diff --git a/mercurial/hg.py b/mercurial/hg.py
--- a/mercurial/hg.py
+++ b/mercurial/hg.py
@@ -69,11 +69,8 @@ schemes = {
 }
 
 def _lookup(path):
-    scheme = 'file'
-    if path:
-        c = path.find(':')
-        if c > 0:
-            scheme = path[:c]
+    u = url.url(path)
+    scheme = u.scheme or 'file'
     thing = schemes.get(scheme) or schemes['file']
     try:
         return thing(path)
diff --git a/tests/test-pull.t b/tests/test-pull.t
--- a/tests/test-pull.t
+++ b/tests/test-pull.t
@@ -68,7 +68,7 @@ Issue622: hg init && hg pull -u URL does
 Test 'file:' uri handling:
 
   $ hg pull -q file://../test-doesnt-exist
-  abort: repository /test-doesnt-exist not found!
+  abort: file:// URLs can only refer to localhost
   [255]
 
   $ hg pull -q file:../test