diff --git a/packages/app/e2e/settings/settings-keybinds.spec.ts b/packages/app/e2e/settings/settings-keybinds.spec.ts
index eceb82b74..a8e7f3352 100644
--- a/packages/app/e2e/settings/settings-keybinds.spec.ts
+++ b/packages/app/e2e/settings/settings-keybinds.spec.ts
@@ -1,6 +1,6 @@
 import { test, expect } from "../fixtures"
 import { openSettings, closeDialog, withSession } from "../actions"
-import { keybindButtonSelector } from "../selectors"
+import { keybindButtonSelector, terminalSelector } from "../selectors"
 import { modKey } from "../utils"
 
 test("changing sidebar toggle keybind works", async ({ page, gotoSession }) => {
@@ -267,11 +267,14 @@ test("changing terminal toggle keybind works", async ({ page, gotoSession }) =>
 
   await closeDialog(page, dialog)
 
-  await page.keyboard.press(`${modKey}+Y`)
-  await page.waitForTimeout(100)
+  const terminal = page.locator(terminalSelector)
+  await expect(terminal).not.toBeVisible()
 
-  const pageStable = await page.evaluate(() => document.readyState === "complete")
-  expect(pageStable).toBe(true)
+  await page.keyboard.press(`${modKey}+Y`)
+  await expect(terminal).toBeVisible()
+
+  await page.keyboard.press(`${modKey}+Y`)
+  await expect(terminal).not.toBeVisible()
 })
 
 test("changing command palette keybind works", async ({ page, gotoSession }) => {
diff --git a/packages/app/src/components/terminal.tsx b/packages/app/src/components/terminal.tsx
index 64adc797c..3baafe511 100644
--- a/packages/app/src/components/terminal.tsx
+++ b/packages/app/src/components/terminal.tsx
@@ -3,6 +3,7 @@ import { ComponentProps, createEffect, createSignal, onCleanup, onMount, splitPr
 import { usePlatform } from "@/context/platform"
 import { useSDK } from "@/context/sdk"
 import { monoFontFamily, useSettings } from "@/context/settings"
+import { parseKeybind, matchKeybind } from "@/context/command"
 import { SerializeAddon } from "@/addons/serialize"
 import { LocalPTY } from "@/context/terminal"
 import { resolveThemeVariant, useTheme, withAlpha, type HexColor } from "@opencode-ai/ui/theme"
@@ -10,6 +11,8 @@ import { useLanguage } from "@/context/language"
 import { showToast } from "@opencode-ai/ui/toast"
 import { disposeIfDisposable, getHoveredLinkText, setOptionIfSupported } from "@/utils/runtime-adapters"
 
+const TOGGLE_TERMINAL_ID = "terminal.toggle"
+const DEFAULT_TOGGLE_TERMINAL_KEYBIND = "ctrl+`"
 export interface TerminalProps extends ComponentProps<"div"> {
   pty: LocalPTY
   onSubmit?: () => void
@@ -237,12 +240,11 @@ export const Terminal = (props: TerminalProps) => {
           return true
         }
 
-        // allow for ctrl-` to toggle terminal in parent
-        if (event.ctrlKey && key === "`") {
-          return true
-        }
+        // allow for toggle terminal keybinds in parent
+        const config = settings.keybinds.get(TOGGLE_TERMINAL_ID) ?? DEFAULT_TOGGLE_TERMINAL_KEYBIND
+        const keybinds = parseKeybind(config)
 
-        return false
+        return matchKeybind(keybinds, event)
       })
 
       const fit = new mod.FitAddon()