diff --git a/pkgs/development/python-modules/hg-git/default.nix b/pkgs/development/python-modules/hg-git/default.nix
index 2b32afc2f82..452b946a042 100644
--- a/pkgs/development/python-modules/hg-git/default.nix
+++ b/pkgs/development/python-modules/hg-git/default.nix
@@ -3,20 +3,29 @@
 , fetchPypi
 , dulwich
 , isPy3k
+, fetchpatch
 }:
 
 buildPythonPackage rec {
   pname = "hg-git";
-  version = "0.8.11";
+  version = "0.8.12";
   disabled = isPy3k;
 
   src = fetchPypi {
     inherit pname version;
-    sha256 = "08kw1sj3sq1q1571hwkc51w20ks9ysmlg93pcnmd6gr66bz02dyn";
+    sha256 = "13hbm0ki6s88r6p65ibvrbxnskinzdz0m9gsshb8s571p91ymfjn";
   };
 
   propagatedBuildInputs = [ dulwich ];
 
+  # Needs patch to work with Mercurial 4.8
+  # https://bitbucket.org/durin42/hg-git/issues/264/unexpected-keyword-argument-createopts-hg
+  patches =
+    fetchpatch {
+      url = "https://bitbucket.org/rsalmaso/hg-git/commits/a778506fd4be0bf1afa75755f6ee9260fa234a0f/raw";
+      sha256 = "12r4qzbc5xcqwv0kvf8g4wjji7n45421zkbf6i75vyi4nl6n4j15";
+    };
+
   meta = with stdenv.lib; {
     description = "Push and pull from a Git server using Mercurial";
     homepage = http://hg-git.github.com/;