diff --git a/integration_tests/__tests__/__snapshots__/show_config.test.js.snap b/integration_tests/__tests__/__snapshots__/show_config.test.js.snap
index 5911376175f3..153de9be7afe 100644
--- a/integration_tests/__tests__/__snapshots__/show_config.test.js.snap
+++ b/integration_tests/__tests__/__snapshots__/show_config.test.js.snap
@@ -54,6 +54,7 @@ exports[`--showConfig outputs config info and exits 1`] = `
   \\"framework\\": \\"jasmine2\\",
   \\"globalConfig\\": {
     \\"bail\\": false,
+    \\"changedFilesWithAncestor\\": false,
     \\"coverageDirectory\\": \\"<<REPLACED_ROOT_DIR>>/coverage\\",
     \\"coverageReporters\\": [
       \\"json\\",
diff --git a/integration_tests/__tests__/only_changed.test.js b/integration_tests/__tests__/only_changed.test.js
index cc5fbb7a5f73..b8798eadaa2c 100644
--- a/integration_tests/__tests__/only_changed.test.js
+++ b/integration_tests/__tests__/only_changed.test.js
@@ -16,6 +16,7 @@ import path from 'path';
 const skipOnWindows = require('skipOnWindows');
 const DIR = path.resolve(os.tmpdir(), 'jest_only_changed');
 const GIT = 'git -c user.name=jest_test -c user.email=jest_test@test.com';
+const HG = 'hg --config ui.username=jest_test';
 
 skipOnWindows.suite();
 
@@ -138,3 +139,53 @@ test('onlyChanged in config is overwritten by --all or testPathPattern', () => {
   expect(stderr).toMatch('PASS  __tests__/file2.test.js');
   expect(stderr).toMatch('PASS  __tests__/file3.test.js');
 });
+
+test('gets changed files for hg', async () => {
+  if (process.env.CI) {
+    // Circle and Travis have very old version of hg (v2, and current
+    // version is v4.2) and its API changed since then and not compatible
+    // any more. Changing the SCM version on CIs is not trivial, so we'll just
+    // skip this test and run it only locally.
+    return;
+  }
+  writeFiles(DIR, {
+    '.watchmanconfig': '',
+    '__tests__/file1.test.js': `require('../file1'); test('file1', () => {});`,
+    'file1.js': 'module.exports = {}',
+    'package.json': JSON.stringify({jest: {testEnvironment: 'node'}}),
+  });
+
+  run(`${HG} init`, DIR);
+  run(`${HG} add .`, DIR);
+  run(`${HG} commit -m "test"`, DIR);
+
+  let stdout;
+  let stderr;
+
+  ({stdout, stderr} = runJest(DIR, ['-o']));
+  expect(stdout).toMatch('No tests found related to files changed');
+
+  writeFiles(DIR, {
+    '__tests__/file2.test.js': `require('../file2'); test('file2', () => {});`,
+    'file2.js': 'module.exports = {}',
+    'file3.js': `require('./file2')`,
+  });
+
+  ({stdout, stderr} = runJest(DIR, ['-o']));
+  expect(stderr).toMatch('PASS  __tests__/file2.test.js');
+
+  run(`${HG} add .`, DIR);
+  run(`${HG} commit -m "test2"`, DIR);
+
+  writeFiles(DIR, {
+    '__tests__/file3.test.js': `require('../file3'); test('file3', () => {});`,
+  });
+
+  ({stdout, stderr} = runJest(DIR, ['-o']));
+  expect(stderr).toMatch('PASS  __tests__/file3.test.js');
+  expect(stderr).not.toMatch('PASS  __tests__/file2.test.js');
+
+  ({stdout, stderr} = runJest(DIR, ['-o', '--changedFilesWithAncestor']));
+  expect(stderr).toMatch('PASS  __tests__/file2.test.js');
+  expect(stderr).toMatch('PASS  __tests__/file3.test.js');
+});
diff --git a/packages/jest-changed-files/src/git.js b/packages/jest-changed-files/src/git.js
index f725bf5881cd..e3e7f95b9551 100644
--- a/packages/jest-changed-files/src/git.js
+++ b/packages/jest-changed-files/src/git.js
@@ -19,6 +19,11 @@ const adapter: SCMAdapter = {
     cwd: string,
     options?: Options,
   ): Promise<Array<Path>> => {
+    if (options && options.withAncestor) {
+      throw new Error(
+        '`changedFilesWithAncestor` is not supported in git repos.',
+      );
+    }
     return new Promise((resolve, reject) => {
       const args =
         options && options.lastCommit
diff --git a/packages/jest-changed-files/src/hg.js b/packages/jest-changed-files/src/hg.js
index 767e03eb3053..a33275f596c7 100644
--- a/packages/jest-changed-files/src/hg.js
+++ b/packages/jest-changed-files/src/hg.js
@@ -35,7 +35,7 @@ const adapter: SCMAdapter = {
       let stderr = '';
       child.stdout.on('data', data => (stdout += data));
       child.stderr.on('data', data => (stderr += data));
-      child.on('error', e => reject(e));
+      child.on('error', (error: Error) => reject(error));
       child.on('close', code => {
         if (code === 0) {
           stdout = stdout.trim();
@@ -49,7 +49,7 @@ const adapter: SCMAdapter = {
             );
           }
         } else {
-          reject(code + ': ' + stderr);
+          reject(new Error(code + ': ' + stderr));
         }
       });
     });
diff --git a/packages/jest-cli/src/cli/args.js b/packages/jest-cli/src/cli/args.js
index d320b8f616ab..31916f048a64 100644
--- a/packages/jest-cli/src/cli/args.js
+++ b/packages/jest-cli/src/cli/args.js
@@ -90,6 +90,13 @@ const options = {
       ' dependency information.',
     type: 'string',
   },
+  changedFilesWithAncestor: {
+    description:
+      'When used together with `--onlyChanged`, it runs tests ' +
+      'related to the current changes and the changes made in the last commit. ' +
+      '(NOTE: this only works for hg repos)',
+    type: 'boolean',
+  },
   ci: {
     default: isCI,
     description:
diff --git a/packages/jest-cli/src/get_changed_files_promise.js b/packages/jest-cli/src/get_changed_files_promise.js
index 896c0162aafa..0ab3b0b740d2 100644
--- a/packages/jest-cli/src/get_changed_files_promise.js
+++ b/packages/jest-cli/src/get_changed_files_promise.js
@@ -23,6 +23,7 @@ module.exports = (
     );
     return getChangedFilesForRoots(allRootsForAllProjects, {
       lastCommit: globalConfig.lastCommit,
+      withAncestor: globalConfig.changedFilesWithAncestor,
     });
   }
 
diff --git a/packages/jest-config/src/defaults.js b/packages/jest-config/src/defaults.js
index a6814b4995c8..6aa3e47409d5 100644
--- a/packages/jest-config/src/defaults.js
+++ b/packages/jest-config/src/defaults.js
@@ -34,6 +34,7 @@ module.exports = ({
   browser: false,
   cache: true,
   cacheDirectory,
+  changedFilesWithAncestor: false,
   clearMocks: false,
   coveragePathIgnorePatterns: [NODE_MODULES_REGEXP],
   coverageReporters: ['json', 'text', 'lcov', 'clover'],
diff --git a/packages/jest-config/src/index.js b/packages/jest-config/src/index.js
index da835ee3710a..406408843011 100644
--- a/packages/jest-config/src/index.js
+++ b/packages/jest-config/src/index.js
@@ -64,6 +64,7 @@ const getConfigs = (
   return {
     globalConfig: Object.freeze({
       bail: options.bail,
+      changedFilesWithAncestor: options.changedFilesWithAncestor,
       collectCoverage: options.collectCoverage,
       collectCoverageFrom: options.collectCoverageFrom,
       collectCoverageOnlyFrom: options.collectCoverageOnlyFrom,
diff --git a/packages/jest-config/src/normalize.js b/packages/jest-config/src/normalize.js
index 3d664add0078..263a9a83868e 100644
--- a/packages/jest-config/src/normalize.js
+++ b/packages/jest-config/src/normalize.js
@@ -448,6 +448,7 @@ function normalize(options: InitialOptions, argv: Argv) {
       case 'bail':
       case 'browser':
       case 'cache':
+      case 'changedFilesWithAncestor':
       case 'clearMocks':
       case 'collectCoverage':
       case 'coverageReporters':
diff --git a/packages/jest-config/src/valid_config.js b/packages/jest-config/src/valid_config.js
index 6d6f89f23bbd..6e69d1110f4b 100644
--- a/packages/jest-config/src/valid_config.js
+++ b/packages/jest-config/src/valid_config.js
@@ -21,6 +21,7 @@ module.exports = ({
   browser: false,
   cache: true,
   cacheDirectory: '/tmp/user/jest',
+  changedFilesWithAncestor: false,
   clearMocks: false,
   collectCoverage: true,
   collectCoverageFrom: ['src', '!public'],
diff --git a/types/Argv.js b/types/Argv.js
index 820153e01bef..2c61efa2db67 100644
--- a/types/Argv.js
+++ b/types/Argv.js
@@ -18,6 +18,7 @@ export type Argv = {|
   browser: boolean,
   cache: boolean,
   cacheDirectory: string,
+  changedFilesWithAncestor: boolean,
   clearMocks: boolean,
   ci: boolean,
   collectCoverage: boolean,
diff --git a/types/Config.js b/types/Config.js
index 5e1b2c6f1520..136e7aa3e3c1 100644
--- a/types/Config.js
+++ b/types/Config.js
@@ -28,6 +28,7 @@ export type DefaultOptions = {|
   browser: boolean,
   cache: boolean,
   cacheDirectory: Path,
+  changedFilesWithAncestor: boolean,
   clearMocks: boolean,
   coveragePathIgnorePatterns: Array<string>,
   coverageReporters: Array<string>,
@@ -67,6 +68,7 @@ export type InitialOptions = {|
   cache?: boolean,
   cacheDirectory?: Path,
   clearMocks?: boolean,
+  changedFilesWithAncestor?: boolean,
   collectCoverage?: boolean,
   collectCoverageFrom?: Array<Glob>,
   collectCoverageOnlyFrom?: {[key: string]: boolean},
@@ -134,6 +136,7 @@ export type SnapshotUpdateState = 'all' | 'new' | 'none';
 
 export type GlobalConfig = {|
   bail: boolean,
+  changedFilesWithAncestor: boolean,
   collectCoverage: boolean,
   collectCoverageFrom: Array<Glob>,
   collectCoverageOnlyFrom: ?{[key: string]: boolean},