diff --git a/mercurial/subrepo.py b/mercurial/subrepo.py
--- a/mercurial/subrepo.py
+++ b/mercurial/subrepo.py
@@ -202,9 +202,24 @@ def submerge(repo, wctx, mctx, actx, ove
                 wctx.sub(s).get(r, overwrite)
                 sm[s] = r
             else:
-                debug(s, "both sides changed, merge with", r)
-                wctx.sub(s).merge(r)
-                sm[s] = l
+                debug(s, "both sides changed")
+                option = repo.ui.promptchoice(
+                    _(' subrepository %s diverged (local revision: %s, '
+                      'remote revision: %s)\n'
+                      '(M)erge, keep (l)ocal or keep (r)emote?'
+                      '$$ &Merge $$ &Local $$ &Remote')
+                    % (s, l[1][:12], r[1][:12]), 0)
+                if option == 0:
+                    wctx.sub(s).merge(r)
+                    sm[s] = l
+                    debug(s, "merge with", r)
+                elif option == 1:
+                    sm[s] = l
+                    debug(s, "keep local subrepo revision", l)
+                else:
+                    wctx.sub(s).get(r, overwrite)
+                    sm[s] = r
+                    debug(s, "get remote subrepo revision", r)
         elif ld == a: # remote removed, local unchanged
             debug(s, "remote removed, remove")
             wctx.sub(s).remove()
diff --git a/tests/test-mq-subrepo.t b/tests/test-mq-subrepo.t
--- a/tests/test-mq-subrepo.t
+++ b/tests/test-mq-subrepo.t
@@ -263,6 +263,8 @@ qpush
   adding sub/a
   $ hg qpush
   applying 1.diff
+   subrepository sub diverged (local revision: b2fdb12cd82b, remote revision: aa037b301eba)
+  (M)erge, keep (l)ocal or keep (r)emote? m
   1 files updated, 0 files merged, 0 files removed, 0 files unresolved
   now at: 1.diff
   $ hg status -AS
diff --git a/tests/test-subrepo-git.t b/tests/test-subrepo-git.t
--- a/tests/test-subrepo-git.t
+++ b/tests/test-subrepo-git.t
@@ -155,6 +155,8 @@ user a pulls, merges, commits
   added 1 changesets with 1 changes to 1 files (+1 heads)
   (run 'hg heads' to see heads, 'hg merge' to merge)
   $ hg merge 2>/dev/null
+   subrepository s diverged (local revision: 796959400868, remote revision: aa84837ccfbd)
+  (M)erge, keep (l)ocal or keep (r)emote? m
   pulling subrepo s from $TESTTMP/gitroot
   0 files updated, 0 files merged, 0 files removed, 0 files unresolved
   (branch merge, don't forget to commit)
@@ -462,6 +464,8 @@ Sticky subrepositorys, file changes
   da5f5b1d8ffcf62fb8327bcd3c89a4367a6018e7
   $ cd ..
   $ hg update 4
+   subrepository s diverged (local revision: da5f5b1d8ffc, remote revision: aa84837ccfbd)
+  (M)erge, keep (l)ocal or keep (r)emote? m
    subrepository sources for s differ
   use (l)ocal source (da5f5b1) or (r)emote source (aa84837)?
    l
@@ -487,6 +491,8 @@ Sticky subrepository, revision updates
   HEAD is now at aa84837... f
   $ cd ..
   $ hg update 1
+   subrepository s diverged (local revision: 32a343883b74, remote revision: da5f5b1d8ffc)
+  (M)erge, keep (l)ocal or keep (r)emote? m
    subrepository sources for s differ (in checked out version)
   use (l)ocal source (32a3438) or (r)emote source (da5f5b1)?
    l
@@ -508,6 +514,8 @@ Sticky subrepository, file changes and r
   $ hg id -n
   1+
   $ hg update 7
+   subrepository s diverged (local revision: 32a343883b74, remote revision: 32a343883b74)
+  (M)erge, keep (l)ocal or keep (r)emote? m
    subrepository sources for s differ
   use (l)ocal source (32a3438) or (r)emote source (32a3438)?
    l
diff --git a/tests/test-subrepo-svn.t b/tests/test-subrepo-svn.t
--- a/tests/test-subrepo-svn.t
+++ b/tests/test-subrepo-svn.t
@@ -319,6 +319,8 @@ Sticky subrepositorys, file changes
   2M
   $ cd ..
   $ hg update tip
+   subrepository s diverged (local revision: 2, remote revision: 3)
+  (M)erge, keep (l)ocal or keep (r)emote? m
    subrepository sources for s differ
   use (l)ocal source (2) or (r)emote source (3)?
    l
@@ -349,6 +351,8 @@ Sticky subrepository, revision updates
   $ svn update -qr 1
   $ cd ..
   $ hg update 1
+   subrepository s diverged (local revision: 3, remote revision: 2)
+  (M)erge, keep (l)ocal or keep (r)emote? m
    subrepository sources for s differ (in checked out version)
   use (l)ocal source (1) or (r)emote source (2)?
    l
@@ -371,6 +375,8 @@ Sticky subrepository, file changes and r
   $ hg id -n
   1+
   $ hg update tip
+   subrepository s diverged (local revision: 3, remote revision: 3)
+  (M)erge, keep (l)ocal or keep (r)emote? m
    subrepository sources for s differ
   use (l)ocal source (1) or (r)emote source (3)?
    l
@@ -404,6 +410,8 @@ Test subrepo already at intended revisio
   $ svn update -qr 2
   $ cd ..
   $ hg update 1
+   subrepository s diverged (local revision: 3, remote revision: 2)
+  (M)erge, keep (l)ocal or keep (r)emote? m
   1 files updated, 0 files merged, 0 files removed, 0 files unresolved
   $ hg id -n
   1+
diff --git a/tests/test-subrepo.t b/tests/test-subrepo.t
--- a/tests/test-subrepo.t
+++ b/tests/test-subrepo.t
@@ -236,7 +236,9 @@ merge tests
    .hgsubstate: versions differ -> m
   updating: .hgsubstate 1/1 files (100.00%)
   subrepo merge e45c8b14af55+ f94576341bcf 1831e14459c4
-    subrepo t: both sides changed, merge with t:7af322bc1198a32402fe903e0b7ebcfc5c9bf8f4:hg
+    subrepo t: both sides changed 
+   subrepository t diverged (local revision: 20a0db6fbf6c, remote revision: 7af322bc1198)
+  (M)erge, keep (l)ocal or keep (r)emote? m
   merging subrepo t
     searching for copies back to rev 2
   resolving manifests
@@ -252,6 +254,7 @@ merge tests
   merging t incomplete! (edit conflicts, then use 'hg resolve --mark')
   0 files updated, 0 files merged, 0 files removed, 1 files unresolved
   use 'hg resolve' to retry unresolved file merges or 'hg update -C .' to abandon
+    subrepo t: merge with t:7af322bc1198a32402fe903e0b7ebcfc5c9bf8f4:hg
   0 files updated, 0 files merged, 0 files removed, 0 files unresolved
   (branch merge, don't forget to commit)
 
@@ -620,6 +623,8 @@ shouldn't need merging
   $ hg up 5
   0 files updated, 0 files merged, 0 files removed, 0 files unresolved
   $ hg merge 4    # try to merge default into br again
+   subrepository s diverged (local revision: f8f13b33206e, remote revision: a3f9062a4f88)
+  (M)erge, keep (l)ocal or keep (r)emote? m
   1 files updated, 0 files merged, 0 files removed, 0 files unresolved
   (branch merge, don't forget to commit)
   $ cd ..
@@ -922,9 +927,13 @@ Sticky subrepositorys, file changes
   $ hg -R t id
   e95bcfa18a35+
   $ hg update tip
+   subrepository s diverged (local revision: fc627a69481f, remote revision: 12a213df6fa9)
+  (M)erge, keep (l)ocal or keep (r)emote? m
    subrepository sources for s differ
   use (l)ocal source (fc627a69481f) or (r)emote source (12a213df6fa9)?
    l
+   subrepository t diverged (local revision: e95bcfa18a35, remote revision: 52c0adc0515a)
+  (M)erge, keep (l)ocal or keep (r)emote? m
    subrepository sources for t differ
   use (l)ocal source (e95bcfa18a35) or (r)emote source (52c0adc0515a)?
    l
@@ -953,6 +962,10 @@ Sticky subrepository, revision updates
   1 files updated, 0 files merged, 0 files removed, 0 files unresolved
   $ cd ..
   $ hg update 10
+   subrepository s diverged (local revision: 12a213df6fa9, remote revision: fc627a69481f)
+  (M)erge, keep (l)ocal or keep (r)emote? m
+   subrepository t diverged (local revision: 52c0adc0515a, remote revision: 20a0db6fbf6c)
+  (M)erge, keep (l)ocal or keep (r)emote? m
    subrepository sources for t differ (in checked out version)
   use (l)ocal source (7af322bc1198) or (r)emote source (20a0db6fbf6c)?
    l
@@ -976,9 +989,13 @@ Sticky subrepository, file changes and r
   $ hg -R t id
   7af322bc1198+
   $ hg update tip
+   subrepository s diverged (local revision: 12a213df6fa9, remote revision: 12a213df6fa9)
+  (M)erge, keep (l)ocal or keep (r)emote? m
    subrepository sources for s differ
   use (l)ocal source (02dcf1d70411) or (r)emote source (12a213df6fa9)?
    l
+   subrepository t diverged (local revision: 52c0adc0515a, remote revision: 52c0adc0515a)
+  (M)erge, keep (l)ocal or keep (r)emote? m
    subrepository sources for t differ
   use (l)ocal source (7af322bc1198) or (r)emote source (52c0adc0515a)?
    l
@@ -1006,6 +1023,8 @@ Test subrepo already at intended revisio
   1 files updated, 0 files merged, 0 files removed, 0 files unresolved
   $ cd ..
   $ hg update 11
+   subrepository s diverged (local revision: 12a213df6fa9, remote revision: fc627a69481f)
+  (M)erge, keep (l)ocal or keep (r)emote? m
   0 files updated, 0 files merged, 0 files removed, 0 files unresolved
   0 files updated, 0 files merged, 0 files removed, 0 files unresolved
   $ hg id -n