diff --git a/tests/test-merge-halt.t b/tests/test-merge-halt.t
new file mode 100644
--- /dev/null
+++ b/tests/test-merge-halt.t
@@ -0,0 +1,74 @@
+  $ cat >> $HGRCPATH <<EOF
+  > [extensions]
+  > rebase=
+  > [phases]
+  > publish=False
+  > [merge]
+  > EOF
+
+  $ hg init repo
+  $ cd repo
+  $ echo a > a
+  $ echo b > b
+  $ hg commit -qAm ab
+  $ echo c >> a
+  $ echo c >> b
+  $ hg commit -qAm c
+  $ hg up -q ".^"
+  $ echo d >> a
+  $ echo d >> b
+  $ hg commit -qAm d
+
+Failing external merge tool blindly continues the merge
+  $ echo onfailure=continue >> $HGRCPATH
+  $ hg rebase -s 1 -d 2 --tool false
+  rebasing 1:1f28a51c3c9b "c"
+  merging a
+  merging b
+  merging a failed!
+  merging b failed!
+  unresolved conflicts (see hg resolve, then hg rebase --continue)
+  [1]
+
+  $ hg rebase --abort
+  rebase aborted
+
+Halting works on first failure
+  $ echo onfailure=halt >> $HGRCPATH
+  $ hg rebase -s 1 -d 2 --tool false
+  rebasing 1:1f28a51c3c9b "c"
+  merging a
+  merging b
+  merging a failed!
+  merging b failed!
+  unresolved conflicts (see hg resolve, then hg rebase --continue)
+  [1]
+
+  $ hg resolve --list
+  U a
+  U b
+
+  $ hg rebase --abort
+  rebase aborted
+
+Prompting works when selected
+  $ echo onfailure=prompt >> $HGRCPATH
+  $ cat <<EOS | hg rebase -s 1 -d 2 --tool false --config ui.interactive=1
+  > y
+  > n
+  > EOS
+  rebasing 1:1f28a51c3c9b "c"
+  merging a
+  merging b
+  merging a failed!
+  merging b failed!
+  unresolved conflicts (see hg resolve, then hg rebase --continue)
+  [1]
+
+  $ hg resolve --list
+  U a
+  U b
+
+  $ hg rebase --abort
+  rebase aborted
+