We describe a new, microscopic model for diffusion that captures diffusion induced fluctuations at scales where the concept of concentration gives way to discrete particles. We show that in the limit as the number of particles $N \to \infty$, our model is equivalent to the classical stochastic diffusion equation (SDE). We test our new model and the SDE against Langevin dynamics in numerical simulations, and show that our model successfully reproduces the correct ensemble statistics, while the classical model fails.