diff --git a/mercurial/bundle2.py b/mercurial/bundle2.py
--- a/mercurial/bundle2.py
+++ b/mercurial/bundle2.py
@@ -280,9 +280,6 @@ def processbundle(repo, unbundler, trans
     """
     op = bundleoperation(repo, transactiongetter)
     # todo:
-    # - only create reply bundle if requested.
-    op.reply = bundle20(op.ui)
-    # todo:
     # - replace this is a init function soon.
     # - exception catching
     unbundler.params
@@ -674,3 +671,11 @@ def handlechangegroup(op, inpart):
     assert not h
     if heads != op.repo.heads():
         raise exchange.PushRaced()
+
+@parthandler('replycaps')
+def handlereplycaps(op, inpart):
+    """Notify that a reply bundle should be created
+
+    Will convey bundle capability at some point too."""
+    if op.reply is None:
+        op.reply = bundle20(op.ui)
diff --git a/mercurial/exchange.py b/mercurial/exchange.py
--- a/mercurial/exchange.py
+++ b/mercurial/exchange.py
@@ -208,6 +208,7 @@ def _pushbundle2(pushop):
     evolve in the future."""
     # Send known head to the server for race detection.
     bundler = bundle2.bundle20(pushop.ui)
+    bundler.addpart(bundle2.bundlepart('replycaps'))
     if not pushop.force:
         part = bundle2.bundlepart('CHECK:HEADS', data=iter(pushop.remoteheads))
         bundler.addpart(part)
diff --git a/tests/test-bundle2.t b/tests/test-bundle2.t
--- a/tests/test-bundle2.t
+++ b/tests/test-bundle2.t
@@ -45,6 +45,7 @@ Create an extension to test bundle2 API
   >          [('', 'param', [], 'stream level parameter'),
   >           ('', 'unknown', False, 'include an unknown mandatory part in the bundle'),
   >           ('', 'parts', False, 'include some arbitrary parts to the bundle'),
+  >           ('', 'reply', False, 'produce a reply bundle'),
   >           ('r', 'rev', [], 'includes those changeset in the bundle'),],
   >          '[OUTPUTFILE]')
   > def cmdbundle2(ui, repo, path=None, **opts):
@@ -57,6 +58,9 @@ Create an extension to test bundle2 API
   >         except ValueError, exc:
   >             raise util.Abort('%s' % exc)
   > 
+  >     if opts['reply']:
+  >         bundler.addpart(bundle2.bundlepart('replycaps'))
+  > 
   >     revs = opts['rev']
   >     if 'rev' in opts:
   >         revs = scmutil.revrange(repo, opts['rev'])
@@ -493,19 +497,20 @@ Unbundle with an unknown mandatory part
 
 unbundle with a reply
 
-  $ hg unbundle2 ../reply.hg2 < ../parts.hg2
+  $ hg bundle2 --parts --reply ../parts-reply.hg2
+  $ hg unbundle2 ../reply.hg2 < ../parts-reply.hg2
   The choir starts singing:
       Patali Dirapata, Cromda Cromda Ripalo, Pata Pata, Ko Ko Ko
       Bokoro Dipoulito, Rondi Rondi Pepino, Pata Pata, Ko Ko Ko
       Emana Karassoli, Loucra Loucra Ponponto, Pata Pata, Ko Ko Ko.
-  received ping request (id 4)
+  received ping request (id 5)
   0 unread bytes
   3 total verses sung
 
 The reply is a bundle
 
   $ cat ../reply.hg2
-  HG20\x00\x00\x00\x1e	test:pong\x00\x00\x00\x00\x01\x00\x0b\x01in-reply-to4\x00\x00\x00\x00\x00\x00 (no-eol) (esc)
+  HG20\x00\x00\x00\x1e	test:pong\x00\x00\x00\x00\x01\x00\x0b\x01in-reply-to5\x00\x00\x00\x00\x00\x00 (no-eol) (esc)
 
 The reply is valid
 
@@ -629,7 +634,7 @@ Support for changegroup
   \x87\xcd\xc9n\x8e\xaa\xb6\x00\x00\x00\x00\x00\x00\x00\x00\x00\x00\x00\x02H (esc)
   \x00\x00\x00\x00\x00\x00\x00\x00\x00\x00\x00\x00\x00\x00 (no-eol) (esc)
 
-  $ hg unbundle2 ../rev-replay.hg2 < ../rev.hg2
+  $ hg unbundle2 < ../rev.hg2
   adding changesets
   adding manifests
   adding file changes
@@ -637,8 +642,19 @@ Support for changegroup
   0 unread bytes
   addchangegroup return: 1
 
-  $ cat ../rev-replay.hg2
-  HG20\x00\x00\x00/\x11reply:changegroup\x00\x00\x00\x00\x00\x02\x0b\x01\x06\x01in-reply-to0return1\x00\x00\x00\x00\x00\x00 (no-eol) (esc)
+with reply
+
+  $ hg bundle2 --rev '8+7+5+4' --reply ../rev-rr.hg2
+  $ hg unbundle2 ../rev-reply.hg2 < ../rev-rr.hg2
+  adding changesets
+  adding manifests
+  adding file changes
+  added 0 changesets with 0 changes to 3 files
+  0 unread bytes
+  addchangegroup return: 1
+
+  $ cat ../rev-reply.hg2
+  HG20\x00\x00\x00/\x11reply:changegroup\x00\x00\x00\x00\x00\x02\x0b\x01\x06\x01in-reply-to1return1\x00\x00\x00\x00\x00\x00 (no-eol) (esc)
 
 Real world exchange
 =====================