diff --git a/mercurial/context.py b/mercurial/context.py
--- a/mercurial/context.py
+++ b/mercurial/context.py
@@ -1826,9 +1826,14 @@
             if self._cache[path]['exists']:
                 if self._cache[path]['data']:
                     return self._cache[path]['data']
-                else:
+                elif path in self._wrappedctx:
                     # Must fallback here, too, because we only set flags.
                     return self._wrappedctx[path].data()
+                else:
+                    # the file was not present in parent, this can be an empty
+                    # backupfile created during merge. Let's return what we have
+                    # in cache
+                    return self._cache[path]['data']
             else:
                 raise error.ProgrammingError("No such file or directory: %s" %
                                              path)
diff --git a/tests/test-rebase-inmemory.t b/tests/test-rebase-inmemory.t
--- a/tests/test-rebase-inmemory.t
+++ b/tests/test-rebase-inmemory.t
@@ -797,5 +797,9 @@
   $ hg rebase -r . -d 1 --config ui.merge=internal:merge3
   rebasing 2:376089bb8d86 "remove the whitespace again" (tip)
   merging foo
-  abort: foo.orig@bb96b8f33f2a: not found in manifest!
-  [255]
+  hit merge conflicts; re-running rebase without in-memory merge
+  rebasing 2:376089bb8d86 "remove the whitespace again" (tip)
+  merging foo
+  warning: conflicts while merging foo! (edit, then use 'hg resolve --mark')
+  unresolved conflicts (see hg resolve, then hg rebase --continue)
+  [1]