Add the following lines to your mercurial.ini
file:
[extensions] hgext.extdiff = [extdiff] cmd.diffmerge = C:\Program Files\SourceGear\Common\DiffMerge\sgdm.exe [merge-tools] diffmerge.executable = C:\Program Files\SourceGear\Common\DiffMerge\sgdm.exe diffmerge.args = -merge -result=$output $local $base $other diffmerge.binary = False diffmerge.symlinks = False diffmerge.gui = True diffmerge.premerge = True