diff --git a/mercurial/localrepo.py b/mercurial/localrepo.py
--- a/mercurial/localrepo.py
+++ b/mercurial/localrepo.py
@@ -174,10 +174,10 @@ class locallegacypeer(localpeer):
 
 class localrepository(object):
 
-    supportedformats = set(('revlogv1', 'generaldelta'))
+    supportedformats = set(('revlogv1', 'generaldelta', 'manifestv2'))
     _basesupported = supportedformats | set(('store', 'fncache', 'shared',
                                              'dotencode'))
-    openerreqs = set(('revlogv1', 'generaldelta'))
+    openerreqs = set(('revlogv1', 'generaldelta', 'manifestv2'))
     requirements = ['revlogv1']
     filtername = None
 
@@ -241,6 +241,8 @@ class localrepository(object):
                     )
                 if self.ui.configbool('format', 'generaldelta', False):
                     requirements.append("generaldelta")
+                if self.ui.configbool('experimental', 'manifestv2', False):
+                    requirements.append("manifestv2")
                 requirements = set(requirements)
             else:
                 raise error.RepoError(_("repository %s not found") % path)
@@ -334,9 +336,6 @@ class localrepository(object):
         usetreemanifest = self.ui.configbool('experimental', 'treemanifest')
         if usetreemanifest is not None:
             self.svfs.options['usetreemanifest'] = usetreemanifest
-        usemanifestv2 = self.ui.configbool('experimental', 'manifestv2')
-        if usemanifestv2 is not None:
-            self.svfs.options['usemanifestv2'] = usemanifestv2
 
     def _writerequirements(self):
         reqfile = self.vfs("requires", "w")
diff --git a/mercurial/manifest.py b/mercurial/manifest.py
--- a/mercurial/manifest.py
+++ b/mercurial/manifest.py
@@ -605,7 +605,7 @@ class manifest(revlog.revlog):
         if opts is not None:
             cachesize = opts.get('manifestcachesize', cachesize)
             usetreemanifest = opts.get('usetreemanifest', usetreemanifest)
-            usemanifestv2 = opts.get('usemanifestv2', usemanifestv2)
+            usemanifestv2 = opts.get('manifestv2', usemanifestv2)
         self._mancache = util.lrucachedict(cachesize)
         revlog.revlog.__init__(self, opener, "00manifest.i")
         self._usetreemanifest = usetreemanifest
diff --git a/tests/test-manifestv2.t b/tests/test-manifestv2.t
new file mode 100644
--- /dev/null
+++ b/tests/test-manifestv2.t
@@ -0,0 +1,31 @@
+Check that entry is added to .hg/requires
+
+  $ hg --config experimental.manifestv2=True init repo
+  $ cd repo
+  $ grep manifestv2 .hg/requires
+  manifestv2
+
+Set up simple repo
+
+  $ echo a > file1
+  $ echo b > file2
+  $ echo c > file3
+  $ hg ci -Aqm 'initial'
+  $ echo d > file2
+  $ hg ci -m 'modify file2'
+
+Check that 'hg verify', which uses manifest.readdelta(), works
+
+  $ hg verify
+  checking changesets
+  checking manifests
+  crosschecking files in changesets and manifests
+  checking files
+  3 files, 2 changesets, 4 total revisions
+
+TODO: Check that manifest revlog is smaller than for v1
+
+  $ hg debugindex -m
+     rev    offset  length   base linkrev nodeid       p1           p2
+       0         0     106      0       0 f6279f9f8b31 000000000000 000000000000
+       1       106      59      0       1 cd20459b75e6 f6279f9f8b31 000000000000