diff --git a/src/vs/workbench/contrib/terminal/browser/terminal.ts b/src/vs/workbench/contrib/terminal/browser/terminal.ts
index aaa3ee98c5dd8..236cc4eab7ee6 100644
--- a/src/vs/workbench/contrib/terminal/browser/terminal.ts
+++ b/src/vs/workbench/contrib/terminal/browser/terminal.ts
@@ -653,6 +653,7 @@ export interface ITerminalInstance extends IBaseTerminalInstance {
 	onDidInputData: Event<ITerminalInstance>;
 	onDidChangeSelection: Event<ITerminalInstance>;
 	onDidRunText: Event<void>;
+	onDidChangeTarget: Event<TerminalLocation | undefined>;
 
 	/**
 	 * An event that fires when a terminal is dropped on this instance via drag and drop.
diff --git a/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts b/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
index 73a905dcd5747..51229ea570dd2 100644
--- a/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
+++ b/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
@@ -201,7 +201,10 @@ export class TerminalInstance extends Disposable implements ITerminalInstance {
 	}
 
 	get target(): TerminalLocation | undefined { return this._target; }
-	set target(value: TerminalLocation | undefined) { this._target = value; }
+	set target(value: TerminalLocation | undefined) {
+		this._target = value;
+		this._onDidChangeTarget.fire(value);
+	}
 
 	get instanceId(): number { return this._instanceId; }
 	get resource(): URI { return this._resource; }
@@ -322,6 +325,8 @@ export class TerminalInstance extends Disposable implements ITerminalInstance {
 	readonly onDidChangeHasChildProcesses = this._onDidChangeHasChildProcesses.event;
 	private readonly _onDidRunText = this._register(new Emitter<void>());
 	readonly onDidRunText = this._onDidRunText.event;
+	private readonly _onDidChangeTarget = this._register(new Emitter<TerminalLocation | undefined>());
+	readonly onDidChangeTarget = this._onDidChangeTarget.event;
 
 	constructor(
 		private readonly _terminalShellTypeContextKey: IContextKey<string>,
diff --git a/src/vs/workbench/contrib/terminalContrib/stickyScroll/browser/media/stickyScroll.css b/src/vs/workbench/contrib/terminalContrib/stickyScroll/browser/media/stickyScroll.css
index 21f47917b6012..182471ad8130e 100644
--- a/src/vs/workbench/contrib/terminalContrib/stickyScroll/browser/media/stickyScroll.css
+++ b/src/vs/workbench/contrib/terminalContrib/stickyScroll/browser/media/stickyScroll.css
@@ -12,6 +12,9 @@
 	background: var(--vscode-terminalStickyScroll-background, var(--vscode-terminal-background, var(--vscode-panel-background)));
 	box-shadow: var(--vscode-scrollbar-shadow) 0 3px 2px -2px;
 }
+.editor-instance .terminal-sticky-scroll {
+	background: var(--vscode-terminalStickyScroll-background, var(--vscode-terminal-background, var(--vscode-editor-background)));
+}
 
 .terminal-sticky-scroll.visible {
 	display:block;
diff --git a/src/vs/workbench/contrib/terminalContrib/stickyScroll/browser/terminalStickyScrollOverlay.ts b/src/vs/workbench/contrib/terminalContrib/stickyScroll/browser/terminalStickyScrollOverlay.ts
index a54e52081e02a..7a9fa1aafdacb 100644
--- a/src/vs/workbench/contrib/terminalContrib/stickyScroll/browser/terminalStickyScrollOverlay.ts
+++ b/src/vs/workbench/contrib/terminalContrib/stickyScroll/browser/terminalStickyScrollOverlay.ts
@@ -85,6 +85,9 @@ export class TerminalStickyScrollOverlay extends Disposable {
 			}
 		}));
 
+		// React to terminal location changes
+		this._register(this._instance.onDidChangeTarget(() => this._syncOptions()));
+
 		// Eagerly create the overlay
 		xtermCtor.then(ctor => {
 			this._stickyScrollOverlay = this._register(new ctor({