diff --git a/tests/hghave.py b/tests/hghave.py
--- a/tests/hghave.py
+++ b/tests/hghave.py
@@ -124,6 +124,10 @@ def has_bzr_range(v):
     except ImportError:
         return False
 
+@check("chg", "running with chg")
+def has_chg():
+    return 'CHGHG' in os.environ
+
 @check("cvs", "cvs client/server")
 def has_cvs():
     re = r'Concurrent Versions System.*?server'
diff --git a/tests/run-tests.py b/tests/run-tests.py
--- a/tests/run-tests.py
+++ b/tests/run-tests.py
@@ -2064,6 +2064,8 @@ class TestRunner(object):
         chgbindir = self._bindir
         if self.options.chg or self.options.with_chg:
             osenvironb[b'CHGHG'] = os.path.join(self._bindir, self._hgcommand)
+        else:
+            osenvironb.pop(b'CHGHG', None)  # drop flag for hghave
         if self.options.chg:
             self._hgcommand = b'chg'
         elif self.options.with_chg: