--- a/hgext/configwizard/__init__.py
+++ b/hgext/configwizard/__init__.py
@@ -64,28 +64,52 @@ acceptable.
 '''.lstrip()
 
 BAD_DIFF_SETTINGS = '''
 Mercurial is not configured to produce diffs in a more readable format.
 
 Would you like to change this (Yn)? $$ &Yes $$ &No
 '''.strip()
 
+FSMONITOR_INFO = '''
+The fsmonitor extension integrates the watchman filesystem watching tool
+with Mercurial. Commands like `hg status`, `hg diff`, and `hg commit`
+(which need to examine filesystem state) can query watchman to obtain
+this state, allowing these commands to complete much quicker.
+
+When installed, the fsmonitor extension will automatically launch a
+background watchman daemon for accessed Mercurial repositories. It
+should "just work."
+
+Would you like to enable fsmonitor (Yn)? $$ &Yes $$ &No
+'''.strip()
+
+FSMONITOR_NOT_AVAILABLE = '''
+Newer versions of Mercurial have built-in support for integrating with
+filesystem watching services to make common operations faster.
+
+This integration is STRONGLY RECOMMENDED when using the Firefox
+repository.
+
+Please upgrade to Mercurial 3.8+ so this feature is available.
+'''.lstrip()
+
 testedwith = '3.5 3.6 3.7 3.8'
 buglink = 'https://bugzilla.mozilla.org/enter_bug.cgi?product=Developer%20Services&component=General'
 
 cmdtable = {}
 command = cmdutil.command(cmdtable)
 
 wizardsteps = {
     'hgversion',
     'username',
     'diff',
     'color',
     'historyediting',
+    'fsmonitor',
     'configchange',
 }
 
 @command('configwizard', [
     ('s', 'statedir', '', _('directory to store state')),
     ], _('hg configwizard'), optionalrepo=True)
 def configwizard(ui, repo, statedir=None, **opts):
     """Ensure your Mercurial configuration is up to date."""
@@ -116,16 +140,19 @@ def configwizard(ui, repo, statedir=None
         _checkdiffsettings(ui, cw)
 
     if 'color' in runsteps:
         _promptnativeextension(ui, cw, 'color', 'Enable color output to your terminal')
 
     if 'historyediting' in runsteps:
         _checkhistoryediting(ui, cw)
 
+    if 'fsmonitor' in runsteps:
+        _checkfsmonitor(ui, cw, hgversion)
+
     if 'configchange' in runsteps:
         return _handleconfigchange(ui, cw)
 
     return 0
 
 
 def _checkhgversion(ui, hgversion):
     if hgversion >= OLDEST_NON_LEGACY_VERSION:
@@ -200,17 +227,17 @@ def _checkdiffsettings(ui, cw):
         cw.c['diff']['git'] = 'true'
         cw.c['diff']['showfunc'] = 'true'
 
 
 def _promptnativeextension(ui, cw, ext, msg):
     if ui.hasconfig('extensions', ext):
         return
 
-    if not ui.promptchoice('%s (Yn) $$ &Yes $$ &No' % msg):
+    if not uipromptchoice(ui, '%s (Yn) $$ &Yes $$ &No' % msg):
         if 'extensions' not in cw.c:
             cw.c['extensions'] = {}
 
         cw.c['extensions'][ext] = ''
 
 
 def _checkhistoryediting(ui, cw):
     if all(ui.hasconfig('extensions', e) for e in ('histedit', 'rebase')):
@@ -221,16 +248,38 @@ def _checkhistoryediting(ui, cw):
 
     if 'extensions' not in cw.c:
         cw.c['extensions'] = {}
 
     cw.c['extensions']['histedit'] = ''
     cw.c['extensions']['rebase'] = ''
 
 
+def _checkfsmonitor(ui, cw, hgversion):
+    # fsmonitor came into existence in Mercurial 3.8. Before that, it
+    # was the "hgwatchman" extension from a 3rd party repository.
+    # Instead of dealing with installing hgwatchman, we version sniff
+    # and print a message about wanting a more modern Mercurial version.
+
+    if ui.hasconfig('extensions', 'fsmonitor'):
+        try:
+            del cw.c['extensions']['hgwatchman']
+            ui.write('Removing extensions.hgwatchman because fsmonitor is installed\n')
+        except KeyError:
+            pass
+
+        return
+
+    # Mercurial 3.8+ has fsmonitor built-in.
+    if hgversion >= (3, 8, 0):
+        _promptnativeextension(ui, cw, 'fsmonitor', FSMONITOR_INFO)
+    else:
+        ui.write(FSMONITOR_NOT_AVAILABLE)
+
+
 def _handleconfigchange(ui, cw):
     # Obtain the old and new content so we can show a diff.
     newbuf = io.BytesIO()
     cw.write(newbuf)
     newbuf.seek(0)
     newlines = [l.rstrip() for l in newbuf.readlines()]
     oldlines = []
     if os.path.exists(cw.path):

--- a/hgext/configwizard/hgsetup/wizard.py
+++ b/hgext/configwizard/hgsetup/wizard.py
@@ -156,32 +156,16 @@ Example Usage:
 (Not shown are the colors that help denote the state each changeset
 is in.)
 
 (Relevant config options: alias.wip, revsetalias.wip, templates.wip)
 
 Would you like to install the `hg wip` alias?
 '''.strip()
 
-HGWATCHMAN_MINIMUM_VERSION = LooseVersion('3.5.2')
-
-HGWATCHMAN_INFO = '''
-The hgwatchman extension integrates the watchman filesystem watching
-tool with Mercurial. Commands like `hg status`, `hg diff`, and
-`hg commit` that need to examine filesystem state can query watchman
-and obtain filesystem state nearly instantaneously. The result is much
-faster command execution.
-
-When installed, the hgwatchman extension will launch a background
-watchman file watching daemon for accessed Mercurial repositories. It
-should "just work."
-
-Would you like to install hgwatchman
-'''.strip()
-
 FILE_PERMISSIONS_WARNING = '''
 Your hgrc file is currently readable by others.
 
 Sensitive information such as your Bugzilla credentials could be
 stolen if others have access to this file/machine.
 '''.strip()
 
 MULTIPLE_VCT = '''
@@ -218,38 +202,16 @@ class MercurialSetupWizard(object):
 
         hg = get_hg_path()
         config_path = config_file(config_paths)
 
         self.updater.update_all()
 
         hg_version = get_hg_version(hg)
 
-        # hgwatchman is provided by MozillaBuild and we don't yet support
-        # Linux/BSD.
-        if ('hgwatchman' not in c.extensions
-            and sys.platform.startswith('darwin')
-            and hg_version >= HGWATCHMAN_MINIMUM_VERSION
-            and self._prompt_yn(HGWATCHMAN_INFO)):
-            # Unlike other extensions, we need to run an installer
-            # to compile a Python C extension.
-            try:
-                subprocess.check_output(
-                    ['make', 'local'],
-                    cwd=self.updater.hgwatchman_dir,
-                    stderr=subprocess.STDOUT)
-
-                ext_path = os.path.join(self.updater.hgwatchman_dir,
-                                        'hgwatchman')
-                if self.can_use_extension(c, 'hgwatchman', ext_path):
-                    c.activate_extension('hgwatchman', ext_path)
-            except subprocess.CalledProcessError as e:
-                print('Error compiling hgwatchman; will not install hgwatchman')
-                print(e.output)
-
         if 'reviewboard' not in c.extensions:
             if hg_version < REVIEWBOARD_MINIMUM_VERSION:
                 print(REVIEWBOARD_INCOMPATIBLE % REVIEWBOARD_MINIMUM_VERSION)
             else:
                 p = os.path.join(self.vcs_tools_dir, 'hgext', 'reviewboard',
                     'client.py')
                 self.prompt_external_extension(c, 'reviewboard',
                     'Would you like to enable the reviewboard extension so '

new file mode 100644
--- /dev/null
+++ b/hgext/configwizard/tests/test-fsmonitor.t
@@ -0,0 +1,72 @@
+  $ . $TESTDIR/hgext/configwizard/tests/helpers.sh
+
+  $ cat > fakeversion.py << EOF
+  > from mercurial import util
+  > util.version = lambda: '3.8.1'
+  > EOF
+
+Rejecting fsmonitor doesn't enable it
+
+  $ hg --config extensions.fakeversion=fakeversion.py --config ui.interactive=true --config configwizard.steps=fsmonitor,configchange configwizard << EOF
+  > 
+  > n
+  > EOF
+  This wizard will guide you through configuring Mercurial for an optimal
+  experience contributing to Mozilla projects.
+  
+  The wizard makes no changes without your permission.
+  
+  To begin, press the enter/return key.
+   <RETURN>
+  The fsmonitor extension integrates the watchman filesystem watching tool
+  with Mercurial. Commands like `hg status`, `hg diff`, and `hg commit`
+  (which need to examine filesystem state) can query watchman to obtain
+  this state, allowing these commands to complete much quicker.
+  
+  When installed, the fsmonitor extension will automatically launch a
+  background watchman daemon for accessed Mercurial repositories. It
+  should "just work."
+  
+  Would you like to enable fsmonitor (Yn)?  n
+
+#if hg38+
+
+No prompt if extensions already enabled
+
+  $ hg --config configwizard.steps=fsmonitor --config extensions.fsmonitor= configwizard
+
+#endif
+
+fsmonitor enabled when requested
+
+  $ hg --config extensions.fakeversion=fakeversion.py --config configwizard.steps=fsmonitor,configchange configwizard
+  This wizard will guide you through configuring Mercurial for an optimal
+  experience contributing to Mozilla projects.
+  
+  The wizard makes no changes without your permission.
+  
+  To begin, press the enter/return key.
+   <RETURN>
+  The fsmonitor extension integrates the watchman filesystem watching tool
+  with Mercurial. Commands like `hg status`, `hg diff`, and `hg commit`
+  (which need to examine filesystem state) can query watchman to obtain
+  this state, allowing these commands to complete much quicker.
+  
+  When installed, the fsmonitor extension will automatically launch a
+  background watchman daemon for accessed Mercurial repositories. It
+  should "just work."
+  
+  Would you like to enable fsmonitor (Yn)?  y
+  Your config file needs updating.
+  Would you like to see a diff of the changes first (Yn)?  y
+  --- hgrc.old
+  +++ hgrc.new
+  @@ -0,0 +1,2 @@
+  +[extensions]
+  +fsmonitor =
+  
+  Write changes to hgrc file (Yn)?  y
+
+  $ cat .hgrc
+  [extensions]
+  fsmonitor =