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
@@ -3,9 +3,10 @@
 This file focuses mainly on updating largefiles in the working
 directory (and ".hg/largefiles/dirstate")
 
+  $ unset HGMERGE
   $ cat >> $HGRCPATH <<EOF
   > [ui]
-  > merge = internal:fail
+  > merge = internal:merge
   > [extensions]
   > largefiles =
   > [extdiff]