.py
index 2fa261683d..17ef236c82 100644
--- a/dvc/repo/diff.py
+++ b/dvc/repo/diff.py
@@ -36,7 +36,14 @@ def diff(self, a_rev="HEAD", b_rev=None):
     # Compare paths between the old and new tree.
     # set() efficiently converts dict keys to a set
     added = sorted(set(new) - set(old))
-    deleted = sorted(set(old) - set(new))
+    deleted_or_missing = set(old) - set(new)
+    if b_rev == "workspace":
+        # missing status is only applicable when diffing local workspace
+        # against a commit
+        missing = sorted(_filter_missing(self, deleted_or_missing))
+    else:
+        missing = []
+    deleted = sorted(deleted_or_missing - set(missing))
     modified = sorted(set(old) & set(new))
 
     ret = {
@@ -47,6 +54,9 @@ def diff(self, a_rev="HEAD", b_rev=None):
             for path in modified
             if old[path] != new[path]
         ],
+        "not in cache": [
+            {"path": path, "hash": old[path]} for path in missing
+        ],
     }
 
     return ret if any(ret.values()) else {}
@@ -104,3 +114,13 @@ def _dir_output_paths(repo_tree, output):
             yield str(fname), repo_tree.get_hash(fname).value
     except NoRemoteError:
         logger.warning("dir cache entry for '%s' is missing", output)
+
+
+def _filter_missing(repo, paths):
+    repo_tree = RepoTree(repo, stream=True)
+    for path in paths:
+        metadata = repo_tree.metadata(path)
+        if metadata.is_dvc:
+            out = metadata.outs[0]
+            if out.status()[str(out)] == "not in cache":
+                yield path
diff --git a/tests/func/test_diff.py b/tests/func/test_diff.py
index 1eda16f7a4..6f296aa35e 100644
--- a/tests/func/test_diff.py
+++ b/tests/func/test_diff.py
@@ -28,6 +28,7 @@ def test_added(tmp_dir, scm, dvc):
         "added": [{"path": "file", "hash": digest("text")}],
         "deleted": [],
         "modified": [],
+        "not in cache": [],
     }
 
 
@@ -55,6 +56,7 @@ def test_no_cache_entry(tmp_dir, scm, dvc):
                 "hash": {"old": digest("first"), "new": digest("second")},
             }
         ],
+        "not in cache": [],
     }
 
 
@@ -66,6 +68,7 @@ def test_deleted(tmp_dir, scm, dvc):
         "added": [],
         "deleted": [{"path": "file", "hash": digest("text")}],
         "modified": [],
+        "not in cache": [],
     }
 
 
@@ -82,6 +85,7 @@ def test_modified(tmp_dir, scm, dvc):
                 "hash": {"old": digest("first"), "new": digest("second")},
             }
         ],
+        "not in cache": [],
     }
 
 
@@ -98,12 +102,14 @@ def test_refs(tmp_dir, scm, dvc):
         "added": [],
         "deleted": [],
         "modified": [{"path": "file", "hash": {"old": HEAD_1, "new": HEAD}}],
+        "not in cache": [],
     }
 
     assert dvc.diff("HEAD~2", "HEAD~1") == {
         "added": [],
         "deleted": [],
         "modified": [{"path": "file", "hash": {"old": HEAD_2, "new": HEAD_1}}],
+        "not in cache": [],
     }
 
     with pytest.raises(DvcException, match=r"unknown Git revision 'missing'"):
@@ -134,6 +140,7 @@ def test_directories(tmp_dir, scm, dvc):
         ],
         "deleted": [],
         "modified": [],
+        "not in cache": [],
     }
 
     assert dvc.diff(":/directory", ":/modify") == {
@@ -152,6 +159,7 @@ def test_directories(tmp_dir, scm, dvc):
                 "hash": {"old": digest("2"), "new": digest("two")},
             },
         ],
+        "not in cache": [],
     }
 
     assert dvc.diff(":/modify", ":/delete") == {
@@ -168,6 +176,7 @@ def test_directories(tmp_dir, scm, dvc):
                 },
             }
         ],
+        "not in cache": [],
     }
 
 
@@ -189,6 +198,20 @@ def test_diff_no_cache(tmp_dir, scm, dvc):
     assert diff["added"] == []
     assert diff["deleted"] == []
     assert first(diff["modified"])["path"] == os.path.join("dir", "")
+    assert diff["not in cache"] == []
+
+    (tmp_dir / "dir" / "file").unlink()
+    remove(str(tmp_dir / "dir"))
+    diff = dvc.diff()
+    assert diff["added"] == []
+    assert diff["deleted"] == []
+    assert diff["modified"] == []
+    assert diff["not in cache"] == [
+        {
+            "path": os.path.join("dir", ""),
+            "hash": "f0f7a307d223921557c929f944bf5303.dir",
+        },
+    ]
 
 
 def test_diff_dirty(tmp_dir, scm, dvc):
@@ -223,6 +246,7 @@ def test_diff_dirty(tmp_dir, scm, dvc):
                 "path": os.path.join("dir", ""),
             }
         ],
+        "not in cache": [],
     }
 
 
diff --git a/tests/unit/command/test_diff.py b/tests/unit/command/test_diff.py
index 4e2b49ddb1..1d6986e07b 100644
--- a/tests/unit/command/test_diff.py
+++ b/tests/unit/command/test_diff.py
@@ -28,6 +28,7 @@ def test_default(mocker, caplog):
         "added": [{"path": "file", "hash": "00000000"}],
         "deleted": [],
         "modified": [],
+        "not in cache": [],
     }
     mocker.patch("dvc.repo.Repo.diff", return_value=diff)
 
@@ -36,7 +37,7 @@ def test_default(mocker, caplog):
         "Added:\n"
         "    file\n"
         "\n"
-        "files summary: 1 added, 0 deleted, 0 modified"
+        "files summary: 1 added, 0 deleted, 0 modified, 0 not in cache"
     ) in caplog.text
 
 
@@ -54,6 +55,7 @@ def test_show_hash(mocker, caplog):
             {"path": "file2", "hash": {"old": "AAAAAAAA", "new": "BBBBBBBB"}},
             {"path": "file1", "hash": {"old": "CCCCCCCC", "new": "DDDDDDDD"}},
         ],
+        "not in cache": [],
     }
     mocker.patch("dvc.repo.Repo.diff", return_value=diff)
     assert 0 == cmd.run()
@@ -67,7 +69,7 @@ def test_show_hash(mocker, caplog):
         "    CCCCCCCC..DDDDDDDD  file1\n"
         "    AAAAAAAA..BBBBBBBB  file2\n"
         "\n"
-        "files summary: 0 added, 2 deleted, 2 modified"
+        "files summary: 0 added, 2 deleted, 2 modified, 0 not in cache"
     ) in caplog.text
 
 
@@ -81,6 +83,7 @@ def test_show_json(mocker, caplog):
         ],
         "deleted": [],
         "modified": [],
+        "not in cache": [],
     }
     mocker.patch("dvc.repo.Repo.diff", return_value=diff)
 
@@ -88,6 +91,7 @@ def test_show_json(mocker, caplog):
     assert '"added": [{"path": "file1"}, {"path": "file2"}]' in caplog.text
     assert '"deleted": []' in caplog.text
     assert '"modified": []' in caplog.text
+    assert '"not in cache": []' in caplog.text
 
 
 def test_show_json_and_hash(mocker, caplog):
@@ -102,6 +106,7 @@ def test_show_json_and_hash(mocker, caplog):
         ],
         "deleted": [],
         "modified": [],
+        "not in cache": [],
     }
     mocker.patch("dvc.repo.Repo.diff", return_value=diff)
 
@@ -112,6 +117,28 @@ def test_show_json_and_hash(mocker, caplog):
     )
     assert '"deleted": []' in caplog.text
     assert '"modified": []' in caplog.text
+    assert '"not in cache": []' in caplog.text
+
+
+def test_show_json_hide_missing(mocker, caplog):
+    args = parse_args(["diff", "--show-json", "--hide-missing"])
+    cmd = args.func(args)
+    diff = {
+        "added": [
+            {"path": "file2", "hash": "22222222"},
+            {"path": "file1", "hash": "11111111"},
+        ],
+        "deleted": [],
+        "modified": [],
+        "not in cache": [],
+    }
+    mocker.patch("dvc.repo.Repo.diff", return_value=diff)
+
+    assert 0 == cmd.run()
+    assert '"added": [{"path": "file1"}, {"path": "file2"}]' in caplog.text
+    assert '"deleted": []' in caplog.text
+    assert '"modified": []' in caplog.text
+    assert '"not in cache": []' not in caplog.text
 
 
 @pytest.mark.parametrize("show_hash", [None, True, False])
@@ -126,7 +153,7 @@ def test_diff_show_md_and_hash(mock_show_md, mocker, caplog, show_hash):
     mocker.patch("dvc.repo.Repo.diff", return_value=diff.copy())
 
     assert 0 == cmd.run()
-    mock_show_md.assert_called_once_with(diff, show_hash)
+    mock_show_md.assert_called_once_with(diff, show_hash, False)
 
 
 def test_no_changes(mocker, caplog):
@@ -166,16 +193,18 @@ def test_show_md():
         ],
         "modified": [{"path": "file"}],
         "added": [{"path": "file"}],
+        "not in cache": [{"path": "file2"}],
     }
     assert _show_md(diff) == (
-        "| Status   | Path     |\n"
-        "|----------|----------|\n"
-        "| added    | file     |\n"
-        "| deleted  | zoo      |\n"
-        "| deleted  | data{sep}    |\n"
-        "| deleted  | data{sep}foo |\n"
-        "| deleted  | data{sep}bar |\n"
-        "| modified | file     |\n"
+        "| Status       | Path     |\n"
+        "|--------------|----------|\n"
+        "| added        | file     |\n"
+        "| deleted      | zoo      |\n"
+        "| deleted      | data{sep}    |\n"
+        "| deleted      | data{sep}foo |\n"
+        "| deleted      | data{sep}bar |\n"
+        "| modified     | file     |\n"
+        "| not in cache | file2    |\n"
     ).format(sep=os.path.sep)
 
 
@@ -191,14 +220,61 @@ def test_show_md_with_hash():
             {"path": "file", "hash": {"old": "AAAAAAAA", "new": "BBBBBBBB"}}
         ],
         "added": [{"path": "file", "hash": "00000000"}],
+        "not in cache": [{"path": "file2", "hash": "12345678"}],
     }
     assert _show_md(diff, show_hash=True) == (
-        "| Status   | Hash               | Path     |\n"
-        "|----------|--------------------|----------|\n"
-        "| added    | 00000000           | file     |\n"
-        "| deleted  | 22222              | zoo      |\n"
-        "| deleted  | XXXXXXXX           | data{sep}    |\n"
-        "| deleted  | 11111111           | data{sep}foo |\n"
-        "| deleted  | 00000000           | data{sep}bar |\n"
-        "| modified | AAAAAAAA..BBBBBBBB | file     |\n"
+        "| Status       | Hash               | Path     |\n"
+        "|--------------|--------------------|----------|\n"
+        "| added        | 00000000           | file     |\n"
+        "| deleted      | 22222              | zoo      |\n"
+        "| deleted      | XXXXXXXX           | data{sep}    |\n"
+        "| deleted      | 11111111           | data{sep}foo |\n"
+        "| deleted      | 00000000           | data{sep}bar |\n"
+        "| modified     | AAAAAAAA..BBBBBBBB | file     |\n"
+        "| not in cache | 12345678           | file2    |\n"
+    ).format(sep=os.path.sep)
+
+
+def test_show_md_hide_missing():
+    diff = {
+        "deleted": [
+            {"path": "zoo"},
+            {"path": os.path.join("data", "")},
+            {"path": os.path.join("data", "foo")},
+            {"path": os.path.join("data", "bar")},
+        ],
+        "modified": [{"path": "file"}],
+        "added": [{"path": "file"}],
+        "not in cache": [{"path": "file2"}],
+    }
+    assert _show_md(diff, hide_missing=True) == (
+        "| Status   | Path     |\n"
+        "|----------|----------|\n"
+        "| added    | file     |\n"
+        "| deleted  | zoo      |\n"
+        "| deleted  | data{sep}    |\n"
+        "| deleted  | data{sep}foo |\n"
+        "| deleted  | data{sep}bar |\n"
+        "| modified | file     |\n"
     ).format(sep=os.path.sep)
+
+
+def test_hide_missing(mocker, caplog):
+    args = parse_args(["diff", "--hide-missing"])
+    cmd = args.func(args)
+    diff = {
+        "added": [{"path": "file", "hash": "00000000"}],
+        "deleted": [],
+        "modified": [],
+        "not in cache": [],
+    }
+    mocker.patch("dvc.repo.Repo.diff", return_value=diff)
+
+    assert 0 == cmd.run()
+    assert (
+        "Added:\n"
+        "    file\n"
+        "\n"
+        "files summary: 1 added, 0 deleted, 0 modified"
+    ) in caplog.text
+    assert "not in cache" not in caplog.text