diff --git a/hgext/largefiles/reposetup.py b/hgext/largefiles/reposetup.py
--- a/hgext/largefiles/reposetup.py
+++ b/hgext/largefiles/reposetup.py
@@ -182,6 +182,13 @@ def reposetup(ui, repo):
                             else:
                                 added.append(lfile)
 
+                        # at this point, 'removed' contains largefiles
+                        # marked as 'R' in the working context.
+                        # then, largefiles not managed also in the target
+                        # context should be excluded from 'removed'.
+                        removed = [lfile for lfile in removed
+                                   if lfutil.standin(lfile) in ctx1]
+
                     # Standins no longer found in lfdirstate has been
                     # removed
                     for standin in ctx1.walk(lfutil.getstandinmatcher(self)):
diff --git a/tests/test-largefiles-update.t b/tests/test-largefiles-update.t
--- a/tests/test-largefiles-update.t
+++ b/tests/test-largefiles-update.t
@@ -543,4 +543,13 @@ changed, even if it is aborted by confli
   $ cat largeX
   largeX
 
+Test that "hg status" doesn't show removal of largefiles not managed
+in the target context.
+
+  $ hg update -q -C 4
+  $ hg remove largeX
+  $ hg status -A largeX
+  R largeX
+  $ hg status -A --rev '.^1' largeX
+
   $ cd ..