diff --git a/mercurial/patch.py b/mercurial/patch.py
--- a/mercurial/patch.py
+++ b/mercurial/patch.py
@@ -923,7 +923,7 @@ def selectfile(afile_orig, bfile_orig, h
     if afile == bfile:
         goodb = gooda
     else:
-        goodb = not nullb and os.path.exists(bfile)
+        goodb = not nullb and os.path.lexists(bfile)
     createfunc = hunk.createfile
     missing = not goodb and not gooda and not createfunc()
 
diff --git a/tests/test-mq-symlinks b/tests/test-mq-symlinks
--- a/tests/test-mq-symlinks
+++ b/tests/test-mq-symlinks
@@ -55,3 +55,14 @@ hg qrefresh --git
 hg qpop
 hg qpush
 hg st -c
+
+echo '% replace broken symlink with another broken symlink'
+ln -s linka linka
+hg add linka
+hg qnew link
+hg mv linka linkb
+ln -sf linkb linkb
+hg qnew movelink
+hg qpop
+hg qpush
+$TESTDIR/readlink.py linkb
diff --git a/tests/test-mq-symlinks.out b/tests/test-mq-symlinks.out
--- a/tests/test-mq-symlinks.out
+++ b/tests/test-mq-symlinks.out
@@ -29,3 +29,9 @@ now at: removesl.patch
 C b
 C c
 C s
+% replace broken symlink with another broken symlink
+popping movelink
+now at: link
+applying movelink
+now at: movelink
+linkb -> linkb