diff --git a/mercurial/hg.py b/mercurial/hg.py
--- a/mercurial/hg.py
+++ b/mercurial/hg.py
@@ -404,7 +404,7 @@ def clone(ui, peeropts, source, dest=Non
     shareopts = shareopts or {}
     sharepool = shareopts.get('pool')
     sharenamemode = shareopts.get('mode')
-    if sharepool:
+    if sharepool and islocal(dest):
         sharepath = None
         if sharenamemode == 'identity':
             # Resolve the name from the initial changeset in the remote
diff --git a/tests/test-clone.t b/tests/test-clone.t
--- a/tests/test-clone.t
+++ b/tests/test-clone.t
@@ -1013,3 +1013,15 @@ Request to clone a single branch is resp
   adding remote bookmark bookA
 
   $ ls share-1anowc
+
+Test that auto sharing doesn't cause failure of "hg clone local remote"
+
+  $ cd $TESTTMP
+  $ hg -R a id -r 0
+  acb14030fe0a
+  $ hg id -R remote -r 0
+  abort: there is no Mercurial repository here (.hg not found)
+  [255]
+  $ hg --config share.pool=share -q clone -e "python \"$TESTDIR/dummyssh\"" a ssh://user@dummy/remote
+  $ hg -R remote id -r 0
+  acb14030fe0a