A method and system provides an improved representation of merge conflicts in a three-way merge operation of three sequences: Original, Version1, and Version2. A merge program first compares the three sequences to identify a list of difference chunks of elements between the Original and Version1, and a list of difference chunks between the Original and Version2. From the two sets of difference chunks, the merge program creates an annotated list of chunks. Each chunk in the annotated list is identified by a conflict flag that indicates whether the chunk is a part of a conflict and if it is, what sequence(s) being merged it belongs to. A merged document is then constructed based on the annotated list of chunks, with the chunks identified in the merged document with conflict markers for viewing by a user.