diff --git a/rust/hg-core/src/dirstate_tree/dirstate_map.rs b/rust/hg-core/src/dirstate_tree/dirstate_map.rs
--- a/rust/hg-core/src/dirstate_tree/dirstate_map.rs
+++ b/rust/hg-core/src/dirstate_tree/dirstate_map.rs
@@ -772,6 +772,32 @@
         Ok(())
     }
 
+    /// It is the responsibility of the caller to know that there was an entry
+    /// there before. Does not handle the removal of copy source
+    fn set_untracked(
+        &mut self,
+        filename: &HgPath,
+        old_entry: DirstateEntry,
+    ) -> Result<(), DirstateV2ParseError> {
+        let node = Self::get_or_insert_node(
+            self.on_disk,
+            &mut self.unreachable_bytes,
+            &mut self.root,
+            filename,
+            WithBasename::to_cow_owned,
+            |ancestor| {
+                ancestor.tracked_descendants_count = ancestor
+                    .tracked_descendants_count
+                    .checked_sub(1)
+                    .expect("tracked_descendants_count should be >= 0");
+            },
+        )?;
+        let mut new_entry = old_entry.clone();
+        new_entry.set_untracked();
+        node.data = NodeData::Entry(new_entry);
+        Ok(())
+    }
+
     fn set_clean(
         &mut self,
         filename: &HgPath,
@@ -933,6 +959,39 @@
         self.with_dmap_mut(|map| map.set_tracked(filename, old_entry_opt))
     }
 
+    pub fn set_untracked(
+        &mut self,
+        filename: &HgPath,
+    ) -> Result<bool, DirstateError> {
+        let old_entry_opt = self.get(filename)?;
+        match old_entry_opt {
+            None => Ok(false),
+            Some(old_entry) => {
+                if !old_entry.tracked() {
+                    // `DirstateMap::set_untracked` is not a noop if
+                    // already not tracked as it will decrement the
+                    // tracked counters while going down.
+                    return Ok(true);
+                }
+                if old_entry.added() {
+                    // Untracking an "added" entry will just result in a
+                    // worthless entry (and other parts of the code will
+                    // complain about it), just drop it entirely.
+                    self.drop_entry_and_copy_source(filename)?;
+                    return Ok(true);
+                }
+                if !old_entry.p2_info() {
+                    self.copy_map_remove(filename)?;
+                }
+
+                self.with_dmap_mut(|map| {
+                    map.set_untracked(filename, old_entry)?;
+                    Ok(true)
+                })
+            }
+        }
+    }
+
     pub fn set_clean(
         &mut self,
         filename: &HgPath,
diff --git a/rust/hg-cpython/src/dirstate/dirstate_map.rs b/rust/hg-cpython/src/dirstate/dirstate_map.rs
--- a/rust/hg-cpython/src/dirstate/dirstate_map.rs
+++ b/rust/hg-cpython/src/dirstate/dirstate_map.rs
@@ -142,6 +142,16 @@
         Ok(was_tracked.to_py_object(py))
     }
 
+    def set_untracked(&self, f: PyObject) -> PyResult<PyBool> {
+        let bytes = f.extract::<PyBytes>(py)?;
+        let path = HgPath::new(bytes.data(py));
+        let res = self.inner(py).borrow_mut().set_untracked(path);
+        let was_tracked = res.or_else(|_| {
+            Err(PyErr::new::<exc::OSError, _>(py, "Dirstate error".to_string()))
+        })?;
+        Ok(was_tracked.to_py_object(py))
+    }
+
     def set_clean(
         &self,
         f: PyObject,