Code change:
position: relative; } <del> .monaco-workbench .panel.integrated-terminal .xterm:focus { </del> <ins> .monaco-workbench .panel.integrated-terminal .xterm.focus { </ins> outline: none; } <del> .hc-black .monaco-workbench .panel.integrated-terminal .xterm:focus { </del> <ins> .hc-black .monaco-workbench .panel.integrated-terminal .xterm.focus { </ins> outline: 2px solid #f38518; } <ins> .monaco-workbench .panel.integrated-terminal .xterm .xterm-helpers { position: absolute; top: 0; } .monaco-workbench .panel.integrated-terminal .xterm .xterm-helper-textarea { position: absolute; /* * HACK: to fix IE's blinking cursor * Move textarea out of the screen to the far left, so that the cursor is not visible. */ left: -9999em; opacity: 0; width: 0; height: 0; z-index: -10; } </ins> .monaco-workbench .panel.integrated-terminal .reverse-video { color: #1e1e1e; } .vs-dark .monaco-workbench .panel.integrated-terminal .reverse-video { color: #CCC; } .hc-black .monaco-workbench .panel.integrated-terminal .reverse-video { color: #FFF; } <del> .monaco-workbench .panel.integrated-terminal .xterm:focus .terminal-cursor { background-color: #333; } .vs-dark .monaco-workbench .panel.integrated-terminal .xterm:focus .terminal-cursor { background-color: #CCC; } .hc-black .monaco-workbench .panel.integrated-terminal .xterm:focus .terminal-cursor { background-color: #FFF; } </del> <ins> .monaco-workbench .panel.integrated-terminal .xterm.focus .terminal-cursor { background-color: #333; } .vs-dark .monaco-workbench .panel.integrated-terminal .xterm.focus .terminal-cursor { background-color: #CCC; } .hc-black .monaco-workbench .panel.integrated-terminal .xterm.focus .terminal-cursor { background-color: #FFF; } </ins> <del> .monaco-workbench .panel.integrated-terminal .xterm:not(:focus) .terminal-cursor { </del> <ins> .monaco-workbench .panel.integrated-terminal .xterm:not(.focus) .terminal-cursor { </ins> background-color: transparent; outline: 1px solid #333; outline-offset: -1px; } <del> .vs-dark .monaco-workbench .panel.integrated-terminal .xterm:not(:focus) .terminal-cursor { </del> <ins> .vs-dark .monaco-workbench .panel.integrated-terminal .xterm:not(.focus) .terminal-cursor { </ins> background-color: transparent; outline: 1px solid #CCC; outline-offset: -1px; } <del> .hc-black .monaco-workbench .panel.integrated-terminal .xterm:not(:focus) .terminal-cursor { </del> <ins> .hc-black .monaco-workbench .panel.integrated-terminal .xterm:not(.focus) .terminal-cursor { </ins> background-color: transparent; outline: 1px solid #FFF; outline-offset: -1px; } <del> .monaco-workbench .panel.integrated-terminal .xterm:focus .terminal-cursor.blinking { animation: blink-cursor 1.2s infinite step-end; } .vs-dark .monaco-workbench .panel.integrated-terminal .xterm:focus .terminal-cursor.blinking { animation: blink-cursor-dark 1.2s infinite step-end; } .hc-black .monaco-workbench .panel.integrated-terminal .xterm:focus .terminal-cursor.blinking { animation: blink-cursor-hc-black 1.2s infinite step-end; } </del> <ins> .monaco-workbench .panel.integrated-terminal .xterm.focus .terminal-cursor.blinking { animation: blink-cursor 1.2s infinite step-end; } .vs-dark .monaco-workbench .panel.integrated-terminal .xterm.focus .terminal-cursor.blinking { animation: blink-cursor-dark 1.2s infinite step-end; } .hc-black .monaco-workbench .panel.integrated-terminal .xterm.focus .terminal-cursor.blinking { animation: blink-cursor-hc-black 1.2s infinite step-end; } </ins> @keyframes blink-cursor { 0% {

Related discussion:
text: VSCode Version: 1.2.0-insider OS Version: OS X El Capitan 10.11.5 Steps to Reproduce: by default settings !
Cannot type cyrillic as well
Upstream issue
This is one of the issues I want to focus on for v1.4