diff --git a/mercurial/merge.py b/mercurial/merge.py
--- a/mercurial/merge.py
+++ b/mercurial/merge.py
@@ -1038,6 +1038,12 @@ def batchremove(repo, actions):
     unlink = util.unlinkpath
     wjoin = repo.wjoin
     audit = repo.wvfs.audit
+    try:
+        cwd = os.getcwd()
+    except OSError as err:
+        if err.errno != errno.ENOENT:
+            raise
+        cwd = None
     i = 0
     for f, args, msg in actions:
         repo.ui.debug(" %s: %s -> r\n" % (f, msg))
@@ -1055,6 +1061,18 @@ def batchremove(repo, actions):
         i += 1
     if i > 0:
         yield i, f
+    if cwd:
+        # cwd was present before we started to remove files
+        # let's check if it is present after we removed them
+        try:
+            os.getcwd()
+        except OSError as err:
+            if err.errno != errno.ENOENT:
+                raise
+            # Print a warning if cwd was deleted
+            repo.ui.warn(_("current directory was removed\n"
+                           "(consider changing to repo root: %s)\n") %
+                         repo.root)
 
 def batchget(repo, mctx, actions):
     """apply gets to the working directory
diff --git a/tests/test-rebase-scenario-global.t b/tests/test-rebase-scenario-global.t
--- a/tests/test-rebase-scenario-global.t
+++ b/tests/test-rebase-scenario-global.t
@@ -758,6 +758,8 @@ Test that rebase is not confused by $CWD
   $ hg commit -m 'second source with subdir'
   $ hg rebase -b . -d 1 --traceback
   rebasing 2:779a07b1b7a0 "first source commit"
+  current directory was removed
+  (consider changing to repo root: $TESTTMP/cwd-vanish)
   rebasing 3:a7d6f3a00bf3 "second source with subdir" (tip)
   saved backup bundle to $TESTTMP/cwd-vanish/.hg/strip-backup/779a07b1b7a0-853e0073-backup.hg (glob)
 
diff --git a/tests/test-update-names.t b/tests/test-update-names.t
--- a/tests/test-update-names.t
+++ b/tests/test-update-names.t
@@ -72,3 +72,15 @@ Test update when two commits have symlin
   $ cd ..
 
 #endif
+
+Test that warning is printed if cwd is deleted during update
+  $ hg init r4 && cd r4
+  $ mkdir dir
+  $ cd dir
+  $ echo a > a
+  $ echo b > b
+  $ hg add a b
+  $ hg ci -m "file and dir"
+  $ hg up -q null
+  current directory was removed
+  (consider changing to repo root: $TESTTMP/r1/r4)