diff --git a/src/tsconfig.strictNullChecks.json b/src/tsconfig.strictNullChecks.json
index be9fea82c09..7d4c44002ba 100644
--- a/src/tsconfig.strictNullChecks.json
+++ b/src/tsconfig.strictNullChecks.json
@@ -648,6 +648,7 @@
 		"./vs/workbench/parts/terminal/common/terminalMenu.ts",
 		"./vs/workbench/parts/terminal/common/terminalService.ts",
 		"./vs/workbench/parts/terminal/electron-browser/terminalConfigHelper.ts",
+		"./vs/workbench/parts/terminal/electron-browser/terminalProcessManager.ts",
 		"./vs/workbench/parts/terminal/node/terminal.ts",
 		"./vs/workbench/parts/terminal/node/terminalCommandTracker.ts",
 		"./vs/workbench/parts/terminal/node/terminalEnvironment.ts",
diff --git a/src/vs/workbench/parts/terminal/common/terminal.ts b/src/vs/workbench/parts/terminal/common/terminal.ts
index c978bb94ab1..0f276870ab5 100644
--- a/src/vs/workbench/parts/terminal/common/terminal.ts
+++ b/src/vs/workbench/parts/terminal/common/terminal.ts
@@ -124,6 +124,10 @@ export interface ITerminalFont {
 	charHeight?: number;
 }
 
+export interface ITerminalEnvironment {
+	[key: string]: string | null;
+}
+
 export interface IShellLaunchConfig {
 	/**
 	 * The name of the terminal, if this is not set the name of the process will be used.
@@ -152,7 +156,7 @@ export interface IShellLaunchConfig {
 	 * A custom environment for the terminal, if this is not set the environment will be inherited
 	 * from the VS Code process.
 	 */
-	env?: { [key: string]: string };
+	env?: ITerminalEnvironment;
 
 	/**
 	 * Whether to ignore a custom cwd from the `terminal.integrated.cwd` settings key (eg. if the
diff --git a/src/vs/workbench/parts/terminal/electron-browser/terminalProcessManager.ts b/src/vs/workbench/parts/terminal/electron-browser/terminalProcessManager.ts
index a71d05f4b83..2e6dae63eff 100644
--- a/src/vs/workbench/parts/terminal/electron-browser/terminalProcessManager.ts
+++ b/src/vs/workbench/parts/terminal/electron-browser/terminalProcessManager.ts
@@ -37,7 +37,7 @@ export class TerminalProcessManager implements ITerminalProcessManager {
 	public shellProcessId: number;
 	public initialCwd: string;
 
-	private _process: ITerminalChildProcess;
+	private _process: ITerminalChildProcess | null = null;
 	private _preLaunchInputQueue: string[] = [];
 	private _disposables: IDisposable[] = [];
 
@@ -68,7 +68,7 @@ export class TerminalProcessManager implements ITerminalProcessManager {
 		});
 	}
 
-	public dispose(immediate?: boolean): void {
+	public dispose(immediate: boolean = false): void {
 		if (this._process) {
 			// If the process was still connected this dispose came from
 			// within VS Code, not the process, so mark the process as
@@ -108,8 +108,10 @@ export class TerminalProcessManager implements ITerminalProcessManager {
 			const envFromShell = terminalEnvironment.resolveConfigurationVariables(this._configurationResolverService, { ...shellLaunchConfig.env }, lastActiveWorkspaceRoot);
 			shellLaunchConfig.env = envFromShell;
 
+			// Compell type system as process.env should not have any undefined entries
+			const env: platform.IProcessEnvironment = { ...process.env } as any;
+
 			// Merge process env with the env from config and from shellLaunchConfig
-			const env = { ...process.env };
 			terminalEnvironment.mergeEnvironments(env, envFromConfig);
 			terminalEnvironment.mergeEnvironments(env, shellLaunchConfig.env);
 
@@ -126,23 +128,26 @@ export class TerminalProcessManager implements ITerminalProcessManager {
 		}
 		this.processState = ProcessState.LAUNCHING;
 
-		this._process.onProcessData(data => {
+		// The process is non-null, but TS isn't clever enough to know
+		const p = this._process!;
+
+		p.onProcessData(data => {
 			this._onProcessData.fire(data);
 		});
 
-		this._process.onProcessIdReady(pid => {
+		p.onProcessIdReady(pid => {
 			this.shellProcessId = pid;
 			this._onProcessReady.fire();
 
 			// Send any queued data that's waiting
 			if (this._preLaunchInputQueue.length > 0) {
-				this._process.input(this._preLaunchInputQueue.join(''));
+				p.input(this._preLaunchInputQueue.join(''));
 				this._preLaunchInputQueue.length = 0;
 			}
 		});
 
-		this._process.onProcessTitleChanged(title => this._onProcessTitle.fire(title));
-		this._process.onProcessExit(exitCode => this._onExit(exitCode));
+		p.onProcessTitleChanged(title => this._onProcessTitle.fire(title));
+		p.onProcessExit(exitCode => this._onExit(exitCode));
 
 		setTimeout(() => {
 			if (this.processState === ProcessState.LAUNCHING) {
diff --git a/src/vs/workbench/parts/terminal/node/terminalEnvironment.ts b/src/vs/workbench/parts/terminal/node/terminalEnvironment.ts
index 4b018a661f1..a412a3daa7e 100644
--- a/src/vs/workbench/parts/terminal/node/terminalEnvironment.ts
+++ b/src/vs/workbench/parts/terminal/node/terminalEnvironment.ts
@@ -9,14 +9,14 @@ import * as platform from 'vs/base/common/platform';
 import pkg from 'vs/platform/node/package';
 import { URI as Uri } from 'vs/base/common/uri';
 import { IWorkspaceFolder } from 'vs/platform/workspace/common/workspace';
-import { IShellLaunchConfig } from 'vs/workbench/parts/terminal/common/terminal';
+import { IShellLaunchConfig, ITerminalEnvironment } from 'vs/workbench/parts/terminal/common/terminal';
 import { IConfigurationResolverService } from 'vs/workbench/services/configurationResolver/common/configurationResolver';
 
 /**
  * This module contains utility functions related to the environment, cwd and paths.
  */
 
-export function mergeEnvironments(parent: platform.IProcessEnvironment, other: platform.IProcessEnvironment): void {
+export function mergeEnvironments(parent: platform.IProcessEnvironment, other: ITerminalEnvironment): void {
 	if (!other) {
 		return;
 	}
@@ -43,7 +43,7 @@ export function mergeEnvironments(parent: platform.IProcessEnvironment, other: p
 	}
 }
 
-function _mergeEnvironmentValue(env: platform.IProcessEnvironment, key: string, value: string | null): void {
+function _mergeEnvironmentValue(env: ITerminalEnvironment, key: string, value: string | null): void {
 	if (typeof value === 'string') {
 		env[key] = value;
 	} else {
@@ -51,7 +51,7 @@ function _mergeEnvironmentValue(env: platform.IProcessEnvironment, key: string,
 	}
 }
 
-export function sanitizeEnvironment(env: platform.IProcessEnvironment): void {
+export function sanitizeEnvironment(env: ITerminalEnvironment): void {
 	// Remove keys based on strings
 	const keysToRemove = [
 		'ELECTRON_ENABLE_STACK_DUMPING',
@@ -76,16 +76,17 @@ export function sanitizeEnvironment(env: platform.IProcessEnvironment): void {
 	});
 }
 
-export function addTerminalEnvironmentKeys(env: platform.IProcessEnvironment, locale: string | undefined): void {
+export function addTerminalEnvironmentKeys(env: ITerminalEnvironment, locale: string | undefined): void {
 	env['TERM_PROGRAM'] = 'vscode';
 	env['TERM_PROGRAM_VERSION'] = pkg.version;
 	env['LANG'] = _getLangEnvVariable(locale);
 }
 
-export function resolveConfigurationVariables(configurationResolverService: IConfigurationResolverService, env: platform.IProcessEnvironment, lastActiveWorkspaceRoot: IWorkspaceFolder): platform.IProcessEnvironment {
+export function resolveConfigurationVariables(configurationResolverService: IConfigurationResolverService, env: ITerminalEnvironment, lastActiveWorkspaceRoot: IWorkspaceFolder | null): ITerminalEnvironment {
 	Object.keys(env).forEach((key) => {
-		if (typeof env[key] === 'string') {
-			env[key] = configurationResolverService.resolve(lastActiveWorkspaceRoot, env[key]);
+		const value = env[key];
+		if (typeof value === 'string' && lastActiveWorkspaceRoot !== null) {
+			env[key] = configurationResolverService.resolve(lastActiveWorkspaceRoot, value);
 		}
 	});
 	return env;