diff --git a/tests/test-hgrc.t b/tests/test-hgrc.t
--- a/tests/test-hgrc.t
+++ b/tests/test-hgrc.t
@@ -1,11 +1,11 @@
-hide outer repo
-  $ hg init
-
 Use hgrc within $TESTTMP
 
   $ HGRCPATH=`pwd`/hgrc
   $ export HGRCPATH
 
+hide outer repo
+  $ hg init
+
 Use an alternate var for scribbling on hgrc to keep check-code from
 complaining about the important settings we may be overwriting: