diff --git a/src/cascadia/TerminalApp/AppLogic.cpp b/src/cascadia/TerminalApp/AppLogic.cpp
index c2b24d029..7e5949577 100644
--- a/src/cascadia/TerminalApp/AppLogic.cpp
+++ b/src/cascadia/TerminalApp/AppLogic.cpp
@@ -1565,6 +1565,11 @@ namespace winrt::TerminalApp::implementation
         return _root->IsQuakeWindow();
     }
 
+    void AppLogic::RequestExitFullscreen()
+    {
+        _root->SetFullscreen(false);
+    }
+
     bool AppLogic::GetMinimizeToNotificationArea()
     {
         if constexpr (Feature_NotificationIcon::IsEnabled())
diff --git a/src/cascadia/TerminalApp/AppLogic.h b/src/cascadia/TerminalApp/AppLogic.h
index 9301a6698..7c1681db1 100644
--- a/src/cascadia/TerminalApp/AppLogic.h
+++ b/src/cascadia/TerminalApp/AppLogic.h
@@ -91,6 +91,7 @@ namespace winrt::TerminalApp::implementation
         void SetPersistedLayoutIdx(const uint32_t idx);
         void SetNumberOfOpenWindows(const uint64_t num);
         bool IsQuakeWindow() const noexcept;
+        void RequestExitFullscreen();
 
         Windows::Foundation::Size GetLaunchDimensions(uint32_t dpi);
         bool CenterOnLaunch();
diff --git a/src/cascadia/TerminalApp/AppLogic.idl b/src/cascadia/TerminalApp/AppLogic.idl
index e6aa40788..973e8aa1a 100644
--- a/src/cascadia/TerminalApp/AppLogic.idl
+++ b/src/cascadia/TerminalApp/AppLogic.idl
@@ -74,6 +74,7 @@ namespace TerminalApp
         void SetPersistedLayoutIdx(UInt32 idx);
         void SetNumberOfOpenWindows(UInt64 num);
         void RenameFailed();
+        void RequestExitFullscreen();
         Boolean IsQuakeWindow();
 
         Windows.Foundation.Size GetLaunchDimensions(UInt32 dpi);
diff --git a/src/cascadia/TerminalApp/TerminalPage.cpp b/src/cascadia/TerminalApp/TerminalPage.cpp
index 03d798e8c..bd9787f04 100644
--- a/src/cascadia/TerminalApp/TerminalPage.cpp
+++ b/src/cascadia/TerminalApp/TerminalPage.cpp
@@ -2535,9 +2535,7 @@ namespace winrt::TerminalApp::implementation
     // - <none>
     void TerminalPage::ToggleFullscreen()
     {
-        _isFullscreen = !_isFullscreen;
-        _UpdateTabView();
-        _FullscreenChangedHandlers(*this, nullptr);
+        SetFullscreen(!_isFullscreen);
     }
 
     // Method Description:
@@ -2754,6 +2752,17 @@ namespace winrt::TerminalApp::implementation
         return _isAlwaysOnTop;
     }
 
+    void TerminalPage::SetFullscreen(bool newFullscreen)
+    {
+        if (_isFullscreen == newFullscreen)
+        {
+            return;
+        }
+        _isFullscreen = newFullscreen;
+        _UpdateTabView();
+        _FullscreenChangedHandlers(*this, nullptr);
+    }
+
     HRESULT TerminalPage::_OnNewConnection(const ConptyConnection& connection)
     {
         // We need to be on the UI thread in order for _OpenNewTab to run successfully.
diff --git a/src/cascadia/TerminalApp/TerminalPage.h b/src/cascadia/TerminalApp/TerminalPage.h
index 291efb6a7..cf9477d2e 100644
--- a/src/cascadia/TerminalApp/TerminalPage.h
+++ b/src/cascadia/TerminalApp/TerminalPage.h
@@ -83,6 +83,7 @@ namespace winrt::TerminalApp::implementation
         bool FocusMode() const;
         bool Fullscreen() const;
         bool AlwaysOnTop() const;
+        void SetFullscreen(bool);
 
         void SetStartupActions(std::vector<Microsoft::Terminal::Settings::Model::ActionAndArgs>& actions);
 
diff --git a/src/cascadia/WindowsTerminal/AppHost.cpp b/src/cascadia/WindowsTerminal/AppHost.cpp
index 849c4e804..544c33e55 100644
--- a/src/cascadia/WindowsTerminal/AppHost.cpp
+++ b/src/cascadia/WindowsTerminal/AppHost.cpp
@@ -84,6 +84,7 @@ AppHost::AppHost() noexcept :
     _window->WindowMoved({ this, &AppHost::_WindowMoved });
     _window->HotkeyPressed({ this, &AppHost::_GlobalHotkeyPressed });
     _window->SetAlwaysOnTop(_logic.GetInitialAlwaysOnTop());
+    _window->ShouldExitFullscreen({ &_logic, &winrt::TerminalApp::AppLogic::RequestExitFullscreen });
     _window->MakeWindow();
 
     _GetWindowLayoutRequestedToken = _windowManager.GetWindowLayoutRequested([this](auto&&, const winrt::Microsoft::Terminal::Remoting::GetWindowLayoutArgs& args) {
diff --git a/src/cascadia/WindowsTerminal/IslandWindow.cpp b/src/cascadia/WindowsTerminal/IslandWindow.cpp
index a28ccaa21..a9c2dbb4b 100644
--- a/src/cascadia/WindowsTerminal/IslandWindow.cpp
+++ b/src/cascadia/WindowsTerminal/IslandWindow.cpp
@@ -606,6 +606,15 @@ long IslandWindow::_calculateTotalSize(const bool isWidth, const long clientSize
         }
         break;
     }
+    case WM_SYSCOMMAND:
+    {
+        if (wparam == SC_RESTORE && _fullscreen)
+        {
+            _ShouldExitFullscreenHandlers();
+            return 0;
+        }
+        break;
+    }
     case WM_MENUCOMMAND:
     {
         _NotifyNotificationIconMenuItemSelectedHandlers((HMENU)lparam, (UINT)wparam);
diff --git a/src/cascadia/WindowsTerminal/IslandWindow.h b/src/cascadia/WindowsTerminal/IslandWindow.h
index 0ac7b1e0b..15d652551 100644
--- a/src/cascadia/WindowsTerminal/IslandWindow.h
+++ b/src/cascadia/WindowsTerminal/IslandWindow.h
@@ -73,6 +73,7 @@ public:
     WINRT_CALLBACK(NotifyShowNotificationIconContextMenu, winrt::delegate<void(til::point)>);
     WINRT_CALLBACK(NotifyNotificationIconMenuItemSelected, winrt::delegate<void(HMENU, UINT)>);
     WINRT_CALLBACK(NotifyReAddNotificationIcon, winrt::delegate<void()>);
+    WINRT_CALLBACK(ShouldExitFullscreen, winrt::delegate<void()>);
 
     WINRT_CALLBACK(WindowMoved, winrt::delegate<void()>);