diff --git a/kallithea/lib/vcs/backends/hg/inmemory.py b/kallithea/lib/vcs/backends/hg/inmemory.py
--- a/kallithea/lib/vcs/backends/hg/inmemory.py
+++ b/kallithea/lib/vcs/backends/hg/inmemory.py
@@ -47,12 +47,7 @@ class MercurialInMemoryChangeset(BaseInM
 
             # check if this path is removed
             if path in (node.path for node in self.removed):
-                if getattr(memctx, '_returnnoneformissingfiles', False):
-                    return None
-                else:
-                    # (hg < 3.2) Raising exception is the way to mark node for
-                    # removal
-                    raise IOError(errno.ENOENT, '%s is deleted' % path)
+                return None
 
             # check if this path is added
             for node in self.added:
diff --git a/kallithea/lib/vcs/utils/hgcompat.py b/kallithea/lib/vcs/utils/hgcompat.py
--- a/kallithea/lib/vcs/utils/hgcompat.py
+++ b/kallithea/lib/vcs/utils/hgcompat.py
@@ -30,20 +30,8 @@ from mercurial.sshpeer import sshpeer
 from mercurial.util import url as hg_url
 from mercurial.scmutil import revrange
 from mercurial.node import nullrev
-
-# those authhandlers are patched for python 2.6.5 bug an
-# infinite looping when given invalid resources
 from mercurial.url import httpbasicauthhandler, httpdigestauthhandler
 
-import inspect
-# Mercurial 3.1 503bb3af70fe
-if inspect.getargspec(memfilectx.__init__).args[1] != 'repo':
-    _org__init__ = memfilectx.__init__
-
-    def _memfilectx__init__(self, repo, *a, **b):
-        return _org__init__(self, *a, **b)
-    memfilectx.__init__ = _memfilectx__init__
-
 # workaround for 3.3 94ac64bcf6fe and not calling largefiles reposetup correctly
 localrepository._lfstatuswriters = [lambda *msg, **opts: None]
 # 3.5 7699d3212994 added the invariant that repo.lfstatus must exist before hitting overridearchive
diff --git a/setup.py b/setup.py
--- a/setup.py
+++ b/setup.py
@@ -57,7 +57,7 @@ requirements = [
     "URLObject==2.3.4",
     "Routes==1.13",
     "dulwich>=0.14.1",
-    "mercurial>=2.9,<4.5",
+    "mercurial>=4.0,<4.5",
     "decorator >= 3.3.2",
     "Paste >= 2.0.3, < 3.0",
 ]