diff --git a/mercurial/commands.py b/mercurial/commands.py
--- a/mercurial/commands.py
+++ b/mercurial/commands.py
@@ -3396,6 +3396,9 @@
 
     getfile = util.lrucachefunc(repo.file)
 
+    if (not pats and ui.configbool("grep", "pwd")):
+        pats = ('.',)
+
     def matchlines(body):
         begin = 0
         linenum = 0