diff --git a/packages/kilo-vscode/src/agent-manager/terminal-manager.ts b/packages/kilo-vscode/src/agent-manager/terminal-manager.ts
index 998c3d6cdfd..40b98a58e14 100644
--- a/packages/kilo-vscode/src/agent-manager/terminal-manager.ts
+++ b/packages/kilo-vscode/src/agent-manager/terminal-manager.ts
@@ -15,6 +15,8 @@
 
 import type { KiloClient } from "@kilocode/sdk/v2/client"
 
+const env = { KILO_UNICODE_LOGO: "0" }
+
 /**
  * Everything the manager needs from the surrounding AgentManagerProvider.
  *
@@ -73,7 +75,7 @@ export class TerminalManager {
       title: params.title,
       // xterm's DOM renderer cannot draw the Unicode sextant glyphs used by
       // Kilo's modern wordmark, so use the compatible logo in embedded tabs.
-      env: { KILO_UNICODE_LOGO: "0" },
+      env,
     })
     if (error || !data) {
       const err = error instanceof Error ? error.message : String(error ?? "unknown error")
@@ -240,6 +242,7 @@ export class TerminalManager {
         directory: entry.cwd,
         cwd: entry.cwd,
         title: entry.title,
+        env,
       })
       const info = created.data
       if (created.error || !info)
diff --git a/packages/kilo-vscode/tests/unit/agent-manager-terminal-routing.test.ts b/packages/kilo-vscode/tests/unit/agent-manager-terminal-routing.test.ts
index 7ad1005e097..709a704b8f6 100644
--- a/packages/kilo-vscode/tests/unit/agent-manager-terminal-routing.test.ts
+++ b/packages/kilo-vscode/tests/unit/agent-manager-terminal-routing.test.ts
@@ -51,6 +51,9 @@ describe("Agent Manager terminal routing", () => {
       projectId: "prj-1",
     })
     expect(envs[0]).toEqual({ KILO_UNICODE_LOGO: "0" })
+    router.handle({ type: "agentManager.terminal.restart", terminalId: "side-1" })
+    await wait()
+    expect(envs[1]).toEqual({ KILO_UNICODE_LOGO: "0" })
 
     router.handle({
       type: "agentManager.terminal.create",
@@ -58,7 +61,9 @@ describe("Agent Manager terminal routing", () => {
       placement: "side",
       worktreeId: "missing",
     })
-    expect(messages[1]).toMatchObject({
+    expect(
+      messages.find((message) => message.type === "agentManager.terminal.error" && message.createId === "side-missing"),
+    ).toMatchObject({
       type: "agentManager.terminal.error",
       createId: "side-missing",
     })