diff --git a/tests/test-sparse-notsparse.t b/tests/test-sparse-notsparse.t
new file mode 100644
--- /dev/null
+++ b/tests/test-sparse-notsparse.t
@@ -0,0 +1,37 @@
+Make sure the sparse extension does not break functionality when it gets
+loaded in a non-sparse repository.
+
+First create a base repository with sparse enabled.
+
+  $ hg init base
+  $ cd base
+  $ cat > .hg/hgrc <<EOF
+  > [extensions]
+  > sparse=$TESTDIR/../hgext3rd/sparse.py
+  > journal=
+  > EOF
+
+  $ echo a > file1
+  $ echo x > file2
+  $ hg ci -Aqm 'initial'
+  $ cd ..
+
+Now create a shared working copy that is not sparse.
+
+  $ hg --config extensions.share= share base shared
+  updating working directory
+  2 files updated, 0 files merged, 0 files removed, 0 files unresolved
+  $ cd shared
+  $ cat > .hg/hgrc <<EOF
+  > [extensions]
+  > share=
+  > sparse=!
+  > journal=
+  > EOF
+
+Make sure "hg diff" works in the non-sparse working directory.
+
+  $ echo z >> file1
+  $ hg diff |& grep -E 'Unknown exception|AttributeError'
+  ** Unknown exception encountered with possibly-broken third-party extension sparse
+  AttributeError: 'localrepository' object has no attribute 'sparsematch'