diff --git a/docs/html/reference/pip_install.rst b/docs/html/reference/pip_install.rst
index c23b051da..ac37455cc 100644
--- a/docs/html/reference/pip_install.rst
+++ b/docs/html/reference/pip_install.rst
@@ -417,8 +417,8 @@ making fewer network calls).
 Mercurial
 ~~~~~~~~~
 
-The supported schemes are: ``hg+http``, ``hg+https``,
-``hg+static-http`` and ``hg+ssh``.
+The supported schemes are: ``hg+file``, ``hg+http``, ``hg+https``,
+``hg+static-http``, and ``hg+ssh``.
 
 Here are the supported forms::
 
diff --git a/news/4358.bugfix b/news/4358.bugfix
new file mode 100644
index 000000000..912083dc1
--- /dev/null
+++ b/news/4358.bugfix
@@ -0,0 +1 @@
+Correct inconsistency related to the `hg+file` scheme.
diff --git a/src/pip/_internal/vcs/mercurial.py b/src/pip/_internal/vcs/mercurial.py
index 7679b8640..bce30d73f 100644
--- a/src/pip/_internal/vcs/mercurial.py
+++ b/src/pip/_internal/vcs/mercurial.py
@@ -27,7 +27,9 @@ class Mercurial(VersionControl):
     name = 'hg'
     dirname = '.hg'
     repo_name = 'clone'
-    schemes = ('hg', 'hg+http', 'hg+https', 'hg+ssh', 'hg+static-http')
+    schemes = (
+        'hg', 'hg+file', 'hg+http', 'hg+https', 'hg+ssh', 'hg+static-http',
+    )
 
     @staticmethod
     def get_base_rev_args(rev):
diff --git a/tests/functional/test_install.py b/tests/functional/test_install.py
index 27b797dfe..119f2d3bd 100644
--- a/tests/functional/test_install.py
+++ b/tests/functional/test_install.py
@@ -334,9 +334,11 @@ def test_install_editable_uninstalls_existing_from_path(script, data):
 
 @need_mercurial
 def test_basic_install_editable_from_hg(script, tmpdir):
-    """Test cloning from Mercurial."""
+    """Test cloning and hg+file install from Mercurial."""
     pkg_path = _create_test_package(script, name='testpackage', vcs='hg')
-    args = ['install', '-e', 'hg+%s#egg=testpackage' % path_to_url(pkg_path)]
+    url = 'hg+{}#egg=testpackage'.format(path_to_url(pkg_path))
+    assert url.startswith('hg+file')
+    args = ['install', '-e', url]
     result = script.pip(*args)
     result.assert_installed('testpackage', with_files=['.hg'])
 
diff --git a/tests/unit/test_link.py b/tests/unit/test_link.py
index 8fbafe082..a9e75e38b 100644
--- a/tests/unit/test_link.py
+++ b/tests/unit/test_link.py
@@ -131,6 +131,7 @@ class TestLink:
     @pytest.mark.parametrize('url, expected', [
         ('git+https://github.com/org/repo', True),
         ('bzr+http://bzr.myproject.org/MyProject/trunk/#egg=MyProject', True),
+        ('hg+file://hg.company.com/repo', True),
         ('https://example.com/some.whl', False),
         ('file://home/foo/some.whl', False),
     ])