diff --git a/backend/LexBoxApi/Services/HgService.cs b/backend/LexBoxApi/Services/HgService.cs
index 8aa3d17ec9..f48bbf586b 100644
--- a/backend/LexBoxApi/Services/HgService.cs
+++ b/backend/LexBoxApi/Services/HgService.cs
@@ -229,7 +229,7 @@ public async Task<string[]> CleanupResetBackups(bool dryRun = false)
 
 
     /// <summary>
-    /// deletes all files and folders in the repo folder except for .hg
+    /// deletes all files and folders in the repo folder except for .hg, and drops .hg/hgrc
     /// </summary>
     private async Task CleanupRepoFolder(DirectoryInfo repoDir)
     {
@@ -237,7 +237,13 @@ await Task.Run(() =>
         {
             foreach (var info in repoDir.EnumerateFileSystemInfos())
             {
-                if (info.Name == ".hg") continue;
+                if (info.Name == ".hg")
+                {
+                    // Mercurial would trust an uploaded hgrc (hooks, extensions) on the server, and nothing here needs one.
+                    if (info is DirectoryInfo hg)
+                        foreach (var hgrc in hg.EnumerateFiles("hgrc")) hgrc.Delete();
+                    continue;
+                }
                 if (info is DirectoryInfo dir) dir.Delete(true);
                 else info.Delete();
             }
@@ -323,7 +329,7 @@ public Task RevertRepo(ProjectCode code, string revHash)
         // 1. Rename repo to repo-backup-date (verifying first that it does not exist, adding -NNN at the end (001, 002, 003) if it does)
         // 2. Make empty directory (NOT a repo yet) with this project code
         // 3. Clone repo-backup-date-NNN into empty directory, passing "-r revHash" param
-        // 4. Copy .hg/hgrc from backup dir, overwriting the one in the cloned dir
+        // 4. Delete the .hg/hgrc that the clone writes (it only points back at the backup); server repos don't keep one
         //
         // Will need an SSH key as a k8s secret, put it into authorized_keys on the hgweb side so that lexbox can do "ssh hgweb hg clone ..."
     }
diff --git a/backend/Testing/LexCore/Services/HgServiceTests.cs b/backend/Testing/LexCore/Services/HgServiceTests.cs
index 1e0b43e191..9b50218a6f 100644
--- a/backend/Testing/LexCore/Services/HgServiceTests.cs
+++ b/backend/Testing/LexCore/Services/HgServiceTests.cs
@@ -109,6 +109,29 @@ public async Task CanFinishResetByUnZippingAnArchive(string filePath)
             .Should().ContainSingle().Which.Should().Be(Path.Join(".hg", "important-file.bin"));
     }
 
+    [Theory]
+    [InlineData("")]
+    [InlineData("unzip-test/")]
+    public async Task FinishResetDropsUploadedHgrc(string prefix)
+    {
+        var code = "unzip-test-hgrc";
+        await _hgService.InitRepo(code);
+
+        using var stream = new MemoryStream();
+        using (var zipArchive = new ZipArchive(stream, ZipArchiveMode.Create, true))
+        {
+            CreateSimpleEntry(zipArchive, prefix + ".hg/hgrc");
+            CreateSimpleEntry(zipArchive, prefix + ".hg/important-file.bin");
+        }
+        stream.Position = 0;
+        await _hgService.FinishReset(code, stream);
+
+        var repoPath = Path.GetFullPath(Path.Join(_hgConfig.RepoPath, "u", code));
+        Directory.EnumerateFiles(repoPath, "*", SearchOption.AllDirectories)
+            .Select(p => Path.GetRelativePath(repoPath, p))
+            .Should().ContainSingle().Which.Should().Be(Path.Join(".hg", "important-file.bin"));
+    }
+
     [Theory]
     [InlineData("-xy")]
     [InlineData("-x-y-z")]