diff --git a/hgext/largefiles/lfutil.py b/hgext/largefiles/lfutil.py
--- a/hgext/largefiles/lfutil.py
+++ b/hgext/largefiles/lfutil.py
@@ -575,11 +575,15 @@ def updatestandinsbymatch(repo, match):
         fstandin = standin(f)
 
         # For largefiles, only one of the normal and standin should be
-        # committed (except if one of them is a remove).
+        # committed (except if one of them is a remove).  In the case of a
+        # standin removal, drop the normal file if it is unknown to dirstate.
         # Thus, skip plain largefile names but keep the standin.
-        if (f in lfiles or fstandin in standins) and \
-            repo.dirstate[f] != 'r' and repo.dirstate[fstandin] != 'r':
-            continue
+        if f in lfiles or fstandin in standins:
+            if repo.dirstate[fstandin] != 'r':
+                if repo.dirstate[f] != 'r':
+                    continue
+            elif repo.dirstate[f] == '?':
+                continue
 
         actualfiles.append(f)
     match._files = actualfiles
diff --git a/tests/test-largefiles-cache.t b/tests/test-largefiles-cache.t
--- a/tests/test-largefiles-cache.t
+++ b/tests/test-largefiles-cache.t
@@ -17,7 +17,7 @@ Create source repo, and commit adding la
   $ hg add --large large
   $ hg commit -m 'add largefile'
   $ hg rm large
-  $ hg commit -m 'branchhead without largefile'
+  $ hg commit -m 'branchhead without largefile' large
   $ hg up -qr 0
   $ cd ..