diff --git a/crates/project/src/terminals.rs b/crates/project/src/terminals.rs
index ababb3261b3376413ca750211f2f993fb80d09c1..54dd48cf433ff34bcd70ed3530599fd4d838e74d 100644
--- a/crates/project/src/terminals.rs
+++ b/crates/project/src/terminals.rs
@@ -215,7 +215,6 @@ impl Project {
             spawn_task,
             shell,
             env,
-            Some(settings.blinking),
             settings.cursor_shape.unwrap_or_default(),
             settings.alternate_scroll,
             settings.max_scroll_history_lines,
diff --git a/crates/terminal/src/terminal.rs b/crates/terminal/src/terminal.rs
index f9767b07d12612905489b287e59d2607342094c7..b51308df37884592f9b57e2996047bbb4e1a82df 100644
--- a/crates/terminal/src/terminal.rs
+++ b/crates/terminal/src/terminal.rs
@@ -42,7 +42,7 @@ use serde::{Deserialize, Serialize};
 use settings::Settings;
 use smol::channel::{Receiver, Sender};
 use task::{HideStrategy, Shell, TaskId};
-use terminal_settings::{AlternateScroll, CursorShape, TerminalBlink, TerminalSettings};
+use terminal_settings::{AlternateScroll, CursorShape, TerminalSettings};
 use theme::{ActiveTheme, Theme};
 use util::truncate_and_trailoff;
 
@@ -102,7 +102,7 @@ pub enum Event {
     CloseTerminal,
     Bell,
     Wakeup,
-    BlinkChanged,
+    BlinkChanged(bool),
     SelectionsChanged,
     NewNavigationTarget(Option<MaybeNavigationTarget>),
     Open(MaybeNavigationTarget),
@@ -315,7 +315,6 @@ impl TerminalBuilder {
         task: Option<TaskState>,
         shell: Shell,
         mut env: HashMap<String, String>,
-        blink_settings: Option<TerminalBlink>,
         cursor_shape: CursorShape,
         alternate_scroll: AlternateScroll,
         max_scroll_history_lines: Option<usize>,
@@ -378,16 +377,11 @@ impl TerminalBuilder {
         let (events_tx, events_rx) = unbounded();
         //Set up the terminal...
         let mut term = Term::new(
-            config,
+            config.clone(),
             &TerminalSize::default(),
             ZedListener(events_tx.clone()),
         );
 
-        //Start off blinking if we need to
-        if let Some(TerminalBlink::On) = blink_settings {
-            term.set_private_mode(PrivateMode::Named(NamedPrivateMode::BlinkingCursor));
-        }
-
         //Alacritty defaults to alternate scrolling being on, so we just need to turn it off.
         if let AlternateScroll::Off = alternate_scroll {
             term.unset_private_mode(PrivateMode::Named(NamedPrivateMode::AlternateScroll));
@@ -437,6 +431,7 @@ impl TerminalBuilder {
             pty_tx: Notifier(pty_tx),
             completion_tx,
             term,
+            term_config: config,
             events: VecDeque::with_capacity(10), //Should never get this high.
             last_content: Default::default(),
             last_mouse: None,
@@ -588,6 +583,7 @@ pub struct Terminal {
     pty_tx: Notifier,
     completion_tx: Sender<()>,
     term: Arc<FairMutex<Term<ZedListener>>>,
+    term_config: Config,
     events: VecDeque<InternalEvent>,
     /// This is only used for mouse mode cell change detection
     last_mouse: Option<(AlacPoint, AlacDirection)>,
@@ -672,7 +668,9 @@ impl Terminal {
                 self.write_to_pty(format(self.last_content.size.into()))
             }
             AlacTermEvent::CursorBlinkingChange => {
-                cx.emit(Event::BlinkChanged);
+                let terminal = self.term.lock();
+                let blinking = terminal.cursor_style().blinking;
+                cx.emit(Event::BlinkChanged(blinking));
             }
             AlacTermEvent::Bell => {
                 cx.emit(Event::Bell);
@@ -957,7 +955,8 @@ impl Terminal {
     }
 
     pub fn set_cursor_shape(&mut self, cursor_shape: CursorShape) {
-        self.term.lock().set_cursor_style(Some(cursor_shape.into()));
+        self.term_config.default_cursor_style = cursor_shape.into();
+        self.term.lock().set_options(self.term_config.clone());
     }
 
     pub fn total_lines(&self) -> usize {
diff --git a/crates/terminal_view/src/terminal_view.rs b/crates/terminal_view/src/terminal_view.rs
index f7b38e3f5ca3e435582d935dcf4ba45544111853..ce65be30c6d4f2ba8e378faf8dcca10137366757 100644
--- a/crates/terminal_view/src/terminal_view.rs
+++ b/crates/terminal_view/src/terminal_view.rs
@@ -104,7 +104,7 @@ pub struct TerminalView {
     context_menu: Option<(View<ContextMenu>, gpui::Point<Pixels>, Subscription)>,
     cursor_shape: CursorShape,
     blink_state: bool,
-    blinking_on: bool,
+    blinking_terminal_enabled: bool,
     blinking_paused: bool,
     blink_epoch: usize,
     can_navigate_to_selected_word: bool,
@@ -184,7 +184,7 @@ impl TerminalView {
             context_menu: None,
             cursor_shape,
             blink_state: true,
-            blinking_on: false,
+            blinking_terminal_enabled: false,
             blinking_paused: false,
             blink_epoch: 0,
             can_navigate_to_selected_word: false,
@@ -434,7 +434,6 @@ impl TerminalView {
     pub fn should_show_cursor(&self, focused: bool, cx: &mut gpui::ViewContext<Self>) -> bool {
         //Don't blink the cursor when not focused, blinking is disabled, or paused
         if !focused
-            || !self.blinking_on
             || self.blinking_paused
             || self
                 .terminal
@@ -450,7 +449,10 @@ impl TerminalView {
             //If the user requested to never blink, don't blink it.
             TerminalBlink::Off => true,
             //If the terminal is controlling it, check terminal mode
-            TerminalBlink::TerminalControlled | TerminalBlink::On => self.blink_state,
+            TerminalBlink::TerminalControlled => {
+                !self.blinking_terminal_enabled || self.blink_state
+            }
+            TerminalBlink::On => self.blink_state,
         }
     }
 
@@ -642,7 +644,14 @@ fn subscribe_for_terminal_events(
                 cx.emit(Event::Wakeup);
             }
 
-            Event::BlinkChanged => this.blinking_on = !this.blinking_on,
+            Event::BlinkChanged(blinking) => {
+                if matches!(
+                    TerminalSettings::get_global(cx).blinking,
+                    TerminalBlink::TerminalControlled
+                ) {
+                    this.blinking_terminal_enabled = *blinking;
+                }
+            }
 
             Event::TitleChanged => {
                 cx.emit(ItemEvent::UpdateTab);