diff --git a/mercurial/help/internals/requirements.txt b/mercurial/help/internals/requirements.txt
--- a/mercurial/help/internals/requirements.txt
+++ b/mercurial/help/internals/requirements.txt
@@ -117,3 +117,14 @@
 Support for this requirement was added in Mercurial 3.4 (released
 August 2015). The requirement is currently experimental and is
 disabled by default.
+
+exp-sparse
+==========
+
+The working directory is sparse (only contains a subset of files).
+
+Support for this requirement was added in Mercurial 4.3 (released
+August 2017). This requirement and feature are experimental and may
+disappear in a future Mercurial release. The requirement will only
+be present on repositories that have opted in to a sparse working
+directory.
diff --git a/mercurial/localrepo.py b/mercurial/localrepo.py
--- a/mercurial/localrepo.py
+++ b/mercurial/localrepo.py
@@ -288,6 +288,7 @@
         'shared',
         'relshared',
         'dotencode',
+        'exp-sparse',
     }
     openerreqs = {
         'revlogv1',
@@ -419,6 +420,11 @@
             if inst.errno != errno.ENOENT:
                 raise
 
+        if 'exp-sparse' in self.requirements and not sparse.enabled:
+            raise error.RepoError(_('repository is using sparse feature but '
+                                    'sparse is not enabled; enable the '
+                                    '"sparse" extensions to access'))
+
         self.store = store.store(
                 self.requirements, self.sharedpath, vfsmod.vfs)
         self.spath = self.store.path
diff --git a/mercurial/sparse.py b/mercurial/sparse.py
--- a/mercurial/sparse.py
+++ b/mercurial/sparse.py
@@ -18,6 +18,7 @@
     match as matchmod,
     merge as mergemod,
     pycompat,
+    scmutil,
     util,
 )
 
@@ -522,13 +523,14 @@
     prunetemporaryincludes(repo)
 
 def _updateconfigandrefreshwdir(repo, includes, excludes, profiles,
-                                force=False):
+                                force=False, removing=False):
     """Update the sparse config and working directory state."""
     raw = repo.vfs.tryread('sparse')
     oldincludes, oldexcludes, oldprofiles = parseconfig(repo.ui, raw)
 
     oldstatus = repo.status()
     oldmatch = matcher(repo)
+    oldrequires = set(repo.requirements)
 
     # TODO remove this try..except once the matcher integrates better
     # with dirstate. We currently have to write the updated config
@@ -538,11 +540,21 @@
     # updated. But this requires massive rework to matcher() and its
     # consumers.
 
-    writeconfig(repo, includes, excludes, profiles)
+    if 'exp-sparse' in oldrequires and removing:
+        repo.requirements.discard('exp-sparse')
+        scmutil.writerequires(repo.vfs, repo.requirements)
+    elif 'exp-sparse' not in oldrequires:
+        repo.requirements.add('exp-sparse')
+        scmutil.writerequires(repo.vfs, repo.requirements)
 
     try:
+        writeconfig(repo, includes, excludes, profiles)
         return refreshwdir(repo, oldstatus, oldmatch, force=force)
     except Exception:
+        if repo.requirements != oldrequires:
+            repo.requirements.clear()
+            repo.requirements |= oldrequires
+            scmutil.writerequires(repo.vfs, repo.requirements)
         writeconfig(repo, oldincludes, oldexcludes, oldprofiles)
         raise
 
@@ -647,7 +659,8 @@
                         len(oldexclude - newexclude))
 
         fcounts = map(len, _updateconfigandrefreshwdir(
-            repo, newinclude, newexclude, newprofiles, force=force))
+            repo, newinclude, newexclude, newprofiles, force=force,
+            removing=reset))
 
         printchanges(repo.ui, opts, profilecount, includecount,
                      excludecount, *fcounts)
diff --git a/tests/test-sparse-requirement.t b/tests/test-sparse-requirement.t
new file mode 100644
--- /dev/null
+++ b/tests/test-sparse-requirement.t
@@ -0,0 +1,65 @@
+  $ hg init repo
+  $ cd repo
+
+  $ touch a.html b.html c.py d.py
+
+  $ cat > frontend.sparse << EOF
+  > [include]
+  > *.html
+  > EOF
+
+  $ hg -q commit -A -m initial
+
+  $ echo 1 > a.html
+  $ echo 1 > c.py
+  $ hg commit -m 'commit 1'
+
+Enable sparse profile
+
+  $ cat .hg/requires
+  dotencode
+  fncache
+  generaldelta
+  revlogv1
+  store
+
+  $ hg debugsparse --config extensions.sparse= --enable-profile frontend.sparse
+  $ ls
+  a.html
+  b.html
+
+Requirement for sparse added when sparse is enabled
+
+  $ cat .hg/requires
+  dotencode
+  exp-sparse
+  fncache
+  generaldelta
+  revlogv1
+  store
+
+Client without sparse enabled reacts properly
+
+  $ hg files
+  abort: repository is using sparse feature but sparse is not enabled; enable the "sparse" extensions to access!
+  [255]
+
+Requirement for sparse is removed when sparse is disabled
+
+  $ hg debugsparse --reset --config extensions.sparse=
+
+  $ cat .hg/requires
+  dotencode
+  fncache
+  generaldelta
+  revlogv1
+  store
+
+And client without sparse can access
+
+  $ hg files
+  a.html
+  b.html
+  c.py
+  d.py
+  frontend.sparse