diff --git a/extensions/vscode-api-tests/src/singlefolder-tests/chat.runInTerminal.test.ts b/extensions/vscode-api-tests/src/singlefolder-tests/chat.runInTerminal.test.ts
index f3b7f7e9f81..5d9876eccba 100644
--- a/extensions/vscode-api-tests/src/singlefolder-tests/chat.runInTerminal.test.ts
+++ b/extensions/vscode-api-tests/src/singlefolder-tests/chat.runInTerminal.test.ts
@@ -8,6 +8,10 @@ import 'mocha';
 import * as vscode from 'vscode';
 import { DeferredPromise, assertNoRpc, closeAllEditors, disposeAll } from '../utils';
 
+const enum ShellIntegrationTimeoutOverride {
+	DisableForTests = -2
+}
+
 const isWindows = process.platform === 'win32';
 const isMacOS = process.platform === 'darwin';
 const sandboxFileSystemSetting = isMacOS
@@ -162,7 +166,7 @@ function extractTextContent(result: vscode.LanguageModelToolResult): string {
 		setup(async () => {
 			const termConfig = vscode.workspace.getConfiguration('terminal.integrated');
 			await termConfig.update('shellIntegration.enabled', false, vscode.ConfigurationTarget.Global);
-			await termConfig.update('shellIntegration.timeout', 0, vscode.ConfigurationTarget.Global);
+			await termConfig.update('shellIntegration.timeout', ShellIntegrationTimeoutOverride.DisableForTests, vscode.ConfigurationTarget.Global);
 
 			const toolConfig = vscode.workspace.getConfiguration('chat.tools.terminal');
 			await toolConfig.update('idlePollInterval', 100, vscode.ConfigurationTarget.Global);
diff --git a/src/vs/platform/terminal/common/terminal.ts b/src/vs/platform/terminal/common/terminal.ts
index dc7c596c346..e9b50861126 100644
--- a/src/vs/platform/terminal/common/terminal.ts
+++ b/src/vs/platform/terminal/common/terminal.ts
@@ -1060,6 +1060,10 @@ export const enum ShellIntegrationInjectionFailureReason {
 	FailedToCreateTmpDir = 'failedToCreateTmpDir',
 }
 
+export const enum ShellIntegrationTimeoutOverride {
+	DisableForTests = -2
+}
+
 export enum TerminalExitReason {
 	Unknown = 0,
 	Shutdown = 1,
diff --git a/src/vs/workbench/contrib/terminal/common/terminalConfiguration.ts b/src/vs/workbench/contrib/terminal/common/terminalConfiguration.ts
index 6f915a27195..a3453dbac8f 100644
--- a/src/vs/workbench/contrib/terminal/common/terminalConfiguration.ts
+++ b/src/vs/workbench/contrib/terminal/common/terminalConfiguration.ts
@@ -625,7 +625,7 @@ const terminalConfiguration: IStringDictionary<IConfigurationPropertySchema> = {
 	},
 	[TerminalSettingId.ShellIntegrationTimeout]: {
 		restricted: true,
-		markdownDescription: localize('terminal.integrated.shellIntegration.timeout', "Configures the duration in milliseconds to wait for shell integration after launch before declaring it's not there. Set to {0} to skip the wait entirely. The default value {1} uses a variable wait time based on whether shell integration injection is enabled and whether it's a remote window. Values between 1 and 499 are clamped to 500ms. Consider setting this to {0} if you intentionally disabled shell integration, or a large value if your shell starts very slowly.", '`0`', '`-1`'),
+		markdownDescription: localize('terminal.integrated.shellIntegration.timeout', "Configures the duration in milliseconds to wait for shell integration after launch before declaring it's not there. The default value {0} uses a variable wait time based on whether shell integration injection is enabled and whether it's a remote window. Values between 1 and 499 are clamped to 500ms. Consider setting this to a large value if your shell starts very slowly.", '`-1`'),
 		type: 'integer',
 		minimum: -1,
 		maximum: 60000,
diff --git a/src/vs/workbench/contrib/terminal/common/terminalEnvironment.ts b/src/vs/workbench/contrib/terminal/common/terminalEnvironment.ts
index b797a6d549a..7ccbb07819d 100644
--- a/src/vs/workbench/contrib/terminal/common/terminalEnvironment.ts
+++ b/src/vs/workbench/contrib/terminal/common/terminalEnvironment.ts
@@ -12,7 +12,7 @@ import { URI, uriToFsPath } from '../../../../base/common/uri.js';
 import { IWorkspaceContextService, IWorkspaceFolder } from '../../../../platform/workspace/common/workspace.js';
 import { IConfigurationResolverService } from '../../../services/configurationResolver/common/configurationResolver.js';
 import { sanitizeProcessEnvironment } from '../../../../base/common/processes.js';
-import { IShellLaunchConfig, ITerminalBackend, ITerminalEnvironment, TerminalSettingId, TerminalShellType, WindowsShellType } from '../../../../platform/terminal/common/terminal.js';
+import { IShellLaunchConfig, ITerminalBackend, ITerminalEnvironment, ShellIntegrationTimeoutOverride, TerminalSettingId, TerminalShellType, WindowsShellType } from '../../../../platform/terminal/common/terminal.js';
 import { IProcessEnvironment, isWindows, isMacintosh, language, OperatingSystem } from '../../../../base/common/platform.js';
 import { escapeNonWindowsPath, sanitizeCwd } from '../../../../platform/terminal/common/terminalEnvironment.js';
 import { isNumber, isString } from '../../../../base/common/types.js';
@@ -422,8 +422,10 @@ export function getShellIntegrationTimeout(
 ): number {
 	const timeoutValue = configurationService.getValue<unknown>(TerminalSettingId.ShellIntegrationTimeout);
 	let timeoutMs: number;
-
-	if (!isNumber(timeoutValue) || timeoutValue < 0) {
+	if (isNumber(timeoutValue) && timeoutValue === ShellIntegrationTimeoutOverride.DisableForTests) {
+		// Used for tests
+		timeoutMs = 0;
+	} else if (!isNumber(timeoutValue) || timeoutValue < 0) {
 		timeoutMs = siInjectionEnabled ? 5000 : (isRemote ? 3000 : 2000);
 	} else if (timeoutValue === 0) {
 		timeoutMs = 0;
diff --git a/src/vs/workbench/contrib/terminalContrib/chatAgentTools/browser/executeStrategy/noneExecuteStrategy.ts b/src/vs/workbench/contrib/terminalContrib/chatAgentTools/browser/executeStrategy/noneExecuteStrategy.ts
index c1f1b210253..90df302a36a 100644
--- a/src/vs/workbench/contrib/terminalContrib/chatAgentTools/browser/executeStrategy/noneExecuteStrategy.ts
+++ b/src/vs/workbench/contrib/terminalContrib/chatAgentTools/browser/executeStrategy/noneExecuteStrategy.ts
@@ -106,7 +106,7 @@ export class NoneExecuteStrategy extends Disposable implements ITerminalExecuteS
 				});
 
 				const cursorMoveTimeout = new Promise<'timeout'>(resolve => {
-					const handle = setTimeout(() => resolve('timeout'), 5000);
+					const handle = setTimeout(() => resolve('timeout'), 1000);
 					store.add({ dispose: () => clearTimeout(handle) });
 				});