diff --git a/extensions/vscode-api-tests/src/singlefolder-tests/terminal.test.ts b/extensions/vscode-api-tests/src/singlefolder-tests/terminal.test.ts
index ee5f7505d6c..dc281a06fd5 100644
--- a/extensions/vscode-api-tests/src/singlefolder-tests/terminal.test.ts
+++ b/extensions/vscode-api-tests/src/singlefolder-tests/terminal.test.ts
@@ -266,8 +266,8 @@ suite('window namespace tests', () => {
 				});
 				const pty: Pseudoterminal = {
 					onDidWrite: new EventEmitter<string>().event,
-					start: () => {},
-					shutdown: () => {}
+					open: () => {},
+					close: () => {}
 				};
 				window.createTerminal({ name: 'c', pty });
 			});
@@ -293,8 +293,8 @@ suite('window namespace tests', () => {
 				const writeEmitter = new EventEmitter<string>();
 				const pty: Pseudoterminal = {
 					onDidWrite: writeEmitter.event,
-					start: () => startResolve(),
-					shutdown: () => {}
+					open: () => startResolve(),
+					close: () => {}
 				};
 				const terminal = window.createTerminal({ name: 'foo', pty });
 			});
@@ -306,7 +306,7 @@ suite('window namespace tests', () => {
 				});
 				const pty: Pseudoterminal = {
 					onDidWrite: new EventEmitter<string>().event,
-					start: (dimensions) => {
+					open: (dimensions) => {
 						ok(dimensions!.columns > 0);
 						ok(dimensions!.rows > 0);
 						const reg3 = window.onDidCloseTerminal(() => {
@@ -315,7 +315,7 @@ suite('window namespace tests', () => {
 						});
 						terminal.dispose();
 					},
-					shutdown: () => {}
+					close: () => {}
 				};
 				const terminal = window.createTerminal({ name: 'foo', pty });
 			});
@@ -343,8 +343,8 @@ suite('window namespace tests', () => {
 				const pty: Pseudoterminal = {
 					onDidWrite: writeEmitter.event,
 					onDidOverrideDimensions: overrideDimensionsEmitter.event,
-					start: () => {},
-					shutdown: () => {}
+					open: () => {},
+					close: () => {}
 				};
 				const terminal = window.createTerminal({ name: 'foo', pty });
 			});
diff --git a/extensions/vscode-api-tests/src/singlefolder-tests/workspace.tasks.test.ts b/extensions/vscode-api-tests/src/singlefolder-tests/workspace.tasks.test.ts
index 56559d6aacc..daef120762c 100644
--- a/extensions/vscode-api-tests/src/singlefolder-tests/workspace.tasks.test.ts
+++ b/extensions/vscode-api-tests/src/singlefolder-tests/workspace.tasks.test.ts
@@ -36,16 +36,17 @@ suite('workspace-namespace', () => {
 					};
 					const writeEmitter = new vscode.EventEmitter<string>();
 					const execution = new vscode.CustomExecution2((): Thenable<vscode.Pseudoterminal> => {
-						return Promise.resolve(<vscode.Pseudoterminal>{
+						const pty: vscode.Pseudoterminal = {
 							onDidWrite: writeEmitter.event,
-							start: () => {
+							open: () => {
 								writeEmitter.fire('testing\r\n');
 							},
-							shutdown: () => {
+							close: () => {
 								taskProvider.dispose();
 								done();
 							}
-						});
+						};
+						return Promise.resolve(pty);
 					});
 					const task = new vscode.Task2(kind, vscode.TaskScope.Workspace, taskName, taskType, execution);
 					result.push(task);
diff --git a/src/vs/vscode.proposed.d.ts b/src/vs/vscode.proposed.d.ts
index 198c96af53c..8eac40ea882 100644
--- a/src/vs/vscode.proposed.d.ts
+++ b/src/vs/vscode.proposed.d.ts
@@ -968,8 +968,8 @@ declare module 'vscode' {
 		 * const writeEmitter = new vscode.EventEmitter<string>();
 		 * const pty: vscode.Pseudoterminal = {
 		 *   onDidWrite: writeEmitter.event,
-		 *   start: () => writeEmitter.fire('\x1b[31mHello world\x1b[0m'),
-		 *   shutdown: () => {}
+		 *   open: () => writeEmitter.fire('\x1b[31mHello world\x1b[0m'),
+		 *   close: () => {}
 		 * };
 		 * vscode.window.createTerminal({ name: 'My terminal', pty });
 		 * ```
@@ -994,13 +994,13 @@ declare module 'vscode' {
 		 * const pty: vscode.Pseudoterminal = {
 		 *   onDidWrite: writeEmitter.event,
 		 *   onDidOverrideDimensions: dimensionsEmitter.event,
-		 *   start: () => {
+		 *   open: () => {
 		 *       dimensionsEmitter.fire({
 		 *       columns: 20,
 		 *       rows: 10
 		 *     });
 		 *   },
-		 *   shutdown: () => {}
+		 *   close: () => {}
 		 * };
 		 * vscode.window.createTerminal({ name: 'My terminal', pty });
 		 * ```
@@ -1008,37 +1008,40 @@ declare module 'vscode' {
 		onDidOverrideDimensions?: Event<TerminalDimensions | undefined>;
 
 		/**
-		 * An event that when fired will exit the process with an exit code, this will behave the
-		 * same for an extension treminal as when a regular process exits with an exit code. Note
-		 * that exit codes must be positive numbers, when negative the exit code will be forced to
-		 * `1`.
+		 * An event that when fired will signal that the pty is closed and dispose of the terminal.
 		 *
-		 * **Example:** Exit with an exit code of `0` if the y key is pressed, otherwise `1`.
+		 * **Example:** Exit the terminal when "y" is pressed, otherwise show a notification.
 		 * ```typescript
 		 * const writeEmitter = new vscode.EventEmitter<string>();
-		 * const exitEmitter = new vscode.EventEmitter<number>();
+		 * const closeEmitter = new vscode.EventEmitter<number>();
 		 * const pty: vscode.Pseudoterminal = {
 		 *   onDidWrite: writeEmitter.event,
-		 *   start: () => writeEmitter.fire('Press y to exit successfully'),
-		 *   shutdown: () => {}
-		 *   handleInput: data => exitEmitter.fire(data === 'y' ? 0 : 1)
+		 *   onDidClose: closeEmitter.event,
+		 *   open: () => writeEmitter.fire('Press y to exit successfully'),
+		 *   close: () => {}
+		 *   handleInput: {
+		 *     if (data !== 'y') {
+		 *       vscode.window.showInformationMessage('Something went wrong');
+		 *     }
+		 *     data => closeEmitter.fire();
+		 *   }
 		 * };
 		 * vscode.window.createTerminal({ name: 'Exit example', pty });
 		 */
-		onDidExit?: Event<number>;
+		onDidClose?: Event<void>;
 
 		/**
-		 * Implement to handle when the pty is ready to start firing events.
+		 * Implement to handle when the pty is open and ready to start firing events.
 		 *
 		 * @param initialDimensions The dimensions of the terminal, this will be undefined if the
 		 * terminal panel has not been opened before this is called.
 		 */
-		start(initialDimensions: TerminalDimensions | undefined): void;
+		open(initialDimensions: TerminalDimensions | undefined): void;
 
 		/**
-		 * Implement to handle when the terminal shuts down by an act of the user.
+		 * Implement to handle when the terminal is closed by an act of the user.
 		 */
-		shutdown(): void;
+		close(): void;
 
 		/**
 		 * Implement to handle incoming keystrokes in the terminal or when an extension calls
@@ -1053,8 +1056,8 @@ declare module 'vscode' {
 		 * const writeEmitter = new vscode.EventEmitter<string>();
 		 * const pty: vscode.Pseudoterminal = {
 		 *   onDidWrite: writeEmitter.event,
-		 *   start: () => {},
-		 *   shutdown: () => {},
+		 *   open: () => {},
+		 *   close: () => {},
 		 *   handleInput: data => writeEmitter.fire(data === '\r' ? '\r\n' : data)
 		 * };
 		 * vscode.window.createTerminal({ name: 'Local echo', pty });
@@ -1184,9 +1187,8 @@ declare module 'vscode' {
 
 		/**
 		 * The callback used to execute the task. Cancellation should be handled using
-		 * [Pseudoterminal.shutdown](#Pseudoterminal.shutdown). When the task is complete,
-		 * [Pseudoterminal.onDidExit](#Pseudoterminal.onDidExit) should be fired with the exit code
-		 * with '0' for success and a non-zero value for failure.
+		 * [Pseudoterminal.close](#Pseudoterminal.close). When the task is complete fire
+		 * [Pseudoterminal.onDidClose](#Pseudoterminal.onDidClose).
 		 */
 		callback: (thisArg?: any) => Thenable<Pseudoterminal>;
 	}
diff --git a/src/vs/workbench/api/node/extHostTerminalService.ts b/src/vs/workbench/api/node/extHostTerminalService.ts
index 7b5df64321c..c42c0736bb7 100644
--- a/src/vs/workbench/api/node/extHostTerminalService.ts
+++ b/src/vs/workbench/api/node/extHostTerminalService.ts
@@ -793,8 +793,8 @@ class ExtHostPseudoterminal implements ITerminalChildProcess {
 	) {
 		this._queueDisposables = [];
 		this._queueDisposables.push(this._pty.onDidWrite(e => this._queuedEvents.push({ emitter: this._onProcessData, data: e })));
-		if (this._pty.onDidExit) {
-			this._queueDisposables.push(this._pty.onDidExit(e => this._queuedEvents.push({ emitter: this._onProcessExit, data: e })));
+		if (this._pty.onDidClose) {
+			this._queueDisposables.push(this._pty.onDidClose(e => this._queuedEvents.push({ emitter: this._onProcessExit, data: 0 })));
 		}
 		if (this._pty.onDidOverrideDimensions) {
 			this._queueDisposables.push(this._pty.onDidOverrideDimensions(e => this._queuedEvents.push({ emitter: this._onProcessOverrideDimensions, data: e ? { cols: e.columns, rows: e.rows } : undefined })));
@@ -802,8 +802,8 @@ class ExtHostPseudoterminal implements ITerminalChildProcess {
 	}
 
 	shutdown(): void {
-		if (this._pty.shutdown) {
-			this._pty.shutdown();
+		if (this._pty.close) {
+			this._pty.close();
 		}
 	}
 
@@ -839,18 +839,15 @@ class ExtHostPseudoterminal implements ITerminalChildProcess {
 
 		// Attach the real listeners
 		this._pty.onDidWrite(e => this._onProcessData.fire(e));
-		if (this._pty.onDidExit) {
-			this._pty.onDidExit(e => {
-				// Ensure only positive exit codes are returned
-				this._onProcessExit.fire(e >= 0 ? e : 1);
-			});
+		if (this._pty.onDidClose) {
+			this._pty.onDidClose(e => this._onProcessExit.fire(0));
 		}
 		if (this._pty.onDidOverrideDimensions) {
 			this._pty.onDidOverrideDimensions(e => this._onProcessOverrideDimensions.fire(e ? { cols: e.columns, rows: e.rows } : e));
 		}
 
-		if (this._pty.start) {
-			this._pty.start(initialDimensions);
+		if (this._pty.open) {
+			this._pty.open(initialDimensions);
 		}
 	}
 }