diff --git a/src/vs/workbench/parts/terminal/common/terminal.ts b/src/vs/workbench/parts/terminal/common/terminal.ts
index aaff277951ad1cb92fa53d7f9fc7463c76b9e341..17b62d064f0629b152809730869c679f2a135ceb 100644
--- a/src/vs/workbench/parts/terminal/common/terminal.ts
+++ b/src/vs/workbench/parts/terminal/common/terminal.ts
@@ -265,4 +265,11 @@ export interface ITerminalInstance {
 	 * null means the process was killed as a result of the ITerminalInstance being disposed.
 	 */
 	onExit(listener: (exitCode: number) => void): void;
+
+	/**
+	 * Immediately kills the terminal's current pty process and launches a new one to replace it.
+	 *
+	 * @param shell The new launch configuration.
+	 */
+	reuseTerminal(shell: IShellLaunchConfig): void;
 }
diff --git a/src/vs/workbench/parts/terminal/electron-browser/terminalInstance.ts b/src/vs/workbench/parts/terminal/electron-browser/terminalInstance.ts
index f54dc1069caead9688f0943eacd10cbc449c8fbe..d8ae919075b750e66c3037e5a9e072928f9faaf5 100644
--- a/src/vs/workbench/parts/terminal/electron-browser/terminalInstance.ts
+++ b/src/vs/workbench/parts/terminal/electron-browser/terminalInstance.ts
@@ -110,14 +110,7 @@ export class TerminalInstance implements ITerminalInstance {
 		});
 		this._xterm.open(this._xtermElement);
 
-		this._process.on('message', (message) => {
-			if (!this._xterm) {
-				return;
-			}
-			if (message.type === 'data') {
-				this._xterm.write(message.content);
-			}
-		});
+		this._process.on('message', (message) => this._sendPtyDataToXterm(message));
 		this._xterm.on('data', (data) => {
 			this._process.send({
 				event: 'input',
@@ -371,6 +364,15 @@ export class TerminalInstance implements ITerminalInstance {
 		}, LAUNCHING_DURATION);
 	}
 
+	private _sendPtyDataToXterm(message: { type: string, content: string }): void {
+		if (!this._xterm) {
+			return;
+		}
+		if (message.type === 'data') {
+			this._xterm.write(message.content);
+		}
+	}
+
 	private _onPtyProcessExit(exitCode: number): void {
 		// Prevent dispose functions being triggered multiple times
 		if (this._isExiting) {
@@ -418,6 +420,26 @@ export class TerminalInstance implements ITerminalInstance {
 		}
 	}
 
+	public reuseTerminal(shell: IShellLaunchConfig): void {
+		if (this._process) {
+			this._process.removeAllListeners('exit');
+			if (this._process.connected) {
+				this._process.kill();
+			}
+			this._process = null;
+		}
+		// Ensure new processes' output starts at start of new line
+		this._xterm.write('\n\x1b[G');
+		this._createProcess(this._contextService.getWorkspace(), shell.name, shell);
+		this._process.on('message', (message) => this._sendPtyDataToXterm(message));
+		// TODO: Get rid of wait for any key listeners and any other listeners that are no longer valid
+		if (this._isExiting && this._shellLaunchConfig.waitOnExit) {
+			this._xterm.setOption('disableStdin', false);
+		}
+		// Set the new shell launch config
+		this._shellLaunchConfig = shell;
+	}
+
 	// TODO: This should be private/protected
 	// TODO: locale should not be optional
 	public static createTerminalEnv(parentEnv: IStringDictionary<string>, shell: IShellLaunchConfig, cwd: string, locale?: string): IStringDictionary<string> {