diff --git a/tests/test-stdio.py b/tests/test-stdio.py
new file mode 100755
--- /dev/null
+++ b/tests/test-stdio.py
@@ -0,0 +1,105 @@
+#!/usr/bin/env python
+"""
+Tests the buffering behavior of stdio streams in `mercurial.utils.procutil`.
+"""
+from __future__ import absolute_import
+
+import contextlib
+import os
+import subprocess
+import sys
+import unittest
+
+from mercurial import pycompat
+
+
+CHILD_PROCESS = r'''
+import os
+
+from mercurial import dispatch
+from mercurial.utils import procutil
+
+dispatch.initstdio()
+procutil.stdout.write(b'aaa')
+os.write(procutil.stdout.fileno(), b'[written aaa]')
+procutil.stdout.write(b'bbb\n')
+os.write(procutil.stdout.fileno(), b'[written bbb\\n]')
+'''
+UNBUFFERED = b'aaa[written aaa]bbb\n[written bbb\\n]'
+LINE_BUFFERED = b'[written aaa]aaabbb\n[written bbb\\n]'
+FULLY_BUFFERED = b'[written aaa][written bbb\\n]aaabbb\n'
+
+
+@contextlib.contextmanager
+def _closing(fds):
+    try:
+        yield
+    finally:
+        for fd in fds:
+            try:
+                os.close(fd)
+            except EnvironmentError:
+                pass
+
+
+@contextlib.contextmanager
+def _pipes():
+    rwpair = os.pipe()
+    with _closing(rwpair):
+        yield rwpair
+
+
+@contextlib.contextmanager
+def _ptys():
+    if pycompat.iswindows:
+        raise unittest.SkipTest("PTYs are not supported on Windows")
+    import pty
+    import tty
+
+    rwpair = pty.openpty()
+    with _closing(rwpair):
+        tty.setraw(rwpair[0])
+        yield rwpair
+
+
+class TestStdout(unittest.TestCase):
+    def _test(self, rwpair_generator, expected_output, python_args=[]):
+        with rwpair_generator() as (stdout_receiver, child_stdout), open(
+            os.devnull, 'rb'
+        ) as child_stdin:
+            proc = subprocess.Popen(
+                [sys.executable] + python_args + ['-c', CHILD_PROCESS],
+                stdin=child_stdin,
+                stdout=child_stdout,
+                stderr=None,
+            )
+            retcode = proc.wait()
+            self.assertEqual(retcode, 0)
+            self.assertEqual(os.read(stdout_receiver, 1024), expected_output)
+
+    def test_stdout_pipes(self):
+        self._test(_pipes, FULLY_BUFFERED)
+
+    def test_stdout_ptys(self):
+        self._test(_ptys, LINE_BUFFERED)
+
+    def test_stdout_pipes_unbuffered(self):
+        self._test(_pipes, UNBUFFERED, python_args=['-u'])
+
+    def test_stdout_ptys_unbuffered(self):
+        self._test(_ptys, UNBUFFERED, python_args=['-u'])
+
+    # On Windows, test_stdout_ptys wouldn't pass, but it's skipped anyway.
+    if not pycompat.ispy3 and not pycompat.iswindows:
+        # On Python 2 on non-Windows, we manually open stdout in line-buffered
+        # mode if connected to a TTY. We should check if Python was configured
+        # to use unbuffered stdout, but it's hard to do that.
+        test_stdout_ptys_unbuffered = unittest.expectedFailure(
+            test_stdout_ptys_unbuffered
+        )
+
+
+if __name__ == '__main__':
+    import silenttestrunner
+
+    silenttestrunner.main(__name__)