diff --git a/mercurial/util.py b/mercurial/util.py
--- a/mercurial/util.py
+++ b/mercurial/util.py
@@ -1901,7 +1901,7 @@ def walkrepos(path, followsym=False, see
         _add_dir_if_not_there(seen_dirs, path)
     for root, dirs, files in os.walk(path, topdown=True, onerror=errhandler):
         if '.hg' in dirs:
-            dirs.remove('.hg') # don't recurse inside the .hg directory
+            dirs[:] = [] # don't descend further
             yield root # found a repository
             qroot = os.path.join(root, '.hg', 'patches')
             if os.path.isdir(os.path.join(qroot, '.hg')):
diff --git a/tests/test-hgwebdir b/tests/test-hgwebdir
--- a/tests/test-hgwebdir
+++ b/tests/test-hgwebdir
@@ -16,14 +16,8 @@ hg --cwd b ci -Amb -d'2 0'
 hg init c
 echo c > c/c
 hg --cwd c ci -Amc -d'3 0'
+root=`pwd`
 
-cd b
-hg init d
-echo d > d/d
-hg --cwd d ci -Amd
-cd ..
-
-root=`pwd`
 cd ..
 
 cat > paths.conf <<EOF
@@ -85,7 +79,6 @@ echo % should succeed
 "$TESTDIR/get-with-headers.py" localhost:$HGPORT2 '/a/file/tip/a?style=raw'
 "$TESTDIR/get-with-headers.py" localhost:$HGPORT2 '/b/file/tip/b?style=raw'
 "$TESTDIR/get-with-headers.py" localhost:$HGPORT2 '/c/file/tip/c?style=raw'
-"$TESTDIR/get-with-headers.py" localhost:$HGPORT2 '/b/d/rev/tip/?style=raw'
 
 echo % paths errors 1
 cat error-paths-1.log
diff --git a/tests/test-hgwebdir.out b/tests/test-hgwebdir.out
--- a/tests/test-hgwebdir.out
+++ b/tests/test-hgwebdir.out
@@ -1,7 +1,6 @@
 adding a
 adding b
 adding c
-adding d
 % should give a 404 - file does not exist
 404 Not Found
 
@@ -32,7 +31,6 @@ 200 Script output follows
 /b/
 /coll/a/
 /coll/b/
-/coll/b/d/
 /coll/c/
 /t/a/
 
@@ -112,7 +110,6 @@ 200 Script output follows
 
 /coll/a/
 /coll/b/
-/coll/b/d/
 /coll/c/
 
 200 Script output follows
@@ -124,7 +121,6 @@ 200 Script output follows
 
 /a/
 /b/
-/b/d/
 /c/
 
 200 Script output follows
@@ -136,21 +132,6 @@ b
 200 Script output follows
 
 c
-200 Script output follows
-
-
-# HG changeset patch
-# User test
-# Date 0 0
-# Node ID 43cb50608b2ae8635a62e2e8730adefc32a274ee
-
-d
-
---- /dev/null	Thu Jan 01 00:00:00 1970 +0000
-+++ b/d	Thu Jan 01 00:00:00 1970 +0000
-@@ -0,0 +1,1 @@
-+d
-
 % paths errors 1
 % paths errors 2
 % collections errors
diff --git a/tests/test-walkrepo.py b/tests/test-walkrepo.py
--- a/tests/test-walkrepo.py
+++ b/tests/test-walkrepo.py
@@ -12,12 +12,6 @@ hg.repository(u, 'top1', create=1)
 mkdir('subdir')
 chdir('subdir')
 hg.repository(u, 'sub1', create=1)
-chdir('sub1')
-hg.repository(u, 'inside_sub1', create=1)
-chdir('.hg')
-hg.repository(u, 'patches', create=1)
-chdir(os.path.pardir)
-chdir(os.path.pardir)
 mkdir('subsubdir')
 chdir('subsubdir')
 hg.repository(u, 'subsub1', create=1)
@@ -28,12 +22,12 @@ if sym:
 
 def runtest():
     reposet = frozenset(walkrepos('.', followsym=True))
-    if sym and (len(reposet) != 5):
+    if sym and (len(reposet) != 3):
         print "reposet = %r" % (reposet,)
-        raise SystemExit(1, "Found %d repositories when I should have found 5" % (len(reposet),))
-    if (not sym) and (len(reposet) != 4):
+        raise SystemExit(1, "Found %d repositories when I should have found 3" % (len(reposet),))
+    if (not sym) and (len(reposet) != 2):
         print "reposet = %r" % (reposet,)
-        raise SystemExit(1, "Found %d repositories when I should have found 4" % (len(reposet),))
+        raise SystemExit(1, "Found %d repositories when I should have found 2" % (len(reposet),))
     sub1set = frozenset((pjoin('.', 'sub1'),
                          pjoin('.', 'circle', 'subdir', 'sub1')))
     if len(sub1set & reposet) != 1: