diff --git a/mercurial/changelog.py b/mercurial/changelog.py
--- a/mercurial/changelog.py
+++ b/mercurial/changelog.py
@@ -295,8 +295,9 @@ class changelog(revlog.revlog):
         revlog.revlog.__init__(self, opener, indexfile, datafile=datafile,
                                checkambig=True, mmaplargeindex=True)
 
-        if self._initempty:
-            # changelogs don't benefit from generaldelta
+        if self._initempty and (self.version & 0xFFFF == revlog.REVLOGV1):
+            # changelogs don't benefit from generaldelta.
+
             self.version &= ~revlog.FLAG_GENERALDELTA
             self._generaldelta = False
 
diff --git a/mercurial/help/internals/revlogs.txt b/mercurial/help/internals/revlogs.txt
--- a/mercurial/help/internals/revlogs.txt
+++ b/mercurial/help/internals/revlogs.txt
@@ -66,8 +66,6 @@ Version 2 revlogs have the following fla
 
 0
    Store revision data inline.
-1
-   Generaldelta encoding.
 
 The following header values are common:
 
@@ -159,8 +157,10 @@ Version 2 Format
 
 (In development. Format not finalized or stable.)
 
-Version 2 is currently identical to version 1. This will obviously
-change.
+Version 2 is identical to version 2 with the following differences.
+
+There is no dedicated *generaldelta* revlog format flag. Instead,
+the feature is implied enabled by default.
 
 Delta Chains
 ============
diff --git a/mercurial/localrepo.py b/mercurial/localrepo.py
--- a/mercurial/localrepo.py
+++ b/mercurial/localrepo.py
@@ -363,7 +363,7 @@ class locallegacypeer(localpeer):
 
 # Increment the sub-version when the revlog v2 format changes to lock out old
 # clients.
-REVLOGV2_REQUIREMENT = 'exp-revlogv2.0'
+REVLOGV2_REQUIREMENT = 'exp-revlogv2.1'
 
 # A repository with the sparserevlog feature will have delta chains that
 # can spread over a larger span. Sparse reading cuts these large spans into
diff --git a/mercurial/revlog.py b/mercurial/revlog.py
--- a/mercurial/revlog.py
+++ b/mercurial/revlog.py
@@ -387,8 +387,7 @@ class revlog(object):
         opts = getattr(opener, 'options', {}) or {}
 
         if 'revlogv2' in opts:
-            # version 2 revlogs always use generaldelta.
-            versionflags = REVLOGV2 | FLAG_GENERALDELTA | FLAG_INLINE_DATA
+            versionflags = REVLOGV2 | FLAG_INLINE_DATA
         elif 'revlogv1' in opts:
             versionflags = REVLOGV1 | FLAG_INLINE_DATA
             if 'generaldelta' in opts:
@@ -451,25 +450,38 @@ class revlog(object):
                 raise
 
         self.version = versionflags
-        self._inline = versionflags & FLAG_INLINE_DATA
-        self._generaldelta = versionflags & FLAG_GENERALDELTA
+
         flags = versionflags & ~0xFFFF
         fmt = versionflags & 0xFFFF
+
         if fmt == REVLOGV0:
             if flags:
                 raise error.RevlogError(_('unknown flags (%#04x) in version %d '
                                           'revlog %s') %
                                         (flags >> 16, fmt, self.indexfile))
+
+            self._inline = False
+            self._generaldelta = False
+
         elif fmt == REVLOGV1:
             if flags & ~REVLOGV1_FLAGS:
                 raise error.RevlogError(_('unknown flags (%#04x) in version %d '
                                           'revlog %s') %
                                         (flags >> 16, fmt, self.indexfile))
+
+            self._inline = versionflags & FLAG_INLINE_DATA
+            self._generaldelta = versionflags & FLAG_GENERALDELTA
+
         elif fmt == REVLOGV2:
             if flags & ~REVLOGV2_FLAGS:
                 raise error.RevlogError(_('unknown flags (%#04x) in version %d '
                                           'revlog %s') %
                                         (flags >> 16, fmt, self.indexfile))
+
+            self._inline = versionflags & FLAG_INLINE_DATA
+            # generaldelta implied by version 2 revlogs.
+            self._generaldelta = True
+
         else:
             raise error.RevlogError(_('unknown version (%d) in revlog %s') %
                                     (fmt, self.indexfile))
diff --git a/mercurial/revlogutils/constants.py b/mercurial/revlogutils/constants.py
--- a/mercurial/revlogutils/constants.py
+++ b/mercurial/revlogutils/constants.py
@@ -20,13 +20,15 @@ REVLOGV1 = 1
 # Dummy value until file format is finalized.
 # Reminder: change the bounds check in revlog.__init__ when this is changed.
 REVLOGV2 = 0xDEAD
+# Shared across v1 and v2.
 FLAG_INLINE_DATA = (1 << 16)
+# Only used by v1, implied by v2.
 FLAG_GENERALDELTA = (1 << 17)
 REVLOG_DEFAULT_FLAGS = FLAG_INLINE_DATA
 REVLOG_DEFAULT_FORMAT = REVLOGV1
 REVLOG_DEFAULT_VERSION = REVLOG_DEFAULT_FORMAT | REVLOG_DEFAULT_FLAGS
 REVLOGV1_FLAGS = FLAG_INLINE_DATA | FLAG_GENERALDELTA
-REVLOGV2_FLAGS = REVLOGV1_FLAGS
+REVLOGV2_FLAGS = FLAG_INLINE_DATA
 
 # revlog index flags
 
diff --git a/tests/test-revlog-v2.t b/tests/test-revlog-v2.t
--- a/tests/test-revlog-v2.t
+++ b/tests/test-revlog-v2.t
@@ -22,7 +22,7 @@ Can create and open repo with revlog v2 
   $ cd empty-repo
   $ cat .hg/requires
   dotencode
-  exp-revlogv2.0
+  exp-revlogv2.1
   fncache
   sparserevlog
   store
@@ -54,7 +54,7 @@ Writing a simple revlog v2 works
   date:        Thu Jan 01 00:00:00 1970 +0000
   summary:     initial
   
-Header written as expected (changelog always disables generaldelta)
+Header written as expected
 
   $ f --hexdump --bytes 4 .hg/store/00changelog.i
   .hg/store/00changelog.i:
@@ -62,4 +62,4 @@ Header written as expected (changelog al
 
   $ f --hexdump --bytes 4 .hg/store/data/foo.i
   .hg/store/data/foo.i:
-  0000: 00 03 de ad                                     |....|
+  0000: 00 01 de ad                                     |....|