diff --git a/mercurial/ui.py b/mercurial/ui.py
--- a/mercurial/ui.py
+++ b/mercurial/ui.py
@@ -122,7 +122,9 @@ class ui(object):
             try:
                 return self.cdata.get(section, name)
             except ConfigParser.InterpolationError, inst:
-                raise util.Abort(_("Error in configuration:\n%s") % inst)
+                raise util.Abort(_("Error in configuration section [%s] "
+                                   "parameter '%s':\n%s")
+                                 % (section, name, inst))
         if self.parentui is None:
             return default
         else:
@@ -144,7 +146,9 @@ class ui(object):
             try:
                 return self.cdata.getboolean(section, name)
             except ConfigParser.InterpolationError, inst:
-                raise util.Abort(_("Error in configuration:\n%s") % inst)
+                raise util.Abort(_("Error in configuration section [%s] "
+                                   "parameter '%s':\n%s")
+                                 % (section, name, inst))
         if self.parentui is None:
             return default
         else:
@@ -162,7 +166,8 @@ class ui(object):
             try:
                 items.update(dict(self.cdata.items(section)))
             except ConfigParser.InterpolationError, inst:
-                raise util.Abort(_("Error in configuration:\n%s") % inst)
+                raise util.Abort(_("Error in configuration section [%s]:\n%s")
+                                 % (section, inst))
         x = items.items()
         x.sort()
         return x
@@ -174,10 +179,14 @@ class ui(object):
             yield section, name, value
             seen[section, name] = 1
         for section in self.cdata.sections():
-            for name, value in self.cdata.items(section):
-                if (section, name) in seen: continue
-                yield section, name, value.replace('\n', '\\n')
-                seen[section, name] = 1
+            try:
+                for name, value in self.cdata.items(section):
+                    if (section, name) in seen: continue
+                    yield section, name, value.replace('\n', '\\n')
+                    seen[section, name] = 1
+            except ConfigParser.InterpolationError, inst:
+                raise util.Abort(_("Error in configuration section [%s]:\n%s")
+                                 % (section, inst))
         if self.parentui is not None:
             for parent in self.parentui.walkconfig(seen):
                 yield parent
diff --git a/tests/test-ui-config b/tests/test-ui-config
--- a/tests/test-ui-config
+++ b/tests/test-ui-config
@@ -1,6 +1,6 @@
 #!/usr/bin/env python
 
-from mercurial import ui
+from mercurial import ui, util
 
 testui = ui.ui()
 testui.updateopts(config=[
@@ -11,10 +11,19 @@ testui.updateopts(config=[
     'lists.list2=foo bar baz',
     'lists.list3=alice, bob',
     'lists.list4=foo bar baz alice, bob',
+    'interpolation.value1=hallo',
+    'interpolation.value2=%(value1)s world',
+    'interpolation.value3=%(novalue)s',
+    'interpolation.value4=%(bad)1',
+    'interpolation.value5=%bad2',
 ])
 
 print repr(testui.configitems('values'))
 print repr(testui.configitems('lists'))
+try:
+    print repr(testui.configitems('interpolation'))
+except util.Abort, inst:
+    print inst
 print "---"
 print repr(testui.config('values', 'string'))
 print repr(testui.config('values', 'bool1'))
@@ -45,3 +54,18 @@ print repr(testui.configlist('lists', 'u
 print repr(testui.configlist('lists', 'unknown', ['foo bar']))
 print repr(testui.configlist('lists', 'unknown', ['foo', 'bar']))
 print "---"
+print repr(testui.config('interpolation', 'value1'))
+print repr(testui.config('interpolation', 'value2'))
+try:
+    print repr(testui.config('interpolation', 'value3'))
+except util.Abort, inst:
+    print inst
+try:
+    print repr(testui.config('interpolation', 'value4'))
+except util.Abort, inst:
+    print inst
+try:
+    print repr(testui.config('interpolation', 'value5'))
+except util.Abort, inst:
+    print inst
+print "---"
diff --git a/tests/test-ui-config.out b/tests/test-ui-config.out
--- a/tests/test-ui-config.out
+++ b/tests/test-ui-config.out
@@ -1,5 +1,7 @@
 [('bool1', 'true'), ('bool2', 'false'), ('string', 'string value')]
 [('list1', 'foo'), ('list2', 'foo bar baz'), ('list3', 'alice, bob'), ('list4', 'foo bar baz alice, bob')]
+Error in configuration section [interpolation]:
+'%' must be followed by '%' or '(', found: '%bad2'
 ---
 'string value'
 'true'
@@ -27,3 +29,17 @@ True
 ['foo bar']
 ['foo', 'bar']
 ---
+'hallo'
+'hallo world'
+Error in configuration section [interpolation] parameter 'value3':
+Bad value substitution:
+	section: [interpolation]
+	option : value3
+	key    : novalue
+	rawval : 
+
+Error in configuration section [interpolation] parameter 'value4':
+bad interpolation variable reference '%(bad)1'
+Error in configuration section [interpolation] parameter 'value5':
+'%' must be followed by '%' or '(', found: '%bad2'
+---