diff --git a/mercurial/hg.py b/mercurial/hg.py
--- a/mercurial/hg.py
+++ b/mercurial/hg.py
@@ -19,34 +19,45 @@ def _local(path):
     return (os.path.isfile(path) and bundlerepo or localrepo)
 
 def addbranchrevs(lrepo, repo, branches, revs):
-    if not branches:
+    hashbranch, branches = branches
+    if not hashbranch and not branches:
         return revs or None, revs and revs[0] or None
     revs = revs and list(revs) or []
     if not repo.capable('branchmap'):
-        revs.extend(branches)
+        if branches:
+            raise util.Abort(_("remote branch lookup not supported"))
+        revs.append(hashbranch)
         return revs, revs[0]
     branchmap = repo.branchmap()
-    for branch in branches:
-        if branch == '.':
+
+    def primary(butf8):
+        if butf8 == '.':
             if not lrepo or not lrepo.local():
                 raise util.Abort(_("dirstate branch not accessible"))
             butf8 = lrepo.dirstate.branch()
-            branch = encoding.tolocal(butf8)
-        else:
-            butf8 = encoding.fromlocal(branch)
         if butf8 in branchmap:
             revs.extend(node.hex(r) for r in reversed(branchmap[butf8]))
+            return True
         else:
-            revs.append(branch)
+            return False
+
+    for branch in branches:
+        butf8 = encoding.fromlocal(branch)
+        if not primary(butf8):
+            raise error.RepoLookupError(_("unknown branch '%s'") % branch)
+    if hashbranch:
+        butf8 = encoding.fromlocal(hashbranch)
+        if not primary(butf8):
+            revs.append(hashbranch)
     return revs, revs[0]
 
 def parseurl(url, branches=None):
-    '''parse url#branch, returning url, branches+[branch]'''
+    '''parse url#branch, returning (url, (branch, branches))'''
 
     if '#' not in url:
-        return url, branches or []
+        return url, (None, branches or [])
     url, branch = url.split('#', 1)
-    return url, (branches or []) + [branch]
+    return url, (branch, branches or [])
 
 schemes = {
     'bundle': bundlerepo,
diff --git a/tests/test-branch-option b/tests/test-branch-option
--- a/tests/test-branch-option
+++ b/tests/test-branch-option
@@ -12,6 +12,7 @@ hg up 0
 hg branch c
 echo c > foo
 hg ci -d '0 0' -mc
+hg tag -l z
 cd ..
 hg clone -r 0 branch branch2
 cd branch2
@@ -32,6 +33,10 @@ hg branch -f b
 echo b2 > foo
 hg ci -d '0 0' -mb2
 
+echo unknown branch and fallback
+hg in -qbz
+hg in -q ../branch#z
+hg out -qbz
 echo in rev c branch a
 hg in -qr c ../branch#a
 hg in -qr c -b a
diff --git a/tests/test-branch-option.out b/tests/test-branch-option.out
--- a/tests/test-branch-option.out
+++ b/tests/test-branch-option.out
@@ -15,9 +15,14 @@ 1 files updated, 0 files merged, 0 files
 marked working directory as branch æ
 1 files updated, 0 files merged, 0 files removed, 0 files unresolved
 marked working directory as branch æ
+created new head
 1 files updated, 0 files merged, 0 files removed, 0 files unresolved
 marked working directory as branch b
 created new head
+unknown branch and fallback
+abort: unknown branch 'z'!
+2:f25d57ab0566
+abort: unknown branch 'z'!
 in rev c branch a
 1:dd6e60a716c6
 2:f25d57ab0566
diff --git a/tests/test-hg-parseurl.py.out b/tests/test-hg-parseurl.py.out
--- a/tests/test-hg-parseurl.py.out
+++ b/tests/test-hg-parseurl.py.out
@@ -1,5 +1,5 @@
-http://example.com/no/anchor, branches: []
-http://example.com/an/anchor, branches: ['foo']
-http://example.com/no/anchor/branches, branches: ['foo']
-http://example.com/an/anchor/branches, branches: ['foo', 'bar']
-http://example.com/an/anchor/branches-None, branches: ['foo']
+http://example.com/no/anchor, branches: (None, [])
+http://example.com/an/anchor, branches: ('foo', [])
+http://example.com/no/anchor/branches, branches: (None, ['foo'])
+http://example.com/an/anchor/branches, branches: ('bar', ['foo'])
+http://example.com/an/anchor/branches-None, branches: ('foo', [])