diff --git a/hgext/largefiles/reposetup.py b/hgext/largefiles/reposetup.py
--- a/hgext/largefiles/reposetup.py
+++ b/hgext/largefiles/reposetup.py
@@ -137,7 +137,7 @@ def reposetup(ui, repo):
                 # Create a copy of match that matches standins instead
                 # of largefiles.
                 def tostandin(file):
-                    if inctx(lfutil.standin(file), ctx2):
+                    if working and lfutil.standin(file) in repo.dirstate:
                         return lfutil.standin(file)
                     return file
 
diff --git a/tests/test-largefiles.t b/tests/test-largefiles.t
--- a/tests/test-largefiles.t
+++ b/tests/test-largefiles.t
@@ -68,6 +68,8 @@ Commit preserved largefile contents.
 Remove both largefiles and normal files.
  
   $ hg remove normal1 large1
+  $ hg status large1
+  R large1
   $ hg commit -m "remove files"
   Invoking status precommit hook
   R large1