diff --git a/mercurial/win32.py b/mercurial/win32.py
--- a/mercurial/win32.py
+++ b/mercurial/win32.py
@@ -12,6 +12,7 @@
 import msvcrt
 import os
 import random
+import stat
 import subprocess
 
 from . import (
@@ -522,11 +523,26 @@
 def unlink(f):
     '''try to implement POSIX' unlink semantics on Windows'''
 
-    if os.path.isdir(f):
-        # use EPERM because it is POSIX prescribed value, even though
-        # unlink(2) on directories returns EISDIR on Linux
-        raise IOError(errno.EPERM,
-                      "Unlinking directory not permitted: '%s'" % f)
+    # If the path doesn't exist, raise that exception.
+    # If it is a directory, emulate POSIX behavior.
+    try:
+        st = os.stat(f)
+        if stat.S_ISDIR(st.st_mode):
+            # use EPERM because it is POSIX prescribed value, even though
+            # unlink(2) on directories returns EISDIR on Linux
+            raise IOError(errno.EPERM,
+                          "Unlinking directory not permitted: '%s'" % f)
+    except OSError as e:
+        if e.errno == errno.ENOENT:
+            raise
+
+    # In the common case, a normal unlink will work. Try that first and fall
+    # back to more complexity if and only if we need to.
+    try:
+        os.unlink(f)
+        return
+    except (IOError, OSError) as e:
+        pass
 
     # POSIX allows to unlink and rename open files. Windows has serious
     # problems with doing that: