diff --git a/package.json b/package.json
index 0c3e4a41e53..99cc33f3dca 100644
--- a/package.json
+++ b/package.json
@@ -46,7 +46,7 @@
     "vscode-debugprotocol": "1.25.0",
     "vscode-ripgrep": "^0.7.1-patch.1.5",
     "vscode-textmate": "^3.2.0",
-    "vscode-xterm": "3.2.0-beta2",
+    "vscode-xterm": "3.2.0-beta3",
     "yauzl": "2.8.0"
   },
   "devDependencies": {
diff --git a/yarn.lock b/yarn.lock
index 26fd4be23c2..42b109ec6dd 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -6003,9 +6003,9 @@ vscode-textmate@^3.2.0:
     fast-plist "^0.1.2"
     oniguruma "^6.0.1"
 
-vscode-xterm@3.2.0-beta2:
-  version "3.2.0-beta2"
-  resolved "https://registry.yarnpkg.com/vscode-xterm/-/vscode-xterm-3.2.0-beta2.tgz#20e4094c1e6d4076e0fca5c109970d8efbc8e5c7"
+vscode-xterm@3.2.0-beta3:
+  version "3.2.0-beta3"
+  resolved "https://registry.yarnpkg.com/vscode-xterm/-/vscode-xterm-3.2.0-beta3.tgz#f82a54dd56f33b8875b68651cdcdd950317c8fb4"
 
 vso-node-api@^6.1.2-preview:
   version "6.1.2-preview"