--- a/autoland/hg/autoland_hgrc
+++ b/autoland/hg/autoland_hgrc
@@ -1,10 +1,10 @@
 [ui]
 username = Otto Länd <bind-autoland@mozilla.com>
-merge = internal:fail
+merge = internal:merge
 ssh = ssh -o "SendEnv AUTOLAND_REQUEST_USER"
 
 [extensions]
 purge =
 rebase =
 strip =
 rewritecommitdescriptions = /home/ubuntu/version-control-tools/autoland/hgext/rewritecommitdescriptions.py

new file mode 100644
--- /dev/null
+++ b/autoland/tests/test-autoland-merge.t
@@ -0,0 +1,93 @@
+#require mozreviewdocker
+
+  $ . $TESTDIR/hgext/reviewboard/tests/helpers.sh
+  $ commonenv
+  $ mozreview create-user cthulhu@example.com password 'Cthulhu :cthulhu'
+  Created user 6
+
+Create an initial revision.
+
+  $ cd client
+  $ echo foo > foo
+  $ hg commit -A -m 'root commit'
+  adding foo
+  $ hg phase --public -r .
+
+Create a commit to test on Try
+
+  $ bugzilla create-bug TestProduct TestComponent 'First Bug'
+  $ echo initial > foo
+  $ hg commit -m 'Bug 1 - some stuff; r?cthulhu'
+  $ hg push
+  pushing to ssh://*:$HGPORT6/test-repo (glob)
+  (adding commit id to 1 changesets)
+  saved backup bundle to $TESTTMP/client/.hg/strip-backup/633b0929fc18-25aef645-addcommitid.hg (glob)
+  searching for changes
+  remote: adding changesets
+  remote: adding manifests
+  remote: adding file changes
+  remote: added 2 changesets with 2 changes to 1 files
+  remote: recorded push in pushlog
+  submitting 1 changesets for review
+  
+  changeset:  1:b92ab6726259
+  summary:    Bug 1 - some stuff; r?cthulhu
+  review:     http://*:$HGPORT1/r/2 (draft) (glob)
+  
+  review id:  bz://1/mynick
+  review url: http://*:$HGPORT1/r/1 (draft) (glob)
+  (visit review url to publish these review requests so others can see them)
+
+Post a job
+
+  $ REV=`hg log -r . --template "{node|short}"`
+  $ ottoland post-autoland-job $AUTOLAND_URL test-repo $REV inbound http://localhost:9898 --commit-descriptions "{\"$REV\": \"Bug 1 - some stuff; r=cthulhu\"}"
+  (200, u'{\n  "request_id": 1\n}')
+  $ ottoland autoland-job-status $AUTOLAND_URL 1 --poll
+  (200, u'{\n  "commit_descriptions": {\n    "b92ab6726259": "Bug 1 - some stuff; r=cthulhu"\n  }, \n  "destination": "inbound", \n  "error_msg": "", \n  "landed": true, \n  "ldap_username": "autolanduser@example.com", \n  "push_bookmark": "", \n  "result": "9dc773c72939", \n  "rev": "b92ab6726259", \n  "tree": "test-repo", \n  "trysyntax": ""\n}')
+  $ mozreview exec autoland hg log /repos/inbound-test-repo/ --template '{rev}:{desc\|firstline}:{phase}\\n'
+  0:Bug 1 - some stuff; r=cthulhu:public
+
+Post a job with a bad merge
+
+  $ mozreview exec autoland "bash -c cd /repos/inbound-test-repo/ && echo foo2 > foo"
+  $ mozreview exec autoland "bash -c cd /repos/inbound-test-repo/ && hg commit -m \"trouble\""
+  $ echo foo3 > foo
+  $ hg commit -m 'Bug 1 - more stuff; r?cthulhu'
+  $ hg push
+  pushing to ssh://172.17.0.1:$HGPORT6/test-repo
+  searching for changes
+  remote: adding changesets
+  remote: adding manifests
+  remote: adding file changes
+  remote: added 2 changesets with 2 changes to 1 files
+  remote: recorded push in pushlog
+  submitting 3 changesets for review
+  
+  changeset:  1:b92ab6726259
+  summary:    Bug 1 - some stuff; r?cthulhu
+  review:     http://172.17.0.1:$HGPORT1/r/2 (draft)
+  
+  changeset:  2:c698e9b61b34
+  summary:    trouble
+  review:     http://172.17.0.1:$HGPORT1/r/3 (draft)
+  
+  changeset:  3:b28c57a24a9e
+  summary:    Bug 1 - more stuff; r?cthulhu
+  review:     http://172.17.0.1:$HGPORT1/r/4 (draft)
+  
+  review id:  bz://1/mynick
+  review url: http://172.17.0.1:$HGPORT1/r/1 (draft)
+  (review requests lack reviewers; visit review url to assign reviewers)
+  (visit review url to publish these review requests so others can see them)
+  $ REV=`hg log -r . --template "{node|short}"`
+  $ ottoland post-autoland-job $AUTOLAND_URL test-repo $REV inbound http://localhost:9898 --commit-descriptions "{\"$REV\": \"Bug 1 - more stuff; r=cthulhu\"}"
+  (200, u'{\n  "request_id": 2\n}')
+  $ ottoland autoland-job-status $AUTOLAND_URL 2 --poll
+  (200, u'{\n  "commit_descriptions": {\n    "b28c57a24a9e": "Bug 1 - more stuff; r=cthulhu"\n  }, \n  "destination": "inbound", \n  "error_msg": "We\'re sorry, Autoland could not rebase your commits for you automatically. Please manually rebase your commits and try again.\\n\\nhg error in cmd: hg rebase -s 8a6b70a9c3b6 -d 9dc773c72939: rebasing 4:8a6b70a9c3b6 \\"Bug 1 - more stuff; r=cthulhu\\" (tip)\\nmerging foo\\nwarning: conflicts while merging foo! (edit, then use \'hg resolve --mark\')\\nunresolved conflicts (see hg resolve, then hg rebase --continue)\\n", \n  "landed": false, \n  "ldap_username": "autolanduser@example.com", \n  "push_bookmark": "", \n  "result": "", \n  "rev": "b28c57a24a9e", \n  "tree": "test-repo", \n  "trysyntax": ""\n}')
+
+  $ mozreview exec autoland hg log /repos/inbound-test-repo/ --template '{rev}:{desc\|firstline}:{phase}\\n'
+  0:Bug 1 - some stuff; r=cthulhu:public
+
+  $ mozreview stop
+  stopped 10 containers

--- a/testing/docker/builder-autoland/clone-repo
+++ b/testing/docker/builder-autoland/clone-repo
@@ -3,16 +3,17 @@
 cd /repos
 hg clone http://hgrb/$1 inbound-$1
 hg clone http://hgrb/$1
 cd /repos/$1
 
 cat > .hg/hgrc << EOF
 [ui]
 username = Otto Land <autoland@example.com>
+merge = internal:merge
 
 [extensions]
 purge =
 rebase =
 rewritecommitdescriptions = /home/ubuntu/version-control-tools/autoland/hgext/rewritecommitdescriptions.py
 strip =
 
 [paths]