diff --git a/observe/helpers.go b/observe/helpers.go
index 7becb322..992df320 100644
--- a/observe/helpers.go
+++ b/observe/helpers.go
@@ -381,6 +381,10 @@ func diffSuppressWhenWorkspace(k, prv, nxt string, d *schema.ResourceData) bool
 	return prv == nxt
 }
 
+func diffSuppressAlways(k, prv, nxt string, d *schema.ResourceData) bool {
+	return true
+}
+
 var link = regexp.MustCompile("(^[A-Za-z])|_([A-Za-z])")
 
 var matchFirstCap = regexp.MustCompile("(.)([A-Z][a-z]+)")
diff --git a/observe/resource_dataset.go b/observe/resource_dataset.go
index 73de03eb..88d6820f 100644
--- a/observe/resource_dataset.go
+++ b/observe/resource_dataset.go
@@ -157,6 +157,11 @@ func resourceDataset() *schema.Resource {
 				Default:          "rematerialize",
 				ValidateDiagFunc: validateEnums(gql.AllRematerializationModes),
 				Description:      descriptions.Get("dataset", "schema", "rematerialization_mode"),
+				// rematerialization_mode is a config option that only applies to the update operation
+				// (i.e. it's not a property of the dataset), and therefore it doesn't make sense to
+				// consider changes to *only* this field as a diff. It's only relevant when there are
+				// also changes to the OPAL.
+				DiffSuppressFunc: diffSuppressAlways,
 			},
 		},
 	}