diff --git a/package-lock.json b/package-lock.json
index a5e0ceae70c..69fb02e0fa5 100644
--- a/package-lock.json
+++ b/package-lock.json
@@ -50,7 +50,7 @@
         "minimist": "^1.2.8",
         "native-is-elevated": "0.9.0",
         "native-keymap": "^3.3.5",
-        "node-pty": "^1.2.0-beta.10",
+        "node-pty": "^1.2.0-beta.12",
         "open": "^10.1.2",
         "playwright-core": "1.59.0-alpha-2026-02-20",
         "tas-client": "0.3.1",
@@ -15517,9 +15517,9 @@
       }
     },
     "node_modules/node-pty": {
-      "version": "1.2.0-beta.10",
-      "resolved": "https://registry.npmjs.org/node-pty/-/node-pty-1.2.0-beta.10.tgz",
-      "integrity": "sha512-vONwSCtAiOVNxeaP/lzDdRw733Q6uB/ELOCFM8DUfKMw6rTFovwFCuvqr9usya7JXV2pfaers3EwuzZfv0QtwA==",
+      "version": "1.2.0-beta.12",
+      "resolved": "https://registry.npmjs.org/node-pty/-/node-pty-1.2.0-beta.12.tgz",
+      "integrity": "sha512-uExTCG/4VmSJa4+TjxFwPXv8BfacmfFEBL6JpxCMDghcwqzvD0yTcGmZ1fKOK6HY33tp0CelLblqTECJizc+Yw==",
       "hasInstallScript": true,
       "license": "MIT",
       "dependencies": {
diff --git a/package.json b/package.json
index 4758b5a295c..e661637f12e 100644
--- a/package.json
+++ b/package.json
@@ -120,7 +120,7 @@
     "minimist": "^1.2.8",
     "native-is-elevated": "0.9.0",
     "native-keymap": "^3.3.5",
-    "node-pty": "^1.2.0-beta.10",
+    "node-pty": "^1.2.0-beta.12",
     "open": "^10.1.2",
     "playwright-core": "1.59.0-alpha-2026-02-20",
     "tas-client": "0.3.1",
diff --git a/remote/package-lock.json b/remote/package-lock.json
index fd94c9d768c..042663cb504 100644
--- a/remote/package-lock.json
+++ b/remote/package-lock.json
@@ -39,7 +39,7 @@
         "katex": "^0.16.22",
         "kerberos": "2.1.1",
         "minimist": "^1.2.8",
-        "node-pty": "^1.2.0-beta.10",
+        "node-pty": "^1.2.0-beta.12",
         "tas-client": "0.3.1",
         "vscode-oniguruma": "1.7.0",
         "vscode-regexpp": "^3.1.0",
@@ -1112,9 +1112,9 @@
       }
     },
     "node_modules/node-pty": {
-      "version": "1.2.0-beta.10",
-      "resolved": "https://registry.npmjs.org/node-pty/-/node-pty-1.2.0-beta.10.tgz",
-      "integrity": "sha512-vONwSCtAiOVNxeaP/lzDdRw733Q6uB/ELOCFM8DUfKMw6rTFovwFCuvqr9usya7JXV2pfaers3EwuzZfv0QtwA==",
+      "version": "1.2.0-beta.12",
+      "resolved": "https://registry.npmjs.org/node-pty/-/node-pty-1.2.0-beta.12.tgz",
+      "integrity": "sha512-uExTCG/4VmSJa4+TjxFwPXv8BfacmfFEBL6JpxCMDghcwqzvD0yTcGmZ1fKOK6HY33tp0CelLblqTECJizc+Yw==",
       "hasInstallScript": true,
       "license": "MIT",
       "dependencies": {
diff --git a/remote/package.json b/remote/package.json
index ec73a84fff0..1b602b7f96f 100644
--- a/remote/package.json
+++ b/remote/package.json
@@ -34,7 +34,7 @@
     "katex": "^0.16.22",
     "kerberos": "2.1.1",
     "minimist": "^1.2.8",
-    "node-pty": "^1.2.0-beta.10",
+    "node-pty": "^1.2.0-beta.12",
     "tas-client": "0.3.1",
     "vscode-oniguruma": "1.7.0",
     "vscode-regexpp": "^3.1.0",
diff --git a/src/vs/platform/terminal/node/childProcessMonitor.ts b/src/vs/platform/terminal/node/childProcessMonitor.ts
index 40ac2d23050..2b9bdfb2e5b 100644
--- a/src/vs/platform/terminal/node/childProcessMonitor.ts
+++ b/src/vs/platform/terminal/node/childProcessMonitor.ts
@@ -49,12 +49,20 @@ export class ChildProcessMonitor extends Disposable {
 	readonly onDidChangeHasChildProcesses = this._onDidChangeHasChildProcesses.event;
 
 	constructor(
-		private readonly _pid: number,
+		private _pid: number,
 		@ILogService private readonly _logService: ILogService
 	) {
 		super();
 	}
 
+	/**
+	 * Updates the pid to monitor. This is needed when the pid is not available
+	 * immediately after spawn (e.g. node-pty deferred conpty connection).
+	 */
+	setPid(pid: number): void {
+		this._pid = pid;
+	}
+
 	/**
 	 * Input was triggered on the process.
 	 */
diff --git a/src/vs/platform/terminal/node/terminalProcess.ts b/src/vs/platform/terminal/node/terminalProcess.ts
index 60563ff6487..e9f3a01b4f9 100644
--- a/src/vs/platform/terminal/node/terminalProcess.ts
+++ b/src/vs/platform/terminal/node/terminalProcess.ts
@@ -337,7 +337,20 @@ export class TerminalProcess extends Disposable implements ITerminalChildProcess
 			this._exitCode = e.exitCode;
 			this._queueProcessExit();
 		}));
-		this._sendProcessId(ptyProcess.pid);
+		// node-pty >= 1.2.0-beta.11 defers conptyNative.connect() on Windows, so
+		// ptyProcess.pid may be 0 immediately after spawn. In that case we wait
+		// for the first data event which only fires after the connection completes
+		// and the real pid is available. See microsoft/node-pty#885.
+		if (ptyProcess.pid > 0) {
+			this._sendProcessId(ptyProcess.pid);
+		} else {
+			const dataListener = ptyProcess.onData(() => {
+				dataListener.dispose();
+				this._childProcessMonitor?.setPid(ptyProcess.pid);
+				this._sendProcessId(ptyProcess.pid);
+			});
+			this._register(dataListener);
+		}
 		this._setupTitlePolling(ptyProcess);
 	}
 
diff --git a/src/vs/workbench/contrib/terminal/common/terminalConfiguration.ts b/src/vs/workbench/contrib/terminal/common/terminalConfiguration.ts
index 132db6d2982..ab230b025f6 100644
--- a/src/vs/workbench/contrib/terminal/common/terminalConfiguration.ts
+++ b/src/vs/workbench/contrib/terminal/common/terminalConfiguration.ts
@@ -476,7 +476,7 @@ const terminalConfiguration: IStringDictionary<IConfigurationPropertySchema> = {
 	},
 	[TerminalSettingId.WindowsUseConptyDll]: {
 		restricted: true,
-		markdownDescription: localize('terminal.integrated.windowsUseConptyDll', "Whether to use the experimental conpty.dll (v1.23.251008001) shipped with VS Code, instead of the one bundled with Windows."),
+		markdownDescription: localize('terminal.integrated.windowsUseConptyDll', "Whether to use the experimental conpty.dll (v1.25.260303002) shipped with VS Code, instead of the one bundled with Windows."),
 		type: 'boolean',
 		tags: ['preview'],
 		default: false,