diff --git a/mercurial/windows.py b/mercurial/windows.py
--- a/mercurial/windows.py
+++ b/mercurial/windows.py
@@ -258,7 +258,7 @@ def _removedirs(name):
         head, tail = os.path.split(head)
     while head and tail:
         try:
-            if osutil.listdir(name):
+            if osutil.listdir(head):
                 return
             os.rmdir(head)
         except:
diff --git a/tests/test-remove b/tests/test-remove
--- a/tests/test-remove
+++ b/tests/test-remove
@@ -108,3 +108,12 @@ remove -A test
 echo % dir, options -Af
 rm test/bar
 remove -Af test
+
+echo 'test remove dropping empty trees (issue1861)'
+mkdir -p issue1861/b/c
+echo x > issue1861/x
+echo y > issue1861/b/c/y
+hg ci -Am add
+hg rm issue1861/b
+hg ci -m remove
+ls issue1861
diff --git a/tests/test-remove.out b/tests/test-remove.out
--- a/tests/test-remove.out
+++ b/tests/test-remove.out
@@ -111,3 +111,8 @@ R test/foo
 ./foo
 ./test/foo
 2 files updated, 0 files merged, 0 files removed, 0 files unresolved
+test remove dropping empty trees (issue1861)
+adding issue1861/b/c/y
+adding issue1861/x
+removing issue1861/b/c/y
+x