diff --git a/swh/loader/mercurial/from_disk.py b/swh/loader/mercurial/from_disk.py
--- a/swh/loader/mercurial/from_disk.py
+++ b/swh/loader/mercurial/from_disk.py
@@ -71,7 +71,11 @@
 
 
 class HgDirectory(Directory):
-    """A directory that creates parent directories if missing."""
+    """A more practical directory.
+
+    - creates missing parent directories
+    - removes empty directories
+    """
 
     def __setitem__(self, path: bytes, value: Union[Content, "HgDirectory"]) -> None:
         if b"/" in path:
@@ -86,6 +90,14 @@
         else:
             super().__setitem__(path, value)
 
+    def __delitem__(self, path: bytes) -> None:
+        super().__delitem__(path)
+
+        while b"/" in path:  # remove empty parent directories
+            path = path.rsplit(b"/", 1)[0]
+            if len(self[path]) == 0:
+                super().__delitem__(path)
+
 
 class HgLoaderFromDisk(BaseLoader):
     """Load a mercurial repository from a local repository."""
@@ -124,6 +136,15 @@
         self._repo: Optional[hgutil.Repository] = None
         self._revision_nodeid_to_swhid: Dict[HgNodeId, Sha1Git] = {}
 
+        # keeps the last processed hg nodeid
+        # it is used for differential tree update by store_directories
+        # NULLID is the parent of the first revision
+        self._last_hg_nodeid = hgutil.NULLID
+
+        # keeps the last revision tree
+        # it is used for differential tree update by store_directories
+        self._last_root = HgDirectory()
+
         # Cache the content hash across revisions to avoid recalculation.
         self._content_hash_cache: hgutil.LRUCacheDict = hgutil.LRUCacheDict(
             self.config["content_cache_size"],
@@ -417,12 +438,25 @@
         Returns:
             the swhid of the top level directory.
         """
-        root = HgDirectory()
-        for file_path in rev_ctx.manifest():
+        prev_ctx = self.repo[self._last_hg_nodeid]
+
+        # TODO maybe do diff on parents
+        status = prev_ctx.status(rev_ctx)
+
+        for file_path in status.removed:
+            del self._last_root[file_path]
+
+        for file_path in status.added:
             content = self.store_content(rev_ctx, file_path)
-            root[file_path] = content
+            self._last_root[file_path] = content
+
+        for file_path in status.modified:
+            content = self.store_content(rev_ctx, file_path)
+            self._last_root[file_path] = content
+
+        self._last_hg_nodeid = rev_ctx.node()
 
-        directories: Deque[Directory] = deque([root])
+        directories: Deque[Directory] = deque([self._last_root])
         while directories:
             directory = directories.pop()
             self.storage.directory_add([directory.to_model()])
@@ -430,7 +464,7 @@
                 [item for item in directory.values() if isinstance(item, Directory)]
             )
 
-        return root.hash
+        return self._last_root.hash
 
 
 class HgArchiveLoaderFromDisk(HgLoaderFromDisk):
diff --git a/swh/loader/mercurial/tests/test_from_disk.py b/swh/loader/mercurial/tests/test_from_disk.py
--- a/swh/loader/mercurial/tests/test_from_disk.py
+++ b/swh/loader/mercurial/tests/test_from_disk.py
@@ -25,6 +25,16 @@
     directory[b"path/to/some/content"] = Content()
 
 
+def test_hg_directory_deletes_empty_directories():
+    directory = HgDirectory()
+    directory[b"path/to/content"] = Content()
+    directory[b"path/to/some/content"] = Content()
+
+    del directory[b"path/to/some/content"]
+
+    assert len(directory) == 1
+
+
 # Those tests assert expectations on repository loading
 # by reading expected values from associated json files
 # produced by the `swh-hg-identify` command line utility.