diff --git a/mercurial/cmdutil.py b/mercurial/cmdutil.py
--- a/mercurial/cmdutil.py
+++ b/mercurial/cmdutil.py
@@ -2240,6 +2240,12 @@ def forget(ui, repo, match, prefix, expl
             if f not in repo.dirstate and not repo.wvfs.isdir(f):
                 if f not in forgot:
                     if repo.wvfs.exists(f):
+                        # Don't complain if the exact case match wasn't given.
+                        # But don't do this until after checking 'forgot', so
+                        # that subrepo files aren't normalized, and this op is
+                        # purely from data cached by the status walk above.
+                        if repo.dirstate.normalize(f) in repo.dirstate:
+                            continue
                         ui.warn(_('not removing %s: '
                                   'file is already untracked\n')
                                 % match.rel(f))
diff --git a/tests/test-add.t b/tests/test-add.t
--- a/tests/test-add.t
+++ b/tests/test-add.t
@@ -179,6 +179,9 @@ Test that adding a directory doesn't req
   $ hg add -v capsdir1/capsdir
   adding CapsDir1/CapsDir/AbC.txt (glob)
   adding CapsDir1/CapsDir/SubDir/Def.txt (glob)
+
+  $ hg forget capsdir1/capsdir/abc.txt
+  removing CapsDir1/CapsDir/AbC.txt (glob)
 #endif
 
   $ cd ..