diff -r d90b0b30464b -r 95174c381525 mercurial/commands.py
--- a/mercurial/commands.py	Wed Nov 09 19:46:49 2011 -0500
+++ b/mercurial/commands.py	Wed Nov 09 19:46:51 2011 -0500
@@ -13,6 +13,7 @@
 import patch, help, url, encoding, templatekw, discovery
 import archival, changegroup, cmdutil, hbisect
 import sshserver, hgweb, hgweb.server, commandserver
+import match as matchmod
 import merge as mergemod
 import minirst, revset, fileset
 import dagparser, context, simplemerge
@@ -2432,23 +2433,45 @@
     if not pats:
         raise util.Abort(_('no files specified'))
 
-    m = scmutil.match(repo[None], pats, opts)
+    wctx = repo[None]
+    m = scmutil.match(wctx, pats, opts)
     s = repo.status(match=m, clean=True)
     forget = sorted(s[0] + s[1] + s[3] + s[6])
+    subforget = {}
     errs = 0
 
+    for subpath in wctx.substate:
+        sub = wctx.sub(subpath)
+        try:
+            submatch = matchmod.narrowmatcher(subpath, m)
+            for fsub in sub.walk(submatch):
+                if submatch.exact(fsub):
+                    subforget[os.path.join(subpath, fsub)] = (fsub, sub)
+        except error.LookupError:
+            ui.status(_("skipping missing subrepository: %s\n") % subpath)
+
     for f in m.files():
         if f not in repo.dirstate and not os.path.isdir(m.rel(f)):
-            if os.path.exists(m.rel(f)):
-                ui.warn(_('not removing %s: file is already untracked\n')
-                        % m.rel(f))
-            errs = 1
+            if f not in subforget:
+                if os.path.exists(m.rel(f)):
+                    ui.warn(_('not removing %s: file is already untracked\n')
+                            % m.rel(f))
+                errs = 1
 
     for f in forget:
         if ui.verbose or not m.exact(f):
             ui.status(_('removing %s\n') % m.rel(f))
 
-    repo[None].forget(forget)
+    if ui.verbose:
+        for f in sorted(subforget.keys()):
+            ui.status(_('removing %s\n') % m.rel(f))
+
+    wctx.forget(forget)
+
+    for f in sorted(subforget.keys()):
+        fsub, sub = subforget[f]
+        sub.forget([fsub])
+
     return errs
 
 @command(