diff --git a/src/vs/workbench/contrib/terminal/browser/media/terminal.css b/src/vs/workbench/contrib/terminal/browser/media/terminal.css
index b0f82cd7de9ca..cc13450fe6fd8 100644
--- a/src/vs/workbench/contrib/terminal/browser/media/terminal.css
+++ b/src/vs/workbench/contrib/terminal/browser/media/terminal.css
@@ -48,13 +48,18 @@
 .monaco-workbench .pane-body.integrated-terminal .xterm {
 	/* All terminals have at least 10px left/right edge padding and 2 padding on the bottom (so underscores on last line are visible */
 	padding: 0 10px 2px;
-	/* Bottom align the terminal withing the split pane */
+	/* Bottom align the terminal within the split pane */
 	position: absolute;
 	bottom: 0;
 	left: 0;
 	right: 0;
 }
 
+.terminal-side-view .terminal.xterm {
+	/* Top align the terminal within the split pane when the panel is vertical */
+	top: 0;
+}
+
 .monaco-workbench .editor-instance .terminal-wrapper.fixed-dims .xterm,
 .monaco-workbench .pane-body.integrated-terminal .terminal-wrapper.fixed-dims .xterm {
 	position: static;
diff --git a/src/vs/workbench/contrib/terminal/browser/terminalTabbedView.ts b/src/vs/workbench/contrib/terminal/browser/terminalTabbedView.ts
index 6c9576dbc2317..c0ba0a11000e6 100644
--- a/src/vs/workbench/contrib/terminal/browser/terminalTabbedView.ts
+++ b/src/vs/workbench/contrib/terminal/browser/terminalTabbedView.ts
@@ -28,9 +28,15 @@ import { TerminalContextKeys } from 'vs/workbench/contrib/terminal/common/termin
 
 const $ = dom.$;
 
-const FIND_FOCUS_CLASS = 'find-focused';
-const STATUS_ICON_WIDTH = 30;
-const SPLIT_ANNOTATION_WIDTH = 30;
+const enum CssClass {
+	ViewIsVertical = 'terminal-side-view',
+	FindFocus = 'find-focused'
+}
+
+const enum WidthConstants {
+	StatusIcon = 30,
+	SplitAnnotation = 30
+}
 
 export class TerminalTabbedView extends Disposable {
 
@@ -129,13 +135,18 @@ export class TerminalTabbedView extends Disposable {
 		this._register(this._themeService.onDidColorThemeChange(theme => this._updateTheme(theme)));
 		this._updateTheme();
 
-		this._findWidget.focusTracker.onDidFocus(() => this._terminalContainer.classList.add(FIND_FOCUS_CLASS));
-		this._findWidget.focusTracker.onDidBlur(() => this._terminalContainer.classList.remove(FIND_FOCUS_CLASS));
+		this._findWidget.focusTracker.onDidFocus(() => this._terminalContainer.classList.add(CssClass.FindFocus));
+		this._findWidget.focusTracker.onDidBlur(() => this._terminalContainer.classList.remove(CssClass.FindFocus));
 
 		this._attachEventListeners(parentElement, this._terminalContainer);
 
 		this._terminalGroupService.onDidChangePanelOrientation((orientation) => {
 			this._panelOrientation = orientation;
+			if (this._panelOrientation === Orientation.VERTICAL) {
+				this._terminalContainer.classList.add(CssClass.ViewIsVertical);
+			} else {
+				this._terminalContainer.classList.remove(CssClass.ViewIsVertical);
+			}
 		});
 
 		this._splitView = new SplitView(parentElement, { orientation: Orientation.HORIZONTAL, proportionalLayout: false });
@@ -223,8 +234,8 @@ export class TerminalTabbedView extends Disposable {
 	private _getAdditionalWidth(instance: ITerminalInstance): number {
 		// Size to include padding, icon, status icon (if any), split annotation (if any), + a little more
 		const additionalWidth = 40;
-		const statusIconWidth = instance.statusList.statuses.length > 0 ? STATUS_ICON_WIDTH : 0;
-		const splitAnnotationWidth = (this._terminalGroupService.getGroupForInstance(instance)?.terminalInstances.length || 0) > 1 ? SPLIT_ANNOTATION_WIDTH : 0;
+		const statusIconWidth = instance.statusList.statuses.length > 0 ? WidthConstants.StatusIcon : 0;
+		const splitAnnotationWidth = (this._terminalGroupService.getGroupForInstance(instance)?.terminalInstances.length || 0) > 1 ? WidthConstants.SplitAnnotation : 0;
 		return additionalWidth + splitAnnotationWidth + statusIconWidth;
 	}