diff --git a/mercurial/helptext/config.txt b/mercurial/helptext/config.txt
--- a/mercurial/helptext/config.txt
+++ b/mercurial/helptext/config.txt
@@ -1032,6 +1032,8 @@ Example ``.hg/hgrc``::
   incoming.autobuild:run-with-plain = yes
   # HGPLAIN never set
   incoming.autobuild:run-with-plain = no
+  # HGPLAIN inherited from environment (default before Mercurila 5.7)
+  incoming.autobuild:run-with-plain = auto
 
 Most hooks are run with environment variables set that give useful
 additional information. For each hook below, the environment variables
diff --git a/mercurial/hook.py b/mercurial/hook.py
--- a/mercurial/hook.py
+++ b/mercurial/hook.py
@@ -158,7 +158,10 @@ def _exthook(ui, repo, htype, name, cmd,
     env[b'HG_HOOKTYPE'] = htype
     env[b'HG_HOOKNAME'] = name
 
-    plain = ui.configbool(b'hooks', b'%s:run-with-plain' % name)
+    if ui.config(b'hooks', b'%s:run-with-plain' % name) == b'auto':
+        plain = ui.plain()
+    else:
+        plain = ui.configbool(b'hooks', b'%s:run-with-plain' % name)
     if plain:
         env[b'HGPLAIN'] = b'1'
     else:
diff --git a/tests/test-hook.t b/tests/test-hook.t
--- a/tests/test-hook.t
+++ b/tests/test-hook.t
@@ -1412,16 +1412,20 @@ HGPLAIN setting in hooks
   > pre-version.testing-yes:run-with-plain=yes
   > pre-version.testing-no=echo '### no ########' plain: \${HGPLAIN:-'<unset>'}
   > pre-version.testing-no:run-with-plain=no
+  > pre-version.testing-auto=echo '### auto ######' plain: \${HGPLAIN:-'<unset>'}
+  > pre-version.testing-auto:run-with-plain=auto
   > EOF
 
   $ (unset HGPLAIN; hg version --quiet)
   ### default ### plain: 1
   ### yes ####### plain: 1
   ### no ######## plain: <unset>
+  ### auto ###### plain: <unset>
   Mercurial Distributed SCM (*) (glob)
 
   $ HGPLAIN=1 hg version --quiet
   ### default ### plain: 1
   ### yes ####### plain: 1
   ### no ######## plain: <unset>
+  ### auto ###### plain: 1
   Mercurial Distributed SCM (*) (glob)