diff --git a/mercurial/patch.py b/mercurial/patch.py
--- a/mercurial/patch.py
+++ b/mercurial/patch.py
@@ -18,6 +18,7 @@ from node import hex, short
 import base85, mdiff, scmutil, util, diffhelpers, copies, encoding, error
 
 gitre = re.compile('diff --git a/(.*) b/(.*)')
+tabsplitter = re.compile(r'(\t+|[^\t]+)')
 
 class PatchError(Exception):
     pass
@@ -1673,15 +1674,26 @@ def difflabel(func, *args, **kw):
                 if line and line[0] not in ' +-@\\':
                     head = True
             stripline = line
+            diffline = False
             if not head and line and line[0] in '+-':
-                # highlight trailing whitespace, but only in changed lines
+                # highlight tabs and trailing whitespace, but only in
+                # changed lines
                 stripline = line.rstrip()
+                diffline = True
+
             prefixes = textprefixes
             if head:
                 prefixes = headprefixes
             for prefix, label in prefixes:
                 if stripline.startswith(prefix):
-                    yield (stripline, label)
+                    if diffline:
+                        for token in tabsplitter.findall(stripline):
+                            if '\t' == token[0]:
+                                yield (token, 'diff.tab')
+                            else:
+                                yield (token, label)
+                    else:
+                        yield (stripline, label)
                     break
             else:
                 yield (line, '')
diff --git a/tests/test-diff-color.t b/tests/test-diff-color.t
--- a/tests/test-diff-color.t
+++ b/tests/test-diff-color.t
@@ -159,4 +159,44 @@ issue3712: test colorization of subrepo 
    b
   \x1b[0;32m+bb\x1b[0m (esc)
 
+test tabs
+
+  $ cat >> a <<EOF
+  > 	one tab
+  > 		two tabs
+  > end tab	
+  > mid	tab
+  > 	all		tabs	
+  > EOF
+  $ hg diff --nodates --color=always
+  \x1b[0;1mdiff --git a/a b/a\x1b[0m (esc)
+  \x1b[0;31;1m--- a/a\x1b[0m (esc)
+  \x1b[0;32;1m+++ b/a\x1b[0m (esc)
+  \x1b[0;35m@@ -7,3 +7,9 @@\x1b[0m (esc)
+   a
+   c
+   c
+  \x1b[0;32m+aa\x1b[0m (esc)
+  \x1b[0;32m+\x1b[0m	\x1b[0;32mone tab\x1b[0m (esc)
+  \x1b[0;32m+\x1b[0m		\x1b[0;32mtwo tabs\x1b[0m (esc)
+  \x1b[0;32m+end tab\x1b[0m\x1b[0;1;41m	\x1b[0m (esc)
+  \x1b[0;32m+mid\x1b[0m	\x1b[0;32mtab\x1b[0m (esc)
+  \x1b[0;32m+\x1b[0m	\x1b[0;32mall\x1b[0m		\x1b[0;32mtabs\x1b[0m\x1b[0;1;41m	\x1b[0m (esc)
+  $ echo "[color]" >> $HGRCPATH
+  $ echo "diff.tab = bold magenta" >> $HGRCPATH
+  $ hg diff --nodates --color=always
+  \x1b[0;1mdiff --git a/a b/a\x1b[0m (esc)
+  \x1b[0;31;1m--- a/a\x1b[0m (esc)
+  \x1b[0;32;1m+++ b/a\x1b[0m (esc)
+  \x1b[0;35m@@ -7,3 +7,9 @@\x1b[0m (esc)
+   a
+   c
+   c
+  \x1b[0;32m+aa\x1b[0m (esc)
+  \x1b[0;32m+\x1b[0m\x1b[0;1;35m	\x1b[0m\x1b[0;32mone tab\x1b[0m (esc)
+  \x1b[0;32m+\x1b[0m\x1b[0;1;35m		\x1b[0m\x1b[0;32mtwo tabs\x1b[0m (esc)
+  \x1b[0;32m+end tab\x1b[0m\x1b[0;1;41m	\x1b[0m (esc)
+  \x1b[0;32m+mid\x1b[0m\x1b[0;1;35m	\x1b[0m\x1b[0;32mtab\x1b[0m (esc)
+  \x1b[0;32m+\x1b[0m\x1b[0;1;35m	\x1b[0m\x1b[0;32mall\x1b[0m\x1b[0;1;35m		\x1b[0m\x1b[0;32mtabs\x1b[0m\x1b[0;1;41m	\x1b[0m (esc)
+
   $ cd ..