diff --git a/hgext/mq.py b/hgext/mq.py
--- a/hgext/mq.py
+++ b/hgext/mq.py
@@ -2186,20 +2186,17 @@ def reposetup(ui, repo):
 
             return tagscache
 
-        def _branchtags(self):
+        def _branchtags(self, partial, lrev):
             q = self.mq
             if not q.applied:
-                return super(mqrepo, self)._branchtags()
+                return super(mqrepo, self)._branchtags(partial, lrev)
 
             cl = self.changelog
             qbasenode = revlog.bin(q.applied[0].rev)
             if qbasenode not in cl.nodemap:
                 self.ui.warn('mq status file refers to unknown node %s\n'
                              % revlog.short(qbasenode))
-                return super(mqrepo, self)._branchtags()
-
-            self.branchcache = {} # avoid recursion in changectx
-            partial, last, lrev = self._readbranchcache()
+                return super(mqrepo, self)._branchtags(partial, lrev)
 
             qbase = cl.rev(qbasenode)
             start = lrev + 1
diff --git a/mercurial/localrepo.py b/mercurial/localrepo.py
--- a/mercurial/localrepo.py
+++ b/mercurial/localrepo.py
@@ -94,6 +94,8 @@ class localrepository(repo.repository):
         self.tagscache = None
         self._tagstypecache = None
         self.branchcache = None
+        self._ubranchcache = None  # UTF-8 version of branchcache
+        self._branchcachetip = None
         self.nodetagscache = None
         self.filterpats = {}
         self._datafilters = {}
@@ -344,9 +346,7 @@ class localrepository(repo.repository):
                 self.nodetagscache.setdefault(n, []).append(t)
         return self.nodetagscache.get(node, [])
 
-    def _branchtags(self):
-        partial, last, lrev = self._readbranchcache()
-
+    def _branchtags(self, partial, lrev):
         tiprev = self.changelog.count() - 1
         if lrev != tiprev:
             self._updatebranchcache(partial, lrev+1, tiprev+1)
@@ -355,16 +355,29 @@ class localrepository(repo.repository):
         return partial
 
     def branchtags(self):
-        if self.branchcache is not None:
+        tip = self.changelog.tip()
+        if self.branchcache is not None and self._branchcachetip == tip:
             return self.branchcache
 
-        self.branchcache = {} # avoid recursion in changectx
-        partial = self._branchtags()
+        oldtip = self._branchcachetip
+        self._branchcachetip = tip
+        if self.branchcache is None:
+            self.branchcache = {} # avoid recursion in changectx
+        else:
+            self.branchcache.clear() # keep using the same dict
+        if oldtip is None or oldtip not in self.changelog.nodemap:
+            partial, last, lrev = self._readbranchcache()
+        else:
+            lrev = self.changelog.rev(oldtip)
+            partial = self._ubranchcache
+
+        self._branchtags(partial, lrev)
 
         # the branch cache is stored on disk as UTF-8, but in the local
         # charset internally
         for k, v in partial.items():
             self.branchcache[util.tolocal(k)] = v
+        self._ubranchcache = partial
         return self.branchcache
 
     def _readbranchcache(self):
@@ -616,6 +629,9 @@ class localrepository(repo.repository):
         self.tagscache = None
         self._tagstypecache = None
         self.nodetagscache = None
+        self.branchcache = None
+        self._ubranchcache = None
+        self._branchcachetip = None
 
     def _lock(self, lockname, wait, releasefn, acquirefn, desc):
         try:
@@ -882,8 +898,8 @@ class localrepository(repo.repository):
                       parent2=xp2)
             tr.close()
 
-            if self.branchcache and "branch" in extra:
-                self.branchcache[util.tolocal(extra["branch"])] = n
+            if self.branchcache:
+                self.branchtags()
 
             if use_dirstate or update_dirstate:
                 self.dirstate.setparents(n)
@@ -2005,7 +2021,6 @@ class localrepository(repo.repository):
         if changesets > 0:
             # forcefully update the on-disk branch cache
             self.ui.debug(_("updating the branch cache\n"))
-            self.branchcache = None
             self.branchtags()
             self.hook("changegroup", node=hex(self.changelog.node(cor+1)),
                       source=srctype, url=url)