diff --git a/api/onnx_web/diffusers/pipelines/panorama_xl.py b/api/onnx_web/diffusers/pipelines/panorama_xl.py
index fed65722..a0c92d07 100644
--- a/api/onnx_web/diffusers/pipelines/panorama_xl.py
+++ b/api/onnx_web/diffusers/pipelines/panorama_xl.py
@@ -12,6 +12,8 @@ from optimum.pipelines.diffusers.pipeline_stable_diffusion_xl_img2img import (
 )
 from optimum.pipelines.diffusers.pipeline_utils import preprocess, rescale_noise_cfg
 
+from ..utils import parse_regions
+
 logger = logging.getLogger(__name__)
 
 
@@ -299,6 +301,33 @@ class StableDiffusionXLPanoramaPipelineMixin(StableDiffusionXLImg2ImgPipelineMix
             negative_pooled_prompt_embeds=negative_pooled_prompt_embeds,
         )
 
+        # 3.b. Encode region prompts
+        regions = parse_regions(prompt)
+        region_embeds: List[Tuple[List[np.ndarray], Optional[np.ndarray], Optional[np.ndarray], Optional[np.ndarray]]] = []
+        add_region_embeds: List[np.ndarray] = []
+
+        for _top, _left, _bottom, _right, _mode, region_prompt in regions:
+            current_region_embeds = self._encode_prompt(
+                region_prompt,
+                num_images_per_prompt,
+                do_classifier_free_guidance,
+                negative_prompt,
+                prompt_embeds=prompt_embeds,
+                negative_prompt_embeds=negative_prompt_embeds,
+                pooled_prompt_embeds=pooled_prompt_embeds,
+                negative_pooled_prompt_embeds=negative_pooled_prompt_embeds,
+            )
+
+            if do_classifier_free_guidance:
+                current_region_embeds[0] = np.concatenate(
+                    (current_region_embeds[1], current_region_embeds[0]), axis=0
+                )
+                add_region_embeds.append(np.concatenate(
+                    (current_region_embeds[3], current_region_embeds[2]), axis=0
+                ))
+
+            region_embeds.append(current_region_embeds)
+
         # 4. Prepare timesteps
         self.scheduler.set_timesteps(num_inference_steps)
         timesteps = self.scheduler.timesteps
@@ -330,6 +359,7 @@ class StableDiffusionXLPanoramaPipelineMixin(StableDiffusionXLImg2ImgPipelineMix
                 (negative_pooled_prompt_embeds, add_text_embeds), axis=0
             )
             add_time_ids = np.concatenate((add_time_ids, add_time_ids), axis=0)
+
         add_time_ids = np.repeat(
             add_time_ids, batch_size * num_images_per_prompt, axis=0
         )
@@ -400,6 +430,75 @@ class StableDiffusionXLPanoramaPipelineMixin(StableDiffusionXLImg2ImgPipelineMix
                 value[:, :, h_start:h_end, w_start:w_end] += latents_view_denoised
                 count[:, :, h_start:h_end, w_start:w_end] += 1
 
+            for i in range(len(regions)):
+                top, left, bottom, right, mode, prompt = regions[i]
+                print("running region prompt", top, left, bottom, right, mode, prompt)
+
+                # convert coordinates to latent space
+                h_start = top // 8
+                h_end = bottom // 8
+                w_start = left // 8
+                w_end = right // 8
+
+                # get the latents corresponding to the current view coordinates
+                latents_for_view = latents[:, :, h_start:h_end, w_start:w_end]
+
+                # expand the latents if we are doing classifier free guidance
+                latent_model_input = (
+                    np.concatenate([latents_for_view] * 2)
+                    if do_classifier_free_guidance
+                    else latents_for_view
+                )
+                latent_model_input = self.scheduler.scale_model_input(
+                    torch.from_numpy(latent_model_input), t
+                )
+                latent_model_input = latent_model_input.cpu().numpy()
+
+                # fetch region embeds
+                region_1 = region_embeds[i][0]
+                region_2 = add_region_embeds[i]
+
+                # predict the noise residual
+                timestep = np.array([t], dtype=timestep_dtype)
+                noise_pred = self.unet(
+                    sample=latent_model_input,
+                    timestep=timestep,
+                    encoder_hidden_states=region_1,
+                    text_embeds=region_2,
+                    time_ids=add_time_ids,
+                )
+                noise_pred = noise_pred[0]
+
+                # perform guidance
+                if do_classifier_free_guidance:
+                    noise_pred_uncond, noise_pred_text = np.split(noise_pred, 2)
+                    noise_pred = noise_pred_uncond + guidance_scale * (
+                        noise_pred_text - noise_pred_uncond
+                    )
+                    if guidance_rescale > 0.0:
+                        # Based on 3.4. in https://arxiv.org/pdf/2305.08891.pdf
+                        noise_pred = rescale_noise_cfg(
+                            noise_pred,
+                            noise_pred_text,
+                            guidance_rescale=guidance_rescale,
+                        )
+
+                # compute the previous noisy sample x_t -> x_t-1
+                scheduler_output = self.scheduler.step(
+                    torch.from_numpy(noise_pred),
+                    t,
+                    torch.from_numpy(latents_for_view),
+                    **extra_step_kwargs,
+                )
+                latents_view_denoised = scheduler_output.prev_sample.numpy()
+
+                if mode:
+                    value[:, :, h_start:h_end, w_start:w_end] = latents_view_denoised
+                    count[:, :, h_start:h_end, w_start:w_end] = 1
+                else:
+                    value[:, :, h_start:h_end, w_start:w_end] += latents_view_denoised
+                    count[:, :, h_start:h_end, w_start:w_end] += 1
+
             # take the MultiDiffusion step. Eq. 5 in MultiDiffusion paper: https://arxiv.org/abs/2302.08113
             latents = np.where(count > 0, value / count, value)
 
diff --git a/api/onnx_web/diffusers/utils.py b/api/onnx_web/diffusers/utils.py
index ab3c63c5..152b5bca 100644
--- a/api/onnx_web/diffusers/utils.py
+++ b/api/onnx_web/diffusers/utils.py
@@ -444,3 +444,9 @@ def slice_prompt(prompt: str, slice: int) -> str:
         return parts[min(slice, len(parts) - 1)]
     else:
         return prompt
+
+
+Region = Tuple[int, int, int, int, bool, str]
+
+def parse_regions(prompt: str) -> List[Region]:
+    return []