--- a/mercurial-common/src/jetbrains/buildServer/buildTriggers/vcs/mercurial/HgRepo.java	Mon Feb 10 10:57:16 2014 +0100
+++ b/mercurial-common/src/jetbrains/buildServer/buildTriggers/vcs/mercurial/HgRepo.java	Mon Feb 10 20:26:24 2014 +0100
@@ -94,6 +94,10 @@
     return new BookmarksCommand(myCommandSettingsFactory.create(), myHgPath, myWorkingDir, myAuthSettings);
   }
 
+  public UpdateBookmarkCommand updateBookmark() {
+    return new UpdateBookmarkCommand(myCommandSettingsFactory.create(), myHgPath, myWorkingDir, myAuthSettings);
+  }
+
   public TagsCommand tags() {
     return new TagsCommand(myCommandSettingsFactory.create(), myHgPath, myWorkingDir, myAuthSettings);
   }

--- a/mercurial-common/src/jetbrains/buildServer/buildTriggers/vcs/mercurial/command/PushCommand.java	Mon Feb 10 10:57:16 2014 +0100
+++ b/mercurial-common/src/jetbrains/buildServer/buildTriggers/vcs/mercurial/command/PushCommand.java	Mon Feb 10 20:26:24 2014 +0100
@@ -25,6 +25,7 @@
  */
 public class PushCommand extends AuthCommand {
 
+  private String myBookmark;
   private String myRepositoryUrl;
 
   public PushCommand(@NotNull CommandSettings commandSettings,
@@ -34,6 +35,11 @@
     super(commandSettings, hgPath, workingDir, authSettings);
   }
 
+  public PushCommand bookmark(@NotNull String bookmark) {
+    myBookmark = bookmark;
+    return this;
+  }
+
   public PushCommand toRepository(@NotNull String repositoryUrl) {
     myRepositoryUrl = repositoryUrl;
     return this;
@@ -42,6 +48,9 @@
   public void call() throws VcsException {
     MercurialCommandLine cli = createCommandLine();
     cli.addParameter("push");
+    if (myBookmark != null) {
+      cli.addParameters("-B", myBookmark);
+    }
     if (myRepositoryUrl.startsWith("http")) {
       addHttpAuthParams(cli);
       cli.addParameter(myRepositoryUrl);

--- /dev/null	Thu Jan 01 00:00:00 1970 +0000
+++ b/mercurial-common/src/jetbrains/buildServer/buildTriggers/vcs/mercurial/command/UpdateBookmarkCommand.java	Mon Feb 10 20:26:24 2014 +0100
@@ -0,0 +1,56 @@
+/*
+ * Copyright 2000-2014 JetBrains s.r.o.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+package jetbrains.buildServer.buildTriggers.vcs.mercurial.command;
+
+import jetbrains.buildServer.vcs.VcsException;
+import org.jetbrains.annotations.NotNull;
+
+import java.io.File;
+
+public class UpdateBookmarkCommand extends VcsRootCommand {
+
+  private String myBookmarkName;
+  private String myRevision;
+
+  public UpdateBookmarkCommand(@NotNull CommandSettings commandSettings,
+                               @NotNull String hgPath,
+                               @NotNull File workingDir,
+                               @NotNull AuthSettings authSettings) {
+    super(commandSettings, hgPath, workingDir, authSettings);
+  }
+
+  public UpdateBookmarkCommand name(@NotNull String bookmarkName) {
+    myBookmarkName = bookmarkName;
+    return this;
+  }
+
+  public UpdateBookmarkCommand setRevision(@NotNull String revision) {
+    myRevision = revision;
+    return this;
+  }
+
+  public void call() throws VcsException {
+    MercurialCommandLine cmd = createCommandLine();
+    cmd.addParameter("bookmark");
+    if (myBookmarkName != null)
+      cmd.addParameter(myBookmarkName);
+    if (myRevision != null) {
+      cmd.addParameters("-r", myRevision);
+    }
+    runCommand(cmd);
+  }
+}

--- a/mercurial-server/src/jetbrains/buildServer/buildTriggers/vcs/mercurial/MercurialMergeSupport.java	Mon Feb 10 10:57:16 2014 +0100
+++ b/mercurial-server/src/jetbrains/buildServer/buildTriggers/vcs/mercurial/MercurialMergeSupport.java	Mon Feb 10 20:26:24 2014 +0100
@@ -18,6 +18,7 @@
 
 import com.intellij.openapi.diagnostic.Logger;
 import jetbrains.buildServer.buildTriggers.vcs.mercurial.command.HgVcsRoot;
+import jetbrains.buildServer.buildTriggers.vcs.mercurial.command.PushCommand;
 import jetbrains.buildServer.buildTriggers.vcs.mercurial.command.exception.MergeConflictException;
 import jetbrains.buildServer.buildTriggers.vcs.mercurial.command.exception.MergeWithWorkingDirAncestor;
 import jetbrains.buildServer.vcs.*;
@@ -116,9 +117,15 @@
       }
 
       repo.commit().by(hgRoot.getUserForTag()).message(message).call();
+      boolean bookmark = isBookmark(repo, dstBranch);
+      if (bookmark)
+        repo.updateBookmark().name(dstBranch).call();
 
       try {
-        repo.push().toRepository(hgRoot.getRepository()).call();
+        PushCommand push = repo.push().toRepository(hgRoot.getRepository());
+        if (bookmark)
+          push.bookmark(dstBranch);
+        push.call();
       } catch (VcsException e) {
         LOG.info("Error while pushing a merge commit, root " + root + ", revision " + srcRevision + ", destination " + dstBranch, e);
         throw e;
@@ -135,6 +142,13 @@
   }
 
 
+  private boolean isBookmark(@NotNull HgRepo repo, @NotNull String branch) throws VcsException {
+    if (repo.branches().call().keySet().contains(branch))
+      return false;
+    return repo.bookmarks().call().keySet().contains(branch);
+  }
+
+
   private List<String> detectConflicts(@NotNull HgVcsRoot root, @NotNull String prefix, @NotNull HgRepo repo) throws VcsException {
     List<String> conflicts = new ArrayList<String>();
     for (String conflict : repo.resolve().call()) {