diff --git a/crates/util/src/util.rs b/crates/util/src/util.rs
index 5961089a3b228e2b76cd3225568eab298c2baf3f..9b099f04983909b55e0fc5c161fd911210e96f37 100644
--- a/crates/util/src/util.rs
+++ b/crates/util/src/util.rs
@@ -365,6 +365,13 @@ pub async fn load_login_shell_environment() -> Result<()> {
         .await
         .with_context(|| format!("capturing environment with {:?}", get_system_shell()))?
     {
+        // Skip SHLVL to prevent it from polluting Zed's process environment.
+        // The login shell used for env capture increments SHLVL, and if we propagate it,
+        // terminals spawned by Zed will inherit it and increment again, causing SHLVL
+        // to start at 2 instead of 1 (and increase by 2 on each reload).
+        if name == "SHLVL" {
+            continue;
+        }
         unsafe { env::set_var(&name, &value) };
     }