diff --git a/tests/test-sparse-merges.t b/tests/test-sparse-merges.t
--- a/tests/test-sparse-merges.t
+++ b/tests/test-sparse-merges.t
@@ -119,3 +119,67 @@
   0 files updated, 0 files merged, 0 files removed, 1 files unresolved
   use 'hg resolve' to retry unresolved file merges or 'hg merge --abort' to abandon
   [1]
+
+  $ cd ..
+
+Testing merging of a file which is renamed+modified on one side and modified on
+another
+
+  $ hg init mvtest
+  $ cd mvtest
+  $ echo "syntax: glob" >> .hgignore
+  $ echo "*.orig" >> .hgignore
+  $ hg ci -Aqm "added .hgignore"
+  $ for ch in a d; do echo foo > $ch; hg ci -Aqm "added "$ch; done;
+  $ cat >> .hg/hgrc <<EOF
+  > [alias]
+  > glog = log -GT "{rev}:{node|short} {desc}"
+  > [extensions]
+  > sparse =
+  > EOF
+
+  $ hg glog
+  @  2:f29feff37cfc added d
+  |
+  o  1:617125d27d6b added a
+  |
+  o  0:53f3774ed939 added .hgignore
+  
+  $ echo babar >> a
+  $ hg ci -m "added babar to a"
+
+  $ hg up '.^'
+  1 files updated, 0 files merged, 0 files removed, 0 files unresolved
+  $ hg mv a amove
+  $ hg ci -m "moved a to amove"
+  created new head
+
+  $ hg up 3
+  1 files updated, 0 files merged, 1 files removed, 0 files unresolved
+  $ hg glog
+  o  4:5d1e85955f6d moved a to amove
+  |
+  | @  3:a06e41a6c16c added babar to a
+  |/
+  o  2:f29feff37cfc added d
+  |
+  o  1:617125d27d6b added a
+  |
+  o  0:53f3774ed939 added .hgignore
+  
+  $ hg debugsparse --exclude "a"
+  $ ls
+  d
+
+  $ hg merge
+  abort: $ENOENT$: $TESTTMP/mvtest/a
+  [255]
+
+  $ hg up -C 4
+  1 files updated, 0 files merged, 0 files removed, 0 files unresolved
+
+  $ hg merge
+  merging amove and a to amove
+  abort: cannot add 'a' - it is outside the sparse checkout
+  (include file with `hg debugsparse --include <pattern>` or use `hg add -s <file>` to include file directory while adding)
+  [255]