diff --git a/RELEASE_NOTES.md b/RELEASE_NOTES.md
index f86de86eb..74c3ce7a7 100644
--- a/RELEASE_NOTES.md
+++ b/RELEASE_NOTES.md
@@ -2,6 +2,7 @@
 # Next Release
 
 - [#175](https://github.com/IAMconsortium/pyam/pull/175) Update link to tutorial in readme.md 
+- [#174](https://github.com/IAMconsortium/pyam/pull/174) Add a function `difference()` to compare two IamDataFrames
 - [#171](https://github.com/IAMconsortium/pyam/pull/171) Fix a bug when reading from an `ixmp.TimeSeries` object, refactor to mitigate circular dependency
 - [#162](https://github.com/IAMconsortium/pyam/pull/162) Add a function to sum and append timeseries components to an aggregate variable
 - [#152](https://github.com/IAMconsortium/pyam/pull/152) Fix bug where scatter plots did not work with property metadata when using two variables (#136, #152)
diff --git a/pyam/core.py b/pyam/core.py
index c21a4b172..bddd8c601 100644
--- a/pyam/core.py
+++ b/pyam/core.py
@@ -1418,3 +1418,25 @@ def filter_by_meta(data, df, join_meta=False, **kwargs):
         data.index.name = None
 
     return data
+
+
+def compare(left, right, left_label='left', right_label='right',
+            drop_close=True, **kwargs):
+    """Compare the data in two IamDataFrames and return a pd.DataFrame
+
+    Parameters
+    ----------
+    left, right: IamDataFrames
+        the IamDataFrames to be compared
+    left_label, right_label: str, default `left`, `right`
+        column names of the returned dataframe
+    drop_close: bool, default True
+        remove all data where `left` and `right` are close
+    kwargs: passed to `np.isclose()`
+    """
+    ret = pd.concat({right_label: right.data.set_index(right._LONG_IDX),
+                     left_label: left.data.set_index(left._LONG_IDX)}, axis=1)
+    ret.columns = ret.columns.droplevel(1)
+    if drop_close:
+        ret = ret[~np.isclose(ret[left_label], ret[right_label], **kwargs)]
+    return ret[[right_label, left_label]]
diff --git a/tests/test_feature_compare.py b/tests/test_feature_compare.py
new file mode 100644
index 000000000..d6074a926
--- /dev/null
+++ b/tests/test_feature_compare.py
@@ -0,0 +1,29 @@
+import copy
+import numpy as np
+import pandas as pd
+from pyam import compare, IAMC_IDX
+
+
+def test_compare(meta_df):
+    clone = copy.deepcopy(meta_df)
+    clone.data.iloc[0, clone.data.columns.get_loc('value')] = 2
+    clone.rename({'variable': {'Primary Energy|Coal': 'Primary Energy|Gas'}},
+                 inplace=True)
+
+    obs = compare(meta_df, clone, right_label='meta_df', left_label='clone')
+
+    exp = pd.DataFrame([
+        ['Primary Energy', 'EJ/y', 2005, 2, 1],
+        ['Primary Energy|Coal', 'EJ/y', 2005, np.nan, 0.5],
+        ['Primary Energy|Coal', 'EJ/y', 2010, np.nan, 3],
+        ['Primary Energy|Gas', 'EJ/y', 2005, 0.5, np.nan],
+        ['Primary Energy|Gas', 'EJ/y', 2010, 3, np.nan],
+    ],
+        columns=['variable', 'unit', 'year', 'meta_df', 'clone'],
+    )
+    exp['model'] = 'a_model'
+    exp['scenario'] = 'a_scenario'
+    exp['region'] = 'World'
+    exp = exp.set_index(IAMC_IDX + ['year'])
+
+    pd.testing.assert_frame_equal(obs, exp)