diff --git a/mercurial/tags.py b/mercurial/tags.py
--- a/mercurial/tags.py
+++ b/mercurial/tags.py
@@ -72,6 +72,15 @@ def readlocaltags(ui, repo, alltags, tag
     filetags = _readtags(
         ui, repo, data.splitlines(), "localtags",
         recode=encoding.fromlocal)
+
+    # remove tags pointing to invalid nodes
+    cl = repo.changelog
+    for t in filetags.keys():
+        try:
+            cl.rev(filetags[t][0])
+        except (LookupError, ValueError):
+            del filetags[t]
+
     _updatetags(filetags, "local", alltags, tagtypes)
 
 def _readtags(ui, repo, lines, fn, recode=None):
diff --git a/tests/test-obsolete.t b/tests/test-obsolete.t
--- a/tests/test-obsolete.t
+++ b/tests/test-obsolete.t
@@ -907,3 +907,15 @@ Test that a local tag blocks a changeset
      date:        Thu Jan 01 00:00:00 1970 +0000
      summary:     A
   
+Test that removing a local tag does not cause some commands to fail
+
+  $ hg tag -l -r tip tiptag
+  $ hg tags
+  tiptag                             2:3816541e5485
+  tip                                2:3816541e5485
+  visible                            0:193e9254ce7e
+  $ hg --config extensions.strip= strip -r tip --no-backup
+  0 files updated, 0 files merged, 1 files removed, 0 files unresolved
+  $ hg tags
+  visible                            0:193e9254ce7e
+  tip                                0:193e9254ce7e