diff --git a/src/vs/base/node/shell.ts b/src/vs/base/node/shell.ts
new file mode 100644
index 00000000000..0ae5fe92ac6
--- /dev/null
+++ b/src/vs/base/node/shell.ts
@@ -0,0 +1,70 @@
+/*---------------------------------------------------------------------------------------------
+ *  Copyright (c) Microsoft Corporation. All rights reserved.
+ *  Licensed under the MIT License. See License.txt in the project root for license information.
+ *--------------------------------------------------------------------------------------------*/
+
+import * as os from 'os';
+import * as platform from 'vs/base/common/platform';
+import * as processes from 'vs/base/node/processes';
+
+/**
+ * Gets the detected default shell for the _system_, not to be confused with VS Code's _default_
+ * shell that the terminal uses by default.
+ * @param p The platform to detect the shell of.
+ */
+export function getSystemShell(p: platform.Platform, environment: platform.IProcessEnvironment = process.env as platform.IProcessEnvironment): string {
+	if (p === platform.Platform.Windows) {
+		if (platform.isWindows) {
+			return getSystemShellWindows(environment);
+		}
+		// Don't detect Windows shell when not on Windows
+		return processes.getWindowsShell(environment);
+	}
+	// Only use $SHELL for the current OS
+	if (platform.isLinux && p === platform.Platform.Mac || platform.isMacintosh && p === platform.Platform.Linux) {
+		return '/bin/bash';
+	}
+	return getSystemShellUnixLike(environment);
+}
+
+let _TERMINAL_DEFAULT_SHELL_UNIX_LIKE: string | null = null;
+function getSystemShellUnixLike(environment: platform.IProcessEnvironment): string {
+	if (!_TERMINAL_DEFAULT_SHELL_UNIX_LIKE) {
+		let unixLikeTerminal: string;
+		if (platform.isWindows) {
+			unixLikeTerminal = '/bin/bash'; // for WSL
+		} else {
+			unixLikeTerminal = environment.SHELL;
+
+			if (!unixLikeTerminal) {
+				try {
+					// It's possible for $SHELL to be unset, this API reads /etc/passwd. See https://github.com/github/codespaces/issues/1639
+					// Node docs: "Throws a SystemError if a user has no username or homedir."
+					unixLikeTerminal = os.userInfo().shell;
+				} catch (err) { }
+			}
+
+			if (!unixLikeTerminal) {
+				unixLikeTerminal = 'sh';
+			}
+
+			// Some systems have $SHELL set to /bin/false which breaks the terminal
+			if (unixLikeTerminal === '/bin/false') {
+				unixLikeTerminal = '/bin/bash';
+			}
+		}
+		_TERMINAL_DEFAULT_SHELL_UNIX_LIKE = unixLikeTerminal;
+	}
+	return _TERMINAL_DEFAULT_SHELL_UNIX_LIKE;
+}
+
+let _TERMINAL_DEFAULT_SHELL_WINDOWS: string | null = null;
+function getSystemShellWindows(environment: platform.IProcessEnvironment): string {
+	if (!_TERMINAL_DEFAULT_SHELL_WINDOWS) {
+		const isAtLeastWindows10 = platform.isWindows && parseFloat(os.release()) >= 10;
+		const is32ProcessOn64Windows = environment.hasOwnProperty('PROCESSOR_ARCHITEW6432');
+		const powerShellPath = `${environment.windir}\\${is32ProcessOn64Windows ? 'Sysnative' : 'System32'}\\WindowsPowerShell\\v1.0\\powershell.exe`;
+		_TERMINAL_DEFAULT_SHELL_WINDOWS = isAtLeastWindows10 ? powerShellPath : processes.getWindowsShell(environment);
+	}
+	return _TERMINAL_DEFAULT_SHELL_WINDOWS;
+}
diff --git a/src/vs/code/node/shellEnv.ts b/src/vs/code/node/shellEnv.ts
index 29ef8c143b3..2ea93f9c5af 100644
--- a/src/vs/code/node/shellEnv.ts
+++ b/src/vs/code/node/shellEnv.ts
@@ -5,11 +5,12 @@
 
 import { spawn } from 'child_process';
 import { generateUuid } from 'vs/base/common/uuid';
-import { isWindows } from 'vs/base/common/platform';
+import { isWindows, platform } from 'vs/base/common/platform';
 import { ILogService } from 'vs/platform/log/common/log';
 import { NativeParsedArgs } from 'vs/platform/environment/common/argv';
 import { isLaunchedFromCli } from 'vs/platform/environment/node/argvHelper';
 import { toErrorMessage } from 'vs/base/common/errorMessage';
+import { getSystemShell } from 'vs/base/node/shell';
 
 /**
  * We need to get the environment from a user's shell.
@@ -78,7 +79,8 @@ async function doResolveUnixShellEnv(logService: ILogService): Promise<typeof pr
 		logService.trace('getUnixShellEnvironment#env', env);
 		logService.trace('getUnixShellEnvironment#spawn', command);
 
-		const child = spawn(process.env.SHELL!, ['-ilc', command], {
+		const systemShellUnix = getSystemShell(platform);
+		const child = spawn(systemShellUnix, ['-ilc', command], {
 			detached: true,
 			stdio: ['ignore', 'pipe', process.stderr],
 			env
diff --git a/src/vs/workbench/api/node/extHostTerminalService.ts b/src/vs/workbench/api/node/extHostTerminalService.ts
index 01a34ff3f8c..0b4a07af8f5 100644
--- a/src/vs/workbench/api/node/extHostTerminalService.ts
+++ b/src/vs/workbench/api/node/extHostTerminalService.ts
@@ -17,13 +17,14 @@ import { ExtHostWorkspace, IExtHostWorkspace } from 'vs/workbench/api/common/ext
 import { IWorkspaceFolder } from 'vs/platform/workspace/common/workspace';
 import { ExtHostVariableResolverService } from 'vs/workbench/api/common/extHostDebugService';
 import { ExtHostDocumentsAndEditors, IExtHostDocumentsAndEditors } from 'vs/workbench/api/common/extHostDocumentsAndEditors';
-import { getSystemShell, detectAvailableShells } from 'vs/workbench/contrib/terminal/node/terminal';
+import { detectAvailableShells } from 'vs/workbench/contrib/terminal/node/terminal';
 import { getMainProcessParentEnv } from 'vs/workbench/contrib/terminal/node/terminalEnvironment';
 import { BaseExtHostTerminalService, ExtHostTerminal } from 'vs/workbench/api/common/extHostTerminalService';
 import { IExtHostRpcService } from 'vs/workbench/api/common/extHostRpcService';
 import { MergedEnvironmentVariableCollection } from 'vs/workbench/contrib/terminal/common/environmentVariableCollection';
 import { IExtHostInitDataService } from 'vs/workbench/api/common/extHostInitDataService';
 import { withNullAsUndefined } from 'vs/base/common/types';
+import { getSystemShell } from 'vs/base/node/shell';
 
 export class ExtHostTerminalService extends BaseExtHostTerminalService {
 
diff --git a/src/vs/workbench/contrib/terminal/electron-browser/terminal.contribution.ts b/src/vs/workbench/contrib/terminal/electron-browser/terminal.contribution.ts
index ca107b15e38..0ea7c35c273 100644
--- a/src/vs/workbench/contrib/terminal/electron-browser/terminal.contribution.ts
+++ b/src/vs/workbench/contrib/terminal/electron-browser/terminal.contribution.ts
@@ -7,12 +7,12 @@ import { IWorkbenchContributionsRegistry, Extensions as WorkbenchExtensions } fr
 import { registerSingleton } from 'vs/platform/instantiation/common/extensions';
 import { ITerminalInstanceService } from 'vs/workbench/contrib/terminal/browser/terminal';
 import { TerminalInstanceService } from 'vs/workbench/contrib/terminal/electron-browser/terminalInstanceService';
-import { getSystemShell } from 'vs/workbench/contrib/terminal/node/terminal';
 import { TerminalNativeContribution } from 'vs/workbench/contrib/terminal/electron-browser/terminalNativeContribution';
 import { Registry } from 'vs/platform/registry/common/platform';
 import { IConfigurationRegistry, Extensions } from 'vs/platform/configuration/common/configurationRegistry';
 import { getTerminalShellConfiguration } from 'vs/workbench/contrib/terminal/common/terminalConfiguration';
 import { LifecyclePhase } from 'vs/workbench/services/lifecycle/common/lifecycle';
+import { getSystemShell } from 'vs/base/node/shell';
 
 // This file contains additional desktop-only contributions on top of those in browser/
 
diff --git a/src/vs/workbench/contrib/terminal/electron-browser/terminalInstanceService.ts b/src/vs/workbench/contrib/terminal/electron-browser/terminalInstanceService.ts
index 9618773c0f9..03012b1ca05 100644
--- a/src/vs/workbench/contrib/terminal/electron-browser/terminalInstanceService.ts
+++ b/src/vs/workbench/contrib/terminal/electron-browser/terminalInstanceService.ts
@@ -9,7 +9,6 @@ import { WindowsShellHelper } from 'vs/workbench/contrib/terminal/electron-brows
 import { IInstantiationService } from 'vs/platform/instantiation/common/instantiation';
 import { IProcessEnvironment, platform, Platform } from 'vs/base/common/platform';
 import { TerminalProcess } from 'vs/workbench/contrib/terminal/node/terminalProcess';
-import { getSystemShell } from 'vs/workbench/contrib/terminal/node/terminal';
 import type { Terminal as XTermTerminal } from 'xterm';
 import type { SearchAddon as XTermSearchAddon } from 'xterm-addon-search';
 import type { Unicode11Addon as XTermUnicode11Addon } from 'xterm-addon-unicode11';
@@ -22,6 +21,7 @@ import { IConfigurationResolverService } from 'vs/workbench/services/configurati
 import { IHistoryService } from 'vs/workbench/services/history/common/history';
 import { IWorkspaceContextService } from 'vs/platform/workspace/common/workspace';
 import { ILogService } from 'vs/platform/log/common/log';
+import { getSystemShell } from 'vs/base/node/shell';
 
 let Terminal: typeof XTermTerminal;
 let SearchAddon: typeof XTermSearchAddon;
diff --git a/src/vs/workbench/contrib/terminal/node/terminal.ts b/src/vs/workbench/contrib/terminal/node/terminal.ts
index 4a006c386e2..f8281c244da 100644
--- a/src/vs/workbench/contrib/terminal/node/terminal.ts
+++ b/src/vs/workbench/contrib/terminal/node/terminal.ts
@@ -5,62 +5,11 @@
 
 import * as os from 'os';
 import * as platform from 'vs/base/common/platform';
-import * as processes from 'vs/base/node/processes';
 import { readFile, fileExists, stat } from 'vs/base/node/pfs';
 import { LinuxDistro, IShellDefinition } from 'vs/workbench/contrib/terminal/common/terminal';
 import { coalesce } from 'vs/base/common/arrays';
 import { normalize, basename } from 'vs/base/common/path';
 
-/**
- * Gets the detected default shell for the _system_, not to be confused with VS Code's _default_
- * shell that the terminal uses by default.
- * @param p The platform to detect the shell of.
- */
-export function getSystemShell(p: platform.Platform, environment: platform.IProcessEnvironment = process.env as platform.IProcessEnvironment): string {
-	if (p === platform.Platform.Windows) {
-		if (platform.isWindows) {
-			return getSystemShellWindows(environment);
-		}
-		// Don't detect Windows shell when not on Windows
-		return processes.getWindowsShell(environment);
-	}
-	// Only use $SHELL for the current OS
-	if (platform.isLinux && p === platform.Platform.Mac || platform.isMacintosh && p === platform.Platform.Linux) {
-		return '/bin/bash';
-	}
-	return getSystemShellUnixLike(environment);
-}
-
-let _TERMINAL_DEFAULT_SHELL_UNIX_LIKE: string | null = null;
-function getSystemShellUnixLike(environment: platform.IProcessEnvironment): string {
-	if (!_TERMINAL_DEFAULT_SHELL_UNIX_LIKE) {
-		let unixLikeTerminal = 'sh';
-		if (!platform.isWindows && environment.SHELL) {
-			unixLikeTerminal = environment.SHELL;
-			// Some systems have $SHELL set to /bin/false which breaks the terminal
-			if (unixLikeTerminal === '/bin/false') {
-				unixLikeTerminal = '/bin/bash';
-			}
-		}
-		if (platform.isWindows) {
-			unixLikeTerminal = '/bin/bash'; // for WSL
-		}
-		_TERMINAL_DEFAULT_SHELL_UNIX_LIKE = unixLikeTerminal;
-	}
-	return _TERMINAL_DEFAULT_SHELL_UNIX_LIKE;
-}
-
-let _TERMINAL_DEFAULT_SHELL_WINDOWS: string | null = null;
-function getSystemShellWindows(environment: platform.IProcessEnvironment): string {
-	if (!_TERMINAL_DEFAULT_SHELL_WINDOWS) {
-		const isAtLeastWindows10 = platform.isWindows && parseFloat(os.release()) >= 10;
-		const is32ProcessOn64Windows = environment.hasOwnProperty('PROCESSOR_ARCHITEW6432');
-		const powerShellPath = `${environment.windir}\\${is32ProcessOn64Windows ? 'Sysnative' : 'System32'}\\WindowsPowerShell\\v1.0\\powershell.exe`;
-		_TERMINAL_DEFAULT_SHELL_WINDOWS = isAtLeastWindows10 ? powerShellPath : processes.getWindowsShell(environment);
-	}
-	return _TERMINAL_DEFAULT_SHELL_WINDOWS;
-}
-
 let detectedDistro = LinuxDistro.Unknown;
 if (platform.isLinux) {
 	const file = '/etc/os-release';