diff --git a/mercurial/help/internals/revlogs.txt b/mercurial/help/internals/revlogs.txt
--- a/mercurial/help/internals/revlogs.txt
+++ b/mercurial/help/internals/revlogs.txt
@@ -66,6 +66,13 @@
 
 0
    Store revision data inline.
+1
+   Sparse delta chains. When set, delta chains (see below) may cover
+   long spans in the revlog and readers should perform sparse reads to
+   minimize the number of bytes that must be read to resolve a revision.
+   Historically, revlogs limited the total linear span between a revision's
+   first and last delta and readers performed a read of all the bytes
+   in between.
 
 The following header values are common:
 
@@ -162,6 +169,9 @@
 There is no dedicated *generaldelta* revlog format flag. Instead,
 the feature is implied enabled by default.
 
+There is a revlog format flag that indicates whether sparse delta chains
+and reading should be used.
+
 Delta Chains
 ============
 
diff --git a/mercurial/localrepo.py b/mercurial/localrepo.py
--- a/mercurial/localrepo.py
+++ b/mercurial/localrepo.py
@@ -363,7 +363,7 @@
 
 # Increment the sub-version when the revlog v2 format changes to lock out old
 # clients.
-REVLOGV2_REQUIREMENT = 'exp-revlogv2.1'
+REVLOGV2_REQUIREMENT = 'exp-revlogv2.2'
 
 # A repository with the sparserevlog feature will have delta chains that
 # can spread over a larger span. Sparse reading cuts these large spans into
@@ -772,8 +772,8 @@
     options[b'sparse-read-min-gap-size'] = srmingapsize
 
     sparserevlog = SPARSEREVLOG_REQUIREMENT in requirements
-    options[b'sparse-revlog'] = sparserevlog
     if sparserevlog:
+        options[b'sparse-revlog'] = True
         options[b'generaldelta'] = True
 
     maxchainlen = None
diff --git a/mercurial/revlog.py b/mercurial/revlog.py
--- a/mercurial/revlog.py
+++ b/mercurial/revlog.py
@@ -37,6 +37,7 @@
 from .revlogutils.constants import (
     FLAG_GENERALDELTA,
     FLAG_INLINE_DATA,
+    FLAG_SPARSE_DELTA_CHAINS,
     REVIDX_DEFAULT_FLAGS,
     REVIDX_ELLIPSIS,
     REVIDX_EXTSTORED,
@@ -83,6 +84,7 @@
 REVLOGV2
 FLAG_INLINE_DATA
 FLAG_GENERALDELTA
+FLAG_SPARSE_DELTA_CHAINS
 REVLOG_DEFAULT_FLAGS
 REVLOG_DEFAULT_FORMAT
 REVLOG_DEFAULT_VERSION
@@ -392,6 +394,10 @@
 
         if 'revlogv2' in opts:
             newversionflags = REVLOGV2 | FLAG_INLINE_DATA
+
+            if 'sparse-revlog' not in opts or opts.get('sparse-revlog'):
+                newversionflags |= FLAG_SPARSE_DELTA_CHAINS
+
         elif 'revlogv1' in opts:
             newversionflags = REVLOGV1 | FLAG_INLINE_DATA
             if 'generaldelta' in opts:
@@ -412,10 +418,6 @@
             self._maxdeltachainspan = opts['maxdeltachainspan']
         if self._mmaplargeindex and 'mmapindexthreshold' in opts:
             mmapindexthreshold = opts['mmapindexthreshold']
-        self._sparserevlog = bool(opts.get('sparse-revlog', False))
-        withsparseread = bool(opts.get('with-sparse-read', False))
-        # sparse-revlog forces sparse-read
-        self._withsparseread = self._sparserevlog or withsparseread
         if 'sparse-read-density-threshold' in opts:
             self._srdensitythreshold = opts['sparse-read-density-threshold']
         if 'sparse-read-min-gap-size' in opts:
@@ -467,6 +469,8 @@
 
             self._inline = False
             self._generaldelta = False
+            self._sparserevlog = False
+            self._withsparseread = False
 
         elif fmt == REVLOGV1:
             if flags & ~REVLOGV1_FLAGS:
@@ -477,6 +481,11 @@
             self._inline = versionflags & FLAG_INLINE_DATA
             self._generaldelta = versionflags & FLAG_GENERALDELTA
 
+            self._sparserevlog = bool(opts.get('sparse-revlog', False))
+            withsparseread = bool(opts.get('with-sparse-read', False))
+            # sparse-revlog forces sparse-read
+            self._withsparseread = self._sparserevlog or withsparseread
+
         elif fmt == REVLOGV2:
             if flags & ~REVLOGV2_FLAGS:
                 raise error.RevlogError(_('unknown flags (%#04x) in version %d '
@@ -487,6 +496,9 @@
             # generaldelta implied by version 2 revlogs.
             self._generaldelta = True
 
+            self._sparserevlog = versionflags & FLAG_SPARSE_DELTA_CHAINS
+            self._withsparseread = versionflags & FLAG_SPARSE_DELTA_CHAINS
+
         else:
             raise error.RevlogError(_('unknown version (%d) in revlog %s') %
                                     (fmt, self.indexfile))
diff --git a/mercurial/revlogutils/constants.py b/mercurial/revlogutils/constants.py
--- a/mercurial/revlogutils/constants.py
+++ b/mercurial/revlogutils/constants.py
@@ -24,11 +24,13 @@
 FLAG_INLINE_DATA = (1 << 16)
 # Only used by v1, implied by v2.
 FLAG_GENERALDELTA = (1 << 17)
+# Only used by v2.
+FLAG_SPARSE_DELTA_CHAINS = (1 << 17)
 REVLOG_DEFAULT_FLAGS = FLAG_INLINE_DATA
 REVLOG_DEFAULT_FORMAT = REVLOGV1
 REVLOG_DEFAULT_VERSION = REVLOG_DEFAULT_FORMAT | REVLOG_DEFAULT_FLAGS
 REVLOGV1_FLAGS = FLAG_INLINE_DATA | FLAG_GENERALDELTA
-REVLOGV2_FLAGS = FLAG_INLINE_DATA
+REVLOGV2_FLAGS = FLAG_INLINE_DATA | FLAG_SPARSE_DELTA_CHAINS
 
 # revlog index flags
 
diff --git a/tests/test-revlog-v2.t b/tests/test-revlog-v2.t
--- a/tests/test-revlog-v2.t
+++ b/tests/test-revlog-v2.t
@@ -22,7 +22,7 @@
   $ cd empty-repo
   $ cat .hg/requires
   dotencode
-  exp-revlogv2.1
+  exp-revlogv2.2
   fncache
   sparserevlog
   store
@@ -58,8 +58,8 @@
 
   $ f --hexdump --bytes 4 .hg/store/00changelog.i
   .hg/store/00changelog.i:
-  0000: 00 01 de ad                                     |....|
+  0000: 00 03 de ad                                     |....|
 
   $ f --hexdump --bytes 4 .hg/store/data/foo.i
   .hg/store/data/foo.i:
-  0000: 00 01 de ad                                     |....|
+  0000: 00 03 de ad                                     |....|