diff --git a/src/vs/workbench/api/node/extHostTerminalService.ts b/src/vs/workbench/api/node/extHostTerminalService.ts
index 82b27ae509b..e9f46a0b40b 100644
--- a/src/vs/workbench/api/node/extHostTerminalService.ts
+++ b/src/vs/workbench/api/node/extHostTerminalService.ts
@@ -392,7 +392,7 @@ export class ExtHostTerminalService implements ExtHostTerminalServiceShape {
 		// Continue env initialization, merging in the env from the launch
 		// config and adding keys that are needed to create the process
 		const locale = terminalConfig.get('setLocaleVariables') ? platform.locale : undefined;
-		terminalEnvironment.addTerminalEnvironmentKeys(env, locale);
+		terminalEnvironment.addTerminalEnvironmentKeys(env, platform.isWindows, locale);
 
 		// Fork the process and listen for messages
 		this._logService.debug(`Terminal process launching on ext host`, shellLaunchConfig, initialCwd, cols, rows, env);
diff --git a/src/vs/workbench/parts/terminal/electron-browser/terminalProcessManager.ts b/src/vs/workbench/parts/terminal/electron-browser/terminalProcessManager.ts
index 818b359ea99..9ccdf7fe5fd 100644
--- a/src/vs/workbench/parts/terminal/electron-browser/terminalProcessManager.ts
+++ b/src/vs/workbench/parts/terminal/electron-browser/terminalProcessManager.ts
@@ -117,7 +117,7 @@ export class TerminalProcessManager implements ITerminalProcessManager {
 
 			// Adding other env keys necessary to create the process
 			const locale = this._configHelper.config.setLocaleVariables ? platform.locale : undefined;
-			terminalEnvironment.addTerminalEnvironmentKeys(env, locale);
+			terminalEnvironment.addTerminalEnvironmentKeys(env, platform.isWindows, locale);
 
 			this._logService.debug(`Terminal process launching`, shellLaunchConfig, this.initialCwd, cols, rows, env);
 			this._process = new TerminalProcess(shellLaunchConfig, this.initialCwd, cols, rows, env);
diff --git a/src/vs/workbench/parts/terminal/node/terminalEnvironment.ts b/src/vs/workbench/parts/terminal/node/terminalEnvironment.ts
index bf59acc1023..735b29d4428 100644
--- a/src/vs/workbench/parts/terminal/node/terminalEnvironment.ts
+++ b/src/vs/workbench/parts/terminal/node/terminalEnvironment.ts
@@ -82,9 +82,14 @@ export function sanitizeEnvironment(env: platform.IProcessEnvironment): void {
 	});
 }
 
-export function addTerminalEnvironmentKeys(env: platform.IProcessEnvironment, locale: string | undefined): void {
+export function addTerminalEnvironmentKeys(env: platform.IProcessEnvironment, isWindows: boolean, locale?: string): void {
 	env['TERM_PROGRAM'] = 'vscode';
 	env['TERM_PROGRAM_VERSION'] = pkg.version;
+
+	// Don't set $LANG if OS is Windows and the setLocale setting is false
+	if (isWindows && !locale) {
+		return;
+	}
 	env['LANG'] = _getLangEnvVariable(locale);
 }
 
@@ -97,7 +102,7 @@ export function resolveConfigurationVariables(configurationResolverService: ICon
 	return env;
 }
 
-function _getLangEnvVariable(locale?: string) {
+function _getLangEnvVariable(locale?: string): string {
 	const parts = locale ? locale.split('-') : [];
 	const n = parts.length;
 	if (n === 0) {
diff --git a/src/vs/workbench/parts/terminal/test/node/terminalEnvironment.test.ts b/src/vs/workbench/parts/terminal/test/node/terminalEnvironment.test.ts
index fbb6acbfb40..38f5e6f8b9d 100644
--- a/src/vs/workbench/parts/terminal/test/node/terminalEnvironment.test.ts
+++ b/src/vs/workbench/parts/terminal/test/node/terminalEnvironment.test.ts
@@ -15,18 +15,22 @@ suite('Workbench - TerminalEnvironment', () => {
 	test('addTerminalEnvironmentKeys', () => {
 		const env = { FOO: 'bar' };
 		const locale = 'en-au';
-		terminalEnvironment.addTerminalEnvironmentKeys(env, locale);
+		terminalEnvironment.addTerminalEnvironmentKeys(env, false, locale);
 		assert.equal(env['TERM_PROGRAM'], 'vscode');
 		assert.equal(env['TERM_PROGRAM_VERSION'].search(/^\d+\.\d+\.\d+$/), 0);
 		assert.equal(env['LANG'], 'en_AU.UTF-8', 'LANG is equal to the requested locale with UTF-8');
 
 		const env2 = { FOO: 'bar' };
-		terminalEnvironment.addTerminalEnvironmentKeys(env2, null);
+		terminalEnvironment.addTerminalEnvironmentKeys(env2, false);
 		assert.equal(env2['LANG'], 'en_US.UTF-8', 'LANG is equal to en_US.UTF-8 as fallback.'); // More info on issue #14586
 
 		const env3 = { LANG: 'en_US.UTF-8' };
-		terminalEnvironment.addTerminalEnvironmentKeys(env3, null);
+		terminalEnvironment.addTerminalEnvironmentKeys(env3, false);
 		assert.equal(env3['LANG'], 'en_US.UTF-8', 'LANG is equal to the parent environment\'s LANG');
+
+		const env4 = {};
+		terminalEnvironment.addTerminalEnvironmentKeys(env4, true);
+		assert.equal(env4['LANG'], undefined, 'LANG is not set when the OS is Windows and the setLocale is false');
 	});
 
 	test('sanitizeEnvironment', () => {