diff --git a/mercurial/commands.py b/mercurial/commands.py
--- a/mercurial/commands.py
+++ b/mercurial/commands.py
@@ -13,6 +13,7 @@ import hg, util, revlog, bundlerepo, ext
 import difflib, patch, time, help, mdiff, tempfile
 import version, socket
 import archival, changegroup, cmdutil, hgweb.server, sshserver, hbisect
+import merge as merge_
 
 # Commands start here, listed alphabetically
 
@@ -2236,6 +2237,35 @@ def rename(ui, repo, *pats, **opts):
     finally:
         del wlock
 
+def resolve(ui, repo, *pats, **opts):
+    """resolve file merges from a branch merge or update
+
+    This command will attempt to resolve unresolved merges from the
+    last update or merge command. This will use the local file
+    revision preserved at the last update or merge to cleanly retry
+    the file merge attempt. With no file or options specified, this
+    command will attempt to resolve all unresolved files.
+    """
+
+    if len([x for x in opts if opts[x]]) > 1:
+        raise util.Abort(_("too many options specified"))
+
+    ms = merge_.mergestate(repo)
+    mf = util.matcher(repo.root, "", pats, [], [])[1]
+
+    for f in ms:
+        if mf(f):
+            if opts.get("list"):
+                ui.write("%s %s\n" % (ms[f].upper(), f))
+            elif opts.get("mark"):
+                ms.mark(f, "r")
+            elif opts.get("unmark"):
+                ms.mark(f, "u")
+            else:
+                wctx = repo.workingctx()
+                mctx = wctx.parents()[-1]
+                ms.resolve(f, wctx, mctx)
+
 def revert(ui, repo, *pats, **opts):
     """restore individual files or dirs to an earlier state
 
@@ -3196,6 +3226,12 @@ table = {
            _('forcibly copy over an existing managed file')),
          ] + walkopts + dryrunopts,
          _('hg rename [OPTION]... SOURCE... DEST')),
+    "resolve":
+        (resolve,
+         [('l', 'list', None, _('list state of files needing merge')),
+          ('m', 'mark', None, _('mark files as resolved')),
+          ('u', 'unmark', None, _('unmark files as resolved'))],
+          ('hg resolve [OPTION] [FILES...]')),
     "revert":
         (revert,
          [('a', 'all', None, _('revert all changes when no arguments given')),
diff --git a/mercurial/hg.py b/mercurial/hg.py
--- a/mercurial/hg.py
+++ b/mercurial/hg.py
@@ -271,15 +271,7 @@ def update(repo, node):
     stats = _merge.update(repo, node, False, False, None)
     _showstats(repo, stats)
     if stats[3]:
-        repo.ui.status(_("There are unresolved merges with"
-                         " locally modified files.\n"))
-        if stats[1]:
-            repo.ui.status(_("You can finish the partial merge using:\n"))
-        else:
-            repo.ui.status(_("You can redo the full merge using:\n"))
-        # len(pl)==1, otherwise _merge.update() would have raised util.Abort:
-        repo.ui.status(_("  hg update %s\n  hg update %s\n")
-                       % (pl[0].rev(), repo.changectx(node).rev()))
+        repo.ui.status(_("use 'hg resolve' to retry unresolved file merges\n"))
     return stats[3] > 0
 
 def clean(repo, node, show_stats=True):
@@ -294,11 +286,7 @@ def merge(repo, node, force=None, remind
     _showstats(repo, stats)
     if stats[3]:
         pl = repo.parents()
-        repo.ui.status(_("There are unresolved merges,"
-                         " you can redo the full merge using:\n"
-                         "  hg update -C %s\n"
-                         "  hg merge %s\n")
-                       % (pl[0].rev(), pl[1].rev()))
+        repo.ui.status(_("use 'hg resolve' to retry unresolved file merges\n"))
     elif remind:
         repo.ui.status(_("(branch merge, don't forget to commit)\n"))
     return stats[3] > 0
diff --git a/mercurial/merge.py b/mercurial/merge.py
--- a/mercurial/merge.py
+++ b/mercurial/merge.py
@@ -5,7 +5,7 @@
 # This software may be used and distributed according to the terms
 # of the GNU General Public License, incorporated herein by reference.
 
-from node import nullid, nullrev, hex
+from node import nullid, nullrev, hex, bin
 from i18n import _
 import errno, util, os, filemerge, copies, shutil
 
@@ -13,27 +13,49 @@ class mergestate(object):
     '''track 3-way merge state of individual files'''
     def __init__(self, repo):
         self._repo = repo
+        self._read()
+    def reset(self, node):
         self._state = {}
-        self._data = {}
-    def reset(self, node):
         self._local = node
         shutil.rmtree(self._repo.join("merge"), True)
+    def _read(self):
+        self._state = {}
+        try:
+            f = self._repo.opener("merge/state")
+            self._local = bin(f.readline()[:-1])
+            for l in f:
+                bits = l[:-1].split("\0")
+                self._state[bits[0]] = bits[1:]
+        except IOError, err:
+            if err.errno != errno.ENOENT:
+                raise
+    def _write(self):
+        f = self._repo.opener("merge/state", "w")
+        f.write(hex(self._local) + "\n")
+        for d, v in self._state.items():
+            f.write("\0".join([d] + v) + "\n")
     def add(self, fcl, fco, fca, fd, flags):
         hash = util.sha1(fcl.path()).hexdigest()
         self._repo.opener("merge/" + hash, "w").write(fcl.data())
-        self._state[fd] = 'u'
-        self._data[fd] = (hash, fcl.path(), fca.path(), hex(fca.filenode()),
-                          fco.path(), flags)
+        self._state[fd] = ['u', hash, fcl.path(), fca.path(),
+                           hex(fca.filenode()), fco.path(), flags]
+        self._write()
     def __contains__(self, dfile):
         return dfile in self._state
     def __getitem__(self, dfile):
-        return self._state[dfile]
+        return self._state[dfile][0]
+    def __iter__(self):
+        l = self._state.keys()
+        l.sort()
+        for f in l:
+            yield f
     def mark(self, dfile, state):
-        self._state[dfile] = state
+        self._state[dfile][0] = state
+        self._write()
     def resolve(self, dfile, wctx, octx):
         if self[dfile] == 'r':
             return 0
-        hash, lfile, afile, anode, ofile, flags = self._data[dfile]
+        state, hash, lfile, afile, anode, ofile, flags = self._state[dfile]
         f = self._repo.opener("merge/" + hash)
         self._repo.wwrite(dfile, f.read(), flags)
         fcd = wctx[dfile]
@@ -41,7 +63,6 @@ class mergestate(object):
         fca = self._repo.filectx(afile, fileid=anode)
         r = filemerge.filemerge(self._repo, self._local, lfile, fcd, fco, fca)
         if not r:
-            util.set_flags(self._repo.wjoin(dfile), flags)
             self.mark(dfile, 'r')
         return r
 
diff --git a/tests/test-add.out b/tests/test-add.out
--- a/tests/test-add.out
+++ b/tests/test-add.out
@@ -18,9 +18,7 @@ merging a
 warning: conflicts during merge.
 merging a failed!
 0 files updated, 0 files merged, 0 files removed, 1 files unresolved
-There are unresolved merges, you can redo the full merge using:
-  hg update -C 2
-  hg merge 1
+use 'hg resolve' to retry unresolved file merges
 M a
 ? a.orig
 % should fail
diff --git a/tests/test-conflict.out b/tests/test-conflict.out
--- a/tests/test-conflict.out
+++ b/tests/test-conflict.out
@@ -4,9 +4,7 @@ merging a
 warning: conflicts during merge.
 merging a failed!
 0 files updated, 0 files merged, 0 files removed, 1 files unresolved
-There are unresolved merges, you can redo the full merge using:
-  hg update -C 2
-  hg merge 1
+use 'hg resolve' to retry unresolved file merges
 e7fe8eb3e180+0d24b7662d3e+ tip
 <<<<<<< local
 something else
diff --git a/tests/test-convert-svn-sink.out b/tests/test-convert-svn-sink.out
--- a/tests/test-convert-svn-sink.out
+++ b/tests/test-convert-svn-sink.out
@@ -265,9 +265,7 @@ merging b
 warning: conflicts during merge.
 merging b failed!
 2 files updated, 0 files merged, 0 files removed, 1 files unresolved
-There are unresolved merges, you can redo the full merge using:
-  hg update -C 2
-  hg merge 4
+use 'hg resolve' to retry unresolved file merges
 assuming destination b-hg
 initializing svn repo 'b-hg'
 initializing svn wc 'b-hg-wc'
diff --git a/tests/test-debugcomplete.out b/tests/test-debugcomplete.out
--- a/tests/test-debugcomplete.out
+++ b/tests/test-debugcomplete.out
@@ -33,6 +33,7 @@ push
 recover
 remove
 rename
+resolve
 revert
 rollback
 root
@@ -79,6 +80,7 @@ debugwalk
 recover
 remove
 rename
+resolve
 revert
 rollback
 root
diff --git a/tests/test-globalopts.out b/tests/test-globalopts.out
--- a/tests/test-globalopts.out
+++ b/tests/test-globalopts.out
@@ -183,6 +183,7 @@ list of commands:
  recover      roll back an interrupted transaction
  remove       remove the specified files on the next commit
  rename       rename files; equivalent of copy + remove
+ resolve      resolve file merges from a branch merge or update
  revert       restore individual files or dirs to an earlier state
  rollback     roll back the last transaction
  root         print the root (top) of the current working dir
@@ -236,6 +237,7 @@ list of commands:
  recover      roll back an interrupted transaction
  remove       remove the specified files on the next commit
  rename       rename files; equivalent of copy + remove
+ resolve      resolve file merges from a branch merge or update
  revert       restore individual files or dirs to an earlier state
  rollback     roll back the last transaction
  root         print the root (top) of the current working dir
diff --git a/tests/test-help.out b/tests/test-help.out
--- a/tests/test-help.out
+++ b/tests/test-help.out
@@ -74,6 +74,7 @@ list of commands:
  recover      roll back an interrupted transaction
  remove       remove the specified files on the next commit
  rename       rename files; equivalent of copy + remove
+ resolve      resolve file merges from a branch merge or update
  revert       restore individual files or dirs to an earlier state
  rollback     roll back the last transaction
  root         print the root (top) of the current working dir
@@ -123,6 +124,7 @@ use "hg -v help" to show aliases and glo
  recover      roll back an interrupted transaction
  remove       remove the specified files on the next commit
  rename       rename files; equivalent of copy + remove
+ resolve      resolve file merges from a branch merge or update
  revert       restore individual files or dirs to an earlier state
  rollback     roll back the last transaction
  root         print the root (top) of the current working dir
diff --git a/tests/test-merge-local.out b/tests/test-merge-local.out
--- a/tests/test-merge-local.out
+++ b/tests/test-merge-local.out
@@ -21,10 +21,7 @@ merging zzz1_merge_ok
 merging zzz2_merge_bad
 merging zzz2_merge_bad failed!
 3 files updated, 1 files merged, 2 files removed, 1 files unresolved
-There are unresolved merges with locally modified files.
-You can finish the partial merge using:
-  hg update 0
-  hg update 1
+use 'hg resolve' to retry unresolved file merges
 2 files updated, 0 files merged, 3 files removed, 0 files unresolved
 --- a/zzz1_merge_ok
 +++ b/zzz1_merge_ok
@@ -42,10 +39,7 @@ merging zzz2_merge_bad
 warning: conflicts during merge.
 merging zzz2_merge_bad failed!
 3 files updated, 1 files merged, 2 files removed, 1 files unresolved
-There are unresolved merges with locally modified files.
-You can finish the partial merge using:
-  hg update 0
-  hg update 1
+use 'hg resolve' to retry unresolved file merges
 2 files updated, 0 files merged, 3 files removed, 0 files unresolved
 --- a/zzz1_merge_ok
 +++ b/zzz1_merge_ok
diff --git a/tests/test-merge-revert2.out b/tests/test-merge-revert2.out
--- a/tests/test-merge-revert2.out
+++ b/tests/test-merge-revert2.out
@@ -13,10 +13,7 @@ merging file1
 warning: conflicts during merge.
 merging file1 failed!
 0 files updated, 0 files merged, 0 files removed, 1 files unresolved
-There are unresolved merges with locally modified files.
-You can redo the full merge using:
-  hg update 0
-  hg update 1
+use 'hg resolve' to retry unresolved file merges
 diff -r f248da0d4c3e file1
 --- a/file1
 +++ b/file1
diff --git a/tests/test-merge7.out b/tests/test-merge7.out
--- a/tests/test-merge7.out
+++ b/tests/test-merge7.out
@@ -11,9 +11,7 @@ merging test.txt
 warning: conflicts during merge.
 merging test.txt failed!
 0 files updated, 0 files merged, 0 files removed, 1 files unresolved
-There are unresolved merges, you can redo the full merge using:
-  hg update -C 1
-  hg merge 2
+use 'hg resolve' to retry unresolved file merges
 pulling from ../test-a
 searching for changes
 adding changesets
@@ -33,9 +31,7 @@ my test.txt@451c744aabcc+ other test.txt
 warning: conflicts during merge.
 merging test.txt failed!
 0 files updated, 0 files merged, 0 files removed, 1 files unresolved
-There are unresolved merges, you can redo the full merge using:
-  hg update -C 3
-  hg merge 4
+use 'hg resolve' to retry unresolved file merges
 one
 <<<<<<< local
 two-point-five
diff --git a/tests/test-merge9 b/tests/test-merge9
--- a/tests/test-merge9
+++ b/tests/test-merge9
@@ -23,9 +23,31 @@ hg ci -Am 'change foo' -d '0 0'
 
 # test with the rename on the remote side
 HGMERGE=false hg merge
+hg resolve -l
 
 # test with the rename on the local side
 hg up -C 1
 HGMERGE=false hg merge
 
+echo % show unresolved
+hg resolve -l
+
+echo % unmark baz
+hg resolve -u baz
+
+echo % show
+hg resolve -l
+
+echo % re-resolve baz
+hg resolve baz
+
+echo % after
+hg resolve -l
+
+echo % resolve all
+hg resolve
+
+echo % after
+hg resolve -l
+
 true
diff --git a/tests/test-merge9.out b/tests/test-merge9.out
--- a/tests/test-merge9.out
+++ b/tests/test-merge9.out
@@ -7,14 +7,31 @@ merging bar
 merging bar failed!
 merging foo and baz to baz
 1 files updated, 1 files merged, 0 files removed, 1 files unresolved
-There are unresolved merges, you can redo the full merge using:
-  hg update -C 2
-  hg merge 1
+use 'hg resolve' to retry unresolved file merges
+U bar
+R baz
 3 files updated, 0 files merged, 1 files removed, 0 files unresolved
 merging bar
 merging bar failed!
 merging baz and foo to baz
 1 files updated, 1 files merged, 0 files removed, 1 files unresolved
-There are unresolved merges, you can redo the full merge using:
-  hg update -C 1
-  hg merge 2
+use 'hg resolve' to retry unresolved file merges
+% show unresolved
+U bar
+R baz
+% unmark baz
+% show
+U bar
+U baz
+% re-resolve baz
+merging baz and foo to baz
+% after
+U bar
+R baz
+% resolve all
+merging bar
+warning: conflicts during merge.
+merging bar failed!
+% after
+U bar
+R baz