diff --git a/src/vs/workbench/api/node/extHostTerminalService.ts b/src/vs/workbench/api/node/extHostTerminalService.ts
index d89750cfdf1..a8452cf27ee 100644
--- a/src/vs/workbench/api/node/extHostTerminalService.ts
+++ b/src/vs/workbench/api/node/extHostTerminalService.ts
@@ -156,7 +156,7 @@ export class ExtHostTerminalService extends BaseExtHostTerminalService {
 		}
 
 		const activeWorkspaceRootUri = URI.revive(activeWorkspaceRootUriComponents);
-		let lastActiveWorkspace: IWorkspaceFolder | null = null;
+		let lastActiveWorkspace: IWorkspaceFolder | undefined;
 		if (activeWorkspaceRootUriComponents && activeWorkspaceRootUri) {
 			// Get the environment
 			const apiLastActiveWorkspace = await this._extHostWorkspace.getWorkspaceFolder(activeWorkspaceRootUri);
@@ -175,7 +175,7 @@ export class ExtHostTerminalService extends BaseExtHostTerminalService {
 		// Get the initial cwd
 		const terminalConfig = configProvider.getConfiguration('terminal.integrated');
 
-		const initialCwd = terminalEnvironment.getCwd(shellLaunchConfig, os.homedir(), lastActiveWorkspace ? lastActiveWorkspace : undefined, this._variableResolver, activeWorkspaceRootUri, terminalConfig.cwd, this._logService);
+		const initialCwd = terminalEnvironment.getCwd(shellLaunchConfig, os.homedir(), lastActiveWorkspace, this._variableResolver, activeWorkspaceRootUri, terminalConfig.cwd, this._logService);
 		shellLaunchConfig.cwd = initialCwd;
 
 		const envFromConfig = this._apiInspectConfigToPlain(configProvider.getConfiguration('terminal.integrated').inspect<ITerminalEnvironment>(`env.${platformKey}`));
diff --git a/src/vs/workbench/contrib/terminal/browser/terminalProcessManager.ts b/src/vs/workbench/contrib/terminal/browser/terminalProcessManager.ts
index f5e97f7d320..4fe0fa28274 100644
--- a/src/vs/workbench/contrib/terminal/browser/terminalProcessManager.ts
+++ b/src/vs/workbench/contrib/terminal/browser/terminalProcessManager.ts
@@ -22,6 +22,7 @@ import { ITerminalInstanceService } from 'vs/workbench/contrib/terminal/browser/
 import { IConfigurationService } from 'vs/platform/configuration/common/configuration';
 import { IRemoteAgentService } from 'vs/workbench/services/remote/common/remoteAgentService';
 import { Disposable } from 'vs/base/common/lifecycle';
+import { withNullAsUndefined } from 'vs/base/common/types';
 
 /** The amount of time to consider terminal errors to be related to the launch */
 const LAUNCHING_DURATION = 500;
@@ -201,22 +202,22 @@ export class TerminalProcessManager extends Disposable implements ITerminalProce
 	): Promise<ITerminalChildProcess> {
 		const activeWorkspaceRootUri = this._historyService.getLastActiveWorkspaceRoot(Schemas.file);
 		const platformKey = platform.isWindows ? 'windows' : (platform.isMacintosh ? 'osx' : 'linux');
-		const lastActiveWorkspace = activeWorkspaceRootUri ? this._workspaceContextService.getWorkspaceFolder(activeWorkspaceRootUri) : null;
+		const lastActiveWorkspace = activeWorkspaceRootUri ? withNullAsUndefined(this._workspaceContextService.getWorkspaceFolder(activeWorkspaceRootUri)) : undefined;
 		if (!shellLaunchConfig.executable) {
 			const defaultConfig = await this._terminalInstanceService.getDefaultShellAndArgs(false);
 			shellLaunchConfig.executable = defaultConfig.shell;
 			shellLaunchConfig.args = defaultConfig.args;
 		} else {
-			shellLaunchConfig.executable = this._configurationResolverService.resolve(lastActiveWorkspace === null ? undefined : lastActiveWorkspace, shellLaunchConfig.executable);
+			shellLaunchConfig.executable = this._configurationResolverService.resolve(lastActiveWorkspace, shellLaunchConfig.executable);
 			if (shellLaunchConfig.args) {
 				if (Array.isArray(shellLaunchConfig.args)) {
 					const resolvedArgs: string[] = [];
 					for (const arg of shellLaunchConfig.args) {
-						resolvedArgs.push(this._configurationResolverService.resolve(lastActiveWorkspace === null ? undefined : lastActiveWorkspace, arg));
+						resolvedArgs.push(this._configurationResolverService.resolve(lastActiveWorkspace, arg));
 					}
 					shellLaunchConfig.args = resolvedArgs;
 				} else {
-					shellLaunchConfig.args = this._configurationResolverService.resolve(lastActiveWorkspace === null ? undefined : lastActiveWorkspace, shellLaunchConfig.args);
+					shellLaunchConfig.args = this._configurationResolverService.resolve(lastActiveWorkspace, shellLaunchConfig.args);
 				}
 			}
 		}
@@ -224,7 +225,7 @@ export class TerminalProcessManager extends Disposable implements ITerminalProce
 		const initialCwd = terminalEnvironment.getCwd(
 			shellLaunchConfig,
 			this._environmentService.userHome,
-			lastActiveWorkspace ? lastActiveWorkspace : undefined,
+			lastActiveWorkspace,
 			this._configurationResolverService,
 			activeWorkspaceRootUri,
 			this._configHelper.config.cwd,
diff --git a/src/vs/workbench/contrib/terminal/common/terminalEnvironment.ts b/src/vs/workbench/contrib/terminal/common/terminalEnvironment.ts
index ae02eb5e0c7..cdf56ae60a2 100644
--- a/src/vs/workbench/contrib/terminal/common/terminalEnvironment.ts
+++ b/src/vs/workbench/contrib/terminal/common/terminalEnvironment.ts
@@ -11,7 +11,6 @@ import { IShellLaunchConfig, ITerminalEnvironment } from 'vs/workbench/contrib/t
 import { IConfigurationResolverService } from 'vs/workbench/services/configurationResolver/common/configurationResolver';
 import { sanitizeProcessEnvironment } from 'vs/base/common/processes';
 import { ILogService } from 'vs/platform/log/common/log';
-import { withNullAsUndefined } from 'vs/base/common/types';
 
 /**
  * This module contains utility functions related to the environment, cwd and paths.
@@ -75,12 +74,12 @@ function mergeNonNullKeys(env: platform.IProcessEnvironment, other: ITerminalEnv
 	}
 }
 
-function resolveConfigurationVariables(configurationResolverService: IConfigurationResolverService, env: ITerminalEnvironment, lastActiveWorkspaceRoot: IWorkspaceFolder | null): ITerminalEnvironment {
+function resolveConfigurationVariables(configurationResolverService: IConfigurationResolverService, env: ITerminalEnvironment, lastActiveWorkspaceRoot: IWorkspaceFolder | undefined): ITerminalEnvironment {
 	Object.keys(env).forEach((key) => {
 		const value = env[key];
 		if (typeof value === 'string') {
 			try {
-				env[key] = configurationResolverService.resolve(withNullAsUndefined(lastActiveWorkspaceRoot), value);
+				env[key] = configurationResolverService.resolve(lastActiveWorkspaceRoot, value);
 			} catch (e) {
 				env[key] = value;
 			}
@@ -339,7 +338,7 @@ function getShellSetting(
 
 export function createTerminalEnvironment(
 	shellLaunchConfig: IShellLaunchConfig,
-	lastActiveWorkspace: IWorkspaceFolder | null,
+	lastActiveWorkspace: IWorkspaceFolder | undefined,
 	envFromConfig: { user: ITerminalEnvironment | undefined, value: ITerminalEnvironment | undefined, default: ITerminalEnvironment | undefined },
 	configurationResolverService: IConfigurationResolverService | undefined,
 	isWorkspaceShellAllowed: boolean,