diff --git a/mercurial/demandimport.py b/mercurial/demandimport.py
--- a/mercurial/demandimport.py
+++ b/mercurial/demandimport.py
@@ -191,11 +191,16 @@ def _demandimport(name, globals=None, lo
         def processfromitem(mod, attr):
             """Process an imported symbol in the import statement.
 
-            If the symbol doesn't exist in the parent module, it must be a
-            module. We set missing modules up as _demandmod instances.
+            If the symbol doesn't exist in the parent module, and if the
+            parent module is a package, it must be a module. We set missing
+            modules up as _demandmod instances.
             """
             symbol = getattr(mod, attr, nothing)
+            nonpkg = getattr(mod, '__path__', nothing) is nothing
             if symbol is nothing:
+                if nonpkg:
+                    # do not try relative import, which would raise ValueError
+                    raise ImportError('cannot import name %s' % attr)
                 mn = '%s.%s' % (mod.__name__, attr)
                 if mn in ignore:
                     importfunc = _origimport
diff --git a/tests/test-demandimport.py b/tests/test-demandimport.py
--- a/tests/test-demandimport.py
+++ b/tests/test-demandimport.py
@@ -63,6 +63,15 @@ print("re =", f(re))
 print("re.stderr =", f(re.stderr))
 print("re =", f(re))
 
+import contextlib
+print("contextlib =", f(contextlib))
+try:
+    from contextlib import unknownattr
+    print('no demandmod should be created for attribute of non-package '
+          'module:\ncontextlib.unknownattr =', f(unknownattr))
+except ImportError as inst:
+    print('contextlib.unknownattr = ImportError: %s' % inst)
+
 demandimport.disable()
 os.environ['HGDEMANDIMPORT'] = 'disable'
 # this enable call should not actually enable demandimport!
diff --git a/tests/test-demandimport.py.out b/tests/test-demandimport.py.out
--- a/tests/test-demandimport.py.out
+++ b/tests/test-demandimport.py.out
@@ -16,4 +16,6 @@ fred = <proxied module 're'>
 re = <unloaded module 'sys'>
 re.stderr = <open file '<whatever>', mode 'w' at 0x?>
 re = <proxied module 'sys'>
+contextlib = <unloaded module 'contextlib'>
+contextlib.unknownattr = ImportError: cannot import name unknownattr
 node = <module 'mercurial.node' from '?'>