diff --git a/pkgs/applications/version-management/mercurial/default.nix b/pkgs/applications/version-management/mercurial/default.nix
index 408c9d8ebac..7ba7262f720 100644
--- a/pkgs/applications/version-management/mercurial/default.nix
+++ b/pkgs/applications/version-management/mercurial/default.nix
@@ -1,23 +1,40 @@
 args: with args;
 
 stdenv.mkDerivation {
-  name = "mercurial-0.9.5";
+  name = "mercurial-1.0.2";
   src = fetchurl {
-    url = http://www.selenic.com/mercurial/release/mercurial-0.9.5.tar.gz;
-    sha256 = "1n34yl4z7nc3vmsgpkmqc94hsmy846ny86xgpgv3m371ljm2pq6g";
+    url = http://www.selenic.com/mercurial/release/mercurial-1.0.2.tar.gz;
+    sha256 = "0fj2aakband855684q76h7zl328iq8i6l81c2k64hy5m0if9hvgr";
   };
 
   buildInputs = [ python makeWrapper ];
   makeFlags = "PREFIX=$(out)";
-  postInstall = ''
-    for i in $(cd $out/bin && ls); do
-      wrapProgram $out/bin/$i \
-        --prefix PYTHONPATH : "$(toPythonPath $out)"
-    done
-  '';
+  postInstall = (if args.guiSupport then
+    ''
+      ensureDir $out/etc/mercurial
+      cp contrib/hgk $out/bin
+      cat >> $out/etc/mercurial/hgrc << EOF
+      [extensions]
+      hgk=$out/lib/python2.5/site-packages/hgext/hgk.py
+      EOF
+      # setting HG so that hgk can be run itself as well (not only hg view)
+      WRAP_TK=" --set TK_LIBRARY \"${tk}/lib/tk8.4\"
+                --set HG \"$out/bin/hg\"
+                --prefix PATH : \"${tk}/bin\" "
+    ''
+    else "")
+    +
+    ''
+      for i in $(cd $out/bin && ls); do
+        wrapProgram $out/bin/$i \
+          --prefix PYTHONPATH : "$(toPythonPath $out)" \
+          $WRAP_TK
+      done
+    '';
 
   meta = {
     description = "A fast, lightweight SCM system for very large distributed projects";
     homepage = http://www.selenic.com/mercurial/;
+    license = "GPLv2";
   };
 }
diff --git a/pkgs/top-level/all-packages.nix b/pkgs/top-level/all-packages.nix
index a1d72b34dd4..42f8a8557c5 100644
--- a/pkgs/top-level/all-packages.nix
+++ b/pkgs/top-level/all-packages.nix
@@ -6888,7 +6888,8 @@ let
   };
 
   mercurial = import ../applications/version-management/mercurial {
-    inherit fetchurl stdenv python makeWrapper;
+    inherit fetchurl stdenv python makeWrapper getConfig tk;
+    guiSupport = getConfig ["mercurial" "guiSupport"] false; # for hgk (gitk gui for hg)
   };
 
   midori = builderDefsPackage (import ../applications/networking/browsers/midori) {