diff --git a/CHANGELOG.md b/CHANGELOG.md
index 035a1b9f..194148df 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,11 @@
 # Monaco Editor Changelog
 
+## [0.42.0]
+
+- Uses new diff editor widget by default. Use `experimental.useVersion2: false` to use the old widget. The old widget will be replaced in the next update.
+- Diff editor uses inline mode by default when width is too small. Use the config option `useInlineViewWhenSpaceIsLimited` to control this behavior.
+- Fixes broken language features when a model is created before the editor.
+
 ## [0.41.0]
 
 - `IDiffEditor.diffReviewNext` was renamed to `IDiffEditor.accessibleDiffViewerNext`.
diff --git a/package-lock.json b/package-lock.json
index 0acf7137..ae809d5d 100644
--- a/package-lock.json
+++ b/package-lock.json
@@ -1,12 +1,12 @@
 {
 	"name": "monaco-editor",
-	"version": "0.41.0",
+	"version": "0.43.0",
 	"lockfileVersion": 2,
 	"requires": true,
 	"packages": {
 		"": {
 			"name": "monaco-editor",
-			"version": "0.41.0",
+			"version": "0.43.0",
 			"hasInstallScript": true,
 			"license": "MIT",
 			"devDependencies": {
@@ -25,7 +25,7 @@
 				"jsdom": "^19.0.0",
 				"jsonc-parser": "^3.0.0",
 				"mocha": "^9.2.0",
-				"monaco-editor-core": "0.41.0-rc1",
+				"monaco-editor-core": "0.42.0-rc1",
 				"parcel": "^2.7.0",
 				"pin-github-action": "^1.8.0",
 				"playwright": "^1.32.2",
@@ -5326,9 +5326,9 @@
 			"dev": true
 		},
 		"node_modules/monaco-editor-core": {
-			"version": "0.41.0-rc1",
-			"resolved": "https://registry.npmjs.org/monaco-editor-core/-/monaco-editor-core-0.41.0-rc1.tgz",
-			"integrity": "sha512-j7508K6ruPE62V2Do92FSVqa8UDDTz1pgBKxYI5QqBcytLot1xZYNZl3IVSxdFgjmStUBb+klj6uEL3N/H74NA==",
+			"version": "0.42.0-rc1",
+			"resolved": "https://registry.npmjs.org/monaco-editor-core/-/monaco-editor-core-0.42.0-rc1.tgz",
+			"integrity": "sha512-Y3MCaVVKAb+JTy80uL0FxgzOWRMeIa6VJb7T4yPBI6eFSin4Rnx7WDc2L0BRr+jS6GPH74i2xpL4EDoIAWDZmQ==",
 			"dev": true
 		},
 		"node_modules/mri": {
@@ -11037,9 +11037,9 @@
 			}
 		},
 		"monaco-editor-core": {
-			"version": "0.41.0-rc1",
-			"resolved": "https://registry.npmjs.org/monaco-editor-core/-/monaco-editor-core-0.41.0-rc1.tgz",
-			"integrity": "sha512-j7508K6ruPE62V2Do92FSVqa8UDDTz1pgBKxYI5QqBcytLot1xZYNZl3IVSxdFgjmStUBb+klj6uEL3N/H74NA==",
+			"version": "0.42.0-rc1",
+			"resolved": "https://registry.npmjs.org/monaco-editor-core/-/monaco-editor-core-0.42.0-rc1.tgz",
+			"integrity": "sha512-Y3MCaVVKAb+JTy80uL0FxgzOWRMeIa6VJb7T4yPBI6eFSin4Rnx7WDc2L0BRr+jS6GPH74i2xpL4EDoIAWDZmQ==",
 			"dev": true
 		},
 		"mri": {
diff --git a/package.json b/package.json
index d875a4e9..15ab30f9 100644
--- a/package.json
+++ b/package.json
@@ -1,7 +1,7 @@
 {
 	"name": "monaco-editor",
-	"version": "0.41.0",
-	"vscodeRef": "6445d93c81ebe42c4cbd7a60712e0b17d9463e97",
+	"version": "0.43.0",
+	"vscodeRef": "16e9205452dd417e32f164325b589b94892846b4",
 	"private": true,
 	"description": "A browser based code editor",
 	"homepage": "https://github.com/microsoft/monaco-editor",
@@ -52,7 +52,7 @@
 		"jsdom": "^19.0.0",
 		"jsonc-parser": "^3.0.0",
 		"mocha": "^9.2.0",
-		"monaco-editor-core": "0.41.0-rc1",
+		"monaco-editor-core": "0.42.0-rc1",
 		"parcel": "^2.7.0",
 		"pin-github-action": "^1.8.0",
 		"playwright": "^1.32.2",