diff --git a/src/vs/platform/terminal/common/terminal.ts b/src/vs/platform/terminal/common/terminal.ts
index ee81e6ba5b4..54efdbe2c13 100644
--- a/src/vs/platform/terminal/common/terminal.ts
+++ b/src/vs/platform/terminal/common/terminal.ts
@@ -229,6 +229,11 @@ export interface IShellLaunchConfig {
 	 * Whether flow control is enabled for this terminal.
 	 */
 	flowControl?: boolean;
+
+	/**
+	 * Whether this terminal was created by an extension.
+	 */
+	isExtensionOwnedTerminal?: boolean;
 }
 
 export interface ITerminalEnvironment {
diff --git a/src/vs/workbench/api/browser/mainThreadTerminalService.ts b/src/vs/workbench/api/browser/mainThreadTerminalService.ts
index 5c833aa9eb7..77b5c4050f6 100644
--- a/src/vs/workbench/api/browser/mainThreadTerminalService.ts
+++ b/src/vs/workbench/api/browser/mainThreadTerminalService.ts
@@ -129,7 +129,8 @@ export class MainThreadTerminalService implements MainThreadTerminalServiceShape
 			hideFromUser: launchConfig.hideFromUser,
 			isExtensionTerminal: launchConfig.isExtensionTerminal,
 			extHostTerminalId: extHostTerminalId,
-			isFeatureTerminal: launchConfig.isFeatureTerminal
+			isFeatureTerminal: launchConfig.isFeatureTerminal,
+			isExtensionOwnedTerminal: launchConfig.isExtensionOwnedTerminal
 		};
 		const terminal = this._terminalService.createTerminal(shellLaunchConfig);
 		this._extHostTerminalIds.set(extHostTerminalId, terminal.instanceId);
diff --git a/src/vs/workbench/api/common/extHost.protocol.ts b/src/vs/workbench/api/common/extHost.protocol.ts
index 7509513e300..0cd656af0cd 100644
--- a/src/vs/workbench/api/common/extHost.protocol.ts
+++ b/src/vs/workbench/api/common/extHost.protocol.ts
@@ -459,6 +459,7 @@ export interface TerminalLaunchConfig {
 	hideFromUser?: boolean;
 	isExtensionTerminal?: boolean;
 	isFeatureTerminal?: boolean;
+	isExtensionOwnedTerminal?: boolean;
 }
 
 export interface MainThreadTerminalServiceShape extends IDisposable {
diff --git a/src/vs/workbench/api/common/extHostTerminalService.ts b/src/vs/workbench/api/common/extHostTerminalService.ts
index aeac665bd64..f04d05e483c 100644
--- a/src/vs/workbench/api/common/extHostTerminalService.ts
+++ b/src/vs/workbench/api/common/extHostTerminalService.ts
@@ -120,12 +120,13 @@ export class ExtHostTerminal {
 		waitOnExit?: boolean,
 		strictEnv?: boolean,
 		hideFromUser?: boolean,
-		isFeatureTerminal?: boolean
+		isFeatureTerminal?: boolean,
+		isExtensionOwnedTerminal?: boolean
 	): Promise<void> {
 		if (typeof this._id !== 'string') {
 			throw new Error('Terminal has already been created');
 		}
-		await this._proxy.$createTerminal(this._id, { name: this._name, shellPath, shellArgs, cwd, env, waitOnExit, strictEnv, hideFromUser, isFeatureTerminal });
+		await this._proxy.$createTerminal(this._id, { name: this._name, shellPath, shellArgs, cwd, env, waitOnExit, strictEnv, hideFromUser, isFeatureTerminal, isExtensionOwnedTerminal });
 	}
 
 	public async createExtensionTerminal(): Promise<number> {
diff --git a/src/vs/workbench/api/node/extHostTerminalService.ts b/src/vs/workbench/api/node/extHostTerminalService.ts
index 4b14a68a9b5..d2b9958bfbd 100644
--- a/src/vs/workbench/api/node/extHostTerminalService.ts
+++ b/src/vs/workbench/api/node/extHostTerminalService.ts
@@ -66,7 +66,9 @@ export class ExtHostTerminalService extends BaseExtHostTerminalService {
 			/*options.waitOnExit*/ undefined,
 			withNullAsUndefined(options.strictEnv),
 			withNullAsUndefined(options.hideFromUser),
-			withNullAsUndefined(isFeatureTerminal));
+			withNullAsUndefined(isFeatureTerminal),
+			true
+		);
 		return terminal.value;
 	}
 
diff --git a/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts b/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
index 22e827825d4..ab483ff20ee 100644
--- a/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
+++ b/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
@@ -1591,7 +1591,7 @@ export class TerminalInstance extends Disposable implements ITerminalInstance {
 
 		// Recreate the process if the terminal has not yet been interacted with and it's not a
 		// special terminal (eg. task, extension terminal)
-		if (info.requiresAction && !this._processManager.hasWrittenData && !this._shellLaunchConfig.isFeatureTerminal && !this._shellLaunchConfig.isExtensionTerminal && !this._shellLaunchConfig.attachPersistentProcess) {
+		if (info.requiresAction && !this._processManager.hasWrittenData && !this._shellLaunchConfig.isFeatureTerminal && !this._shellLaunchConfig.isExtensionTerminal && !this._shellLaunchConfig.isExtensionOwnedTerminal && !this._shellLaunchConfig.attachPersistentProcess) {
 			this.relaunch();
 			return;
 		}