diff --git a/functest/run.sh b/functest/run.sh
index ea81b6038..1a3fd5e10 100755
--- a/functest/run.sh
+++ b/functest/run.sh
@@ -8,7 +8,6 @@ TESTS+=" test-init.sh"
 TESTS+=" test-add-remove.sh"
 TESTS+=" test-sync.sh"
 TESTS+=" test-repro-code.sh"
-#TESTS+=" test-merge.sh"
 TESTS+=" test-checkout.sh"
 TESTS+=" test-gc.sh"
 TESTS+=" test-lock.sh"
@@ -19,4 +18,4 @@ for t in $TESTS; do
 	./$t
 done
 
-#rm -rf $TEST_REPO
+rm -rf $TEST_REPO
diff --git a/functest/test-merge.sh b/functest/test-merge.sh
deleted file mode 100755
index 21b01d991..000000000
--- a/functest/test-merge.sh
+++ /dev/null
@@ -1,57 +0,0 @@
-#!/bin/bash
-
-set -e
-
-source common.sh
-
-dvc_create_repo
-
-# Adding changes to the first branch
-git checkout -b foo
-cp code/code.sh code/code1.sh
-chmod +x code/code1.sh
-cp code/code1.sh code/code2.sh
-cp code/code1.sh code/code3.sh
-cp code/code1.sh code/code4.sh
-git add code
-git commit -s -m"add code"
-
-cp $DATA_CACHE/foo data/data
-dvc add data/data
-
-ORIG_DATA=$(dvc_md5 data/data)
-
-dvc run -f copy_data_data1.dvc -d code/code1.sh -d data/data -o data/data1 ./code/code1.sh data/data data/data1
-dvc run -f copy_data1_data2.dvc -d code/code2.sh -d data/data1 -o data/data2 ./code/code2.sh data/data1 data/data2
-dvc run -f copy_data2_data3.dvc -d code/code3.sh -d data/data2 -o data/data3 ./code/code3.sh data/data2 data/data3
-dvc run -f copy_data3_data4.dvc -d code/code4.sh -d data/data3 -o data/data4 ./code/code4.sh data/data3 data/data4
-
-dvc config Global.Target data/data4
-git commit -am 'Set Target'
-
-# Create new branch to work on small data set
-git checkout -b bar
-dvc remove -c -l data/data
-cp $DATA_CACHE/bar data/data
-dvc add data/data
-dvc repro
-
-echo -e "\n\n\n\n" >> code/code1.sh
-git commit -am"change code1.sh"
-dvc repro
-
-# Merge bar into foo
-git checkout foo
-git merge bar
-# Notice we're running 'dvc merge' on foo branch. This
-# way dvc knows to favor data files from current branch.
-dvc merge
-
-# Verify that data and respective cache state file are restored properly
-if [ "$(dvc_md5 data/data)" != "$ORIG_DATA" ]; then
-	dvc_fail
-fi
-
-grep $(echo "$ORIG_DATA" | cut -d " " -f1) data/data.dvc || dvc_fail
-
-dvc_pass