--- a/hg_delta_editor.py
+++ b/hg_delta_editor.py
@@ -845,7 +845,7 @@ class HgChangeReceiver(delta.Editor):
                 # assuming it is a directory
                 self.externals[path] = None
                 map(self.delete_file, [pat for pat in self.current_files.iterkeys()
-                                       if pat.startswith(path)])
+                                       if pat.startswith(path+'/')])
                 for f in ctx.walk(our_util.PrefixMatch(br_path2)):
                     f_p = '%s/%s' % (path, f[len(br_path2):])
                     if f_p not in self.current_files:

new file mode 100755
--- /dev/null
+++ b/tests/fixtures/branch_create_with_dir_delete.sh
@@ -0,0 +1,37 @@
+#!/bin/sh
+mkdir temp
+cd temp
+svnadmin create repo
+svn co file://`pwd`/repo wc
+cd wc
+mkdir branches trunk tags
+svn add *
+svn ci -m 'btt'
+cd trunk
+for a in alpha beta gamma delta ; do
+    echo $a > $a
+    svn add $a
+done
+svn ci -m 'Add files.'
+mkdir al
+echo foo > al/foo
+svn add al
+svn ci -m 'add directory al to delete on the branch'
+cd ..
+svn up
+svn cp trunk branches/dev_branch
+svn rm branches/dev_branch/al
+svn ci -m 'branch'
+cd branches/dev_branch
+svn rm delta
+echo narf > alpha
+echo iota > iota
+svn add iota
+svn ci -m 'branch changes'
+cd ../../../..
+svnadmin dump temp/repo > branch_create_with_dir_delete.svndump
+echo
+echo 'Complete.'
+echo 'You probably want to clean up temp now.'
+echo 'Dump in branch_create_with_dir_delete.svndump'
+exit 0

new file mode 100644
--- /dev/null
+++ b/tests/fixtures/branch_create_with_dir_delete.svndump
@@ -0,0 +1,237 @@
+SVN-fs-dump-format-version: 2
+
+UUID: 88f76347-3f0e-4a36-b1e1-8dec7ad11590
+
+Revision-number: 0
+Prop-content-length: 56
+Content-length: 56
+
+K 8
+svn:date
+V 27
+2009-04-07T22:37:33.524401Z
+PROPS-END
+
+Revision-number: 1
+Prop-content-length: 102
+Content-length: 102
+
+K 7
+svn:log
+V 3
+btt
+K 10
+svn:author
+V 5
+durin
+K 8
+svn:date
+V 27
+2009-04-07T22:37:34.076074Z
+PROPS-END
+
+Node-path: branches
+Node-kind: dir
+Node-action: add
+Prop-content-length: 10
+Content-length: 10
+
+PROPS-END
+
+
+Node-path: tags
+Node-kind: dir
+Node-action: add
+Prop-content-length: 10
+Content-length: 10
+
+PROPS-END
+
+
+Node-path: trunk
+Node-kind: dir
+Node-action: add
+Prop-content-length: 10
+Content-length: 10
+
+PROPS-END
+
+
+Revision-number: 2
+Prop-content-length: 110
+Content-length: 110
+
+K 7
+svn:log
+V 10
+Add files.
+K 10
+svn:author
+V 5
+durin
+K 8
+svn:date
+V 27
+2009-04-07T22:37:35.119223Z
+PROPS-END
+
+Node-path: trunk/alpha
+Node-kind: file
+Node-action: add
+Prop-content-length: 10
+Text-content-length: 6
+Text-content-md5: 9f9f90dbe3e5ee1218c86b8839db1995
+Content-length: 16
+
+PROPS-END
+alpha
+
+
+Node-path: trunk/beta
+Node-kind: file
+Node-action: add
+Prop-content-length: 10
+Text-content-length: 5
+Text-content-md5: f0cf2a92516045024a0c99147b28f05b
+Content-length: 15
+
+PROPS-END
+beta
+
+
+Node-path: trunk/delta
+Node-kind: file
+Node-action: add
+Prop-content-length: 10
+Text-content-length: 6
+Text-content-md5: d2840cc81bc032bd1141b56687d0f93c
+Content-length: 16
+
+PROPS-END
+delta
+
+
+Node-path: trunk/gamma
+Node-kind: file
+Node-action: add
+Prop-content-length: 10
+Text-content-length: 6
+Text-content-md5: 303febb9068384eca46b5b6516843b35
+Content-length: 16
+
+PROPS-END
+gamma
+
+
+Revision-number: 3
+Prop-content-length: 140
+Content-length: 140
+
+K 7
+svn:log
+V 40
+add directory al to delete on the branch
+K 10
+svn:author
+V 5
+durin
+K 8
+svn:date
+V 27
+2009-04-07T22:37:36.075475Z
+PROPS-END
+
+Node-path: trunk/al
+Node-kind: dir
+Node-action: add
+Prop-content-length: 10
+Content-length: 10
+
+PROPS-END
+
+
+Node-path: trunk/al/foo
+Node-kind: file
+Node-action: add
+Prop-content-length: 10
+Text-content-length: 4
+Text-content-md5: d3b07384d113edec49eaa6238ad5ff00
+Content-length: 14
+
+PROPS-END
+foo
+
+
+Revision-number: 4
+Prop-content-length: 105
+Content-length: 105
+
+K 7
+svn:log
+V 6
+branch
+K 10
+svn:author
+V 5
+durin
+K 8
+svn:date
+V 27
+2009-04-07T22:37:39.073788Z
+PROPS-END
+
+Node-path: branches/dev_branch
+Node-kind: dir
+Node-action: add
+Node-copyfrom-rev: 3
+Node-copyfrom-path: trunk
+
+
+Node-path: branches/dev_branch/al
+Node-action: delete
+
+
+Revision-number: 5
+Prop-content-length: 114
+Content-length: 114
+
+K 7
+svn:log
+V 14
+branch changes
+K 10
+svn:author
+V 5
+durin
+K 8
+svn:date
+V 27
+2009-04-07T22:37:40.093715Z
+PROPS-END
+
+Node-path: branches/dev_branch/alpha
+Node-kind: file
+Node-action: change
+Text-content-length: 5
+Text-content-md5: 5e723ed52db2000686425ca28bc5ba4a
+Content-length: 5
+
+narf
+
+
+Node-path: branches/dev_branch/iota
+Node-kind: file
+Node-action: add
+Prop-content-length: 10
+Text-content-length: 5
+Text-content-md5: ebcf3971120220589f1dfbf8d56e25b9
+Content-length: 15
+
+PROPS-END
+iota
+
+
+Node-path: branches/dev_branch/delta
+Node-action: delete
+
+

--- a/tests/test_fetch_branches.py
+++ b/tests/test_fetch_branches.py
@@ -53,6 +53,12 @@ class TestFetchBranches(test_util.TestBa
     def test_replace_trunk_with_branch_stupid(self):
         self.test_replace_trunk_with_branch(stupid=True)
 
+    def test_branch_create_with_dir_delete_works(self, stupid=False):
+        repo = self._load_fixture_and_fetch('branch_create_with_dir_delete.svndump',
+                                            stupid)
+        self.assertEqual(repo['tip'].manifest().keys(),
+                         ['alpha', 'beta', 'iota', 'gamma', ])
+
 def suite():
     all = [unittest.TestLoader().loadTestsFromTestCase(TestFetchBranches),
           ]