--- a/mercurial/hg.py
+++ b/mercurial/hg.py
@@ -54,6 +54,7 @@ repo_setup_hooks = []
 def repository(ui, path='', create=False):
     """return a repository object for the specified path"""
     repo = _lookup(path).instance(ui, path, create)
+    ui = getattr(repo, "ui", ui)
     for hook in repo_setup_hooks:
         hook(ui, repo)
     return repo