diff --git a/mercurial/merge.py b/mercurial/merge.py
--- a/mercurial/merge.py
+++ b/mercurial/merge.py
@@ -634,6 +634,39 @@ def _checkunknownfiles(repo, wctx, mctx,
         unknownconflicts = conflicts - ignoredconflicts
         collectconflicts(ignoredconflicts, ignoredconfig)
         collectconflicts(unknownconflicts, unknownconfig)
+    else:
+        for f, (m, args, msg) in actions.iteritems():
+            if m == 'cm':
+                fl2, anc = args
+                different = _checkunknownfile(repo, wctx, mctx, f)
+                if repo.dirstate._ignore(f):
+                    config = ignoredconfig
+                else:
+                    config = unknownconfig
+
+                # The behavior when force is True is described by this table:
+                #  config  different  mergeforce  |    action    backup
+                #    *         n          *       |      get        n
+                #    *         y          y       |     merge       -
+                #   abort      y          n       |     merge       -   (1)
+                #   warn       y          n       |  warn + get     y
+                #  ignore      y          n       |      get        y
+                #
+                # (1) this is probably the wrong behavior here -- we should
+                #     probably abort, but some actions like rebases currently
+                #     don't like an abort happening in the middle of
+                #     merge.update.
+                if not different:
+                    actions[f] = ('g', (fl2, False), "remote created")
+                elif mergeforce or config == 'abort':
+                    actions[f] = ('m', (f, f, None, False, anc),
+                                  "remote differs from untracked local")
+                elif config == 'abort':
+                    abortconflicts.add(f)
+                else:
+                    if config == 'warn':
+                        warnconflicts.add(f)
+                    actions[f] = ('g', (fl2, True), "remote created")
 
     for f in sorted(abortconflicts):
         repo.ui.warn(_("%s: untracked file differs\n") % f)
@@ -649,14 +682,6 @@ def _checkunknownfiles(repo, wctx, mctx,
         if m == 'c':
             flags, = args
             actions[f] = ('g', (flags, backup), msg)
-        elif m == 'cm':
-            fl2, anc = args
-            different = _checkunknownfile(repo, wctx, mctx, f)
-            if different:
-                actions[f] = ('m', (f, f, None, False, anc),
-                              "remote differs from untracked local")
-            else:
-                actions[f] = ('g', (fl2, backup), "remote created")
 
 def _forgetremoved(wctx, mctx, branchmerge):
     """
diff --git a/tests/test-rebase-scenario-global.t b/tests/test-rebase-scenario-global.t
--- a/tests/test-rebase-scenario-global.t
+++ b/tests/test-rebase-scenario-global.t
@@ -25,7 +25,8 @@
 
 Rebasing
 D onto H - simple rebase:
-(this also tests that editor is invoked if '--edit' is specified)
+(this also tests that editor is invoked if '--edit' is specified, and that we
+can abort or warn for colliding untracked files)
 
   $ hg clone -q -u . a a1
   $ cd a1
@@ -50,8 +51,10 @@ D onto H - simple rebase:
 
   $ hg status --rev "3^1" --rev 3
   A D
-  $ HGEDITOR=cat hg rebase -s 3 -d 7 --edit
+  $ echo collide > D
+  $ HGEDITOR=cat hg rebase -s 3 -d 7 --edit --config merge.checkunknown=warn
   rebasing 3:32af7686d403 "D"
+  D: replacing untracked file
   D
   
   
@@ -62,6 +65,9 @@ D onto H - simple rebase:
   HG: branch 'default'
   HG: added D
   saved backup bundle to $TESTTMP/a1/.hg/strip-backup/32af7686d403-6f7dface-backup.hg (glob)
+  $ cat D.orig
+  collide
+  $ rm D.orig
 
   $ hg tglog
   o  7: 'D'
@@ -84,14 +90,19 @@ D onto H - simple rebase:
 
 
 D onto F - intermediate point:
-(this also tests that editor is not invoked if '--edit' is not specified)
+(this also tests that editor is not invoked if '--edit' is not specified, and
+that we can ignore for colliding untracked files)
 
   $ hg clone -q -u . a a2
   $ cd a2
+  $ echo collide > D
 
-  $ HGEDITOR=cat hg rebase -s 3 -d 5
+  $ HGEDITOR=cat hg rebase -s 3 -d 5 --config merge.checkunknown=ignore
   rebasing 3:32af7686d403 "D"
   saved backup bundle to $TESTTMP/a2/.hg/strip-backup/32af7686d403-6f7dface-backup.hg (glob)
+  $ cat D.orig
+  collide
+  $ rm D.orig
 
   $ hg tglog
   o  7: 'D'
@@ -114,15 +125,21 @@ D onto F - intermediate point:
 
 
 E onto H - skip of G:
+(this also tests that we can overwrite untracked files and don't create backups
+if they have the same contents)
 
   $ hg clone -q -u . a a3
   $ cd a3
+  $ hg cat -r 4 E | tee E
+  E
 
   $ hg rebase -s 4 -d 7
   rebasing 4:9520eea781bc "E"
   rebasing 6:eea13746799a "G"
   note: rebase of 6:eea13746799a created no changes to commit
   saved backup bundle to $TESTTMP/a3/.hg/strip-backup/9520eea781bc-fcd8edd4-backup.hg (glob)
+  $ f E.orig
+  E.orig: file not found
 
   $ hg tglog
   o  6: 'E'