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1. Download SourceGear DiffMerge: http://sourcegear.com/diffmerge/index.html

2. Add the following to your global .gitconfig file:

    [diff]
        tool = DiffMerge
    [difftool "DiffMerge"]
        cmd = 'C:/Program Files/SourceGear/Common/DiffMerge/sgdm.exe' "$LOCAL" "$REMOTE"
    [merge]
        tool = DiffMerge
    [mergetool "DiffMerge"]
        cmd = 'C:/Program Files/SourceGear/Common/DiffMerge/sgdm.exe' -merge -result="$PWD/$MERGED" "$PWD/$LOCAL" "$PWD/$BASE" "$PWD/$REMOTE"
        trustExitCode = true
    [mergetool]
        keepBackup = false
   

After following these steps, you can run git difftool and git mergetool to open SourceGear DiffMerge from the Git Bash prompt.