diff --git a/cmd-respawn-pane.c b/cmd-respawn-pane.c
index defdc77e..a1178147 100644
--- a/cmd-respawn-pane.c
+++ b/cmd-respawn-pane.c
@@ -77,7 +77,7 @@ cmd_respawn_pane_exec(struct cmd *self, struct cmdq_item *item)
 	if (envent != NULL)
 		path = envent->value;
 
-	env = environ_for_session(s);
+	env = environ_for_session(s, 0);
 	if (window_pane_spawn(wp, args->argc, args->argv, path, NULL, NULL, env,
 	    s->tio, &cause) != 0) {
 		cmdq_error(item, "respawn pane failed: %s", cause);
diff --git a/cmd-respawn-window.c b/cmd-respawn-window.c
index f9edbec7..48e6a97f 100644
--- a/cmd-respawn-window.c
+++ b/cmd-respawn-window.c
@@ -81,7 +81,7 @@ cmd_respawn_window_exec(struct cmd *self, struct cmdq_item *item)
 	if (envent != NULL)
 		path = envent->value;
 
-	env = environ_for_session(s);
+	env = environ_for_session(s, 0);
 	if (window_pane_spawn(wp, args->argc, args->argv, path, NULL, NULL, env,
 	    s->tio, &cause) != 0) {
 		cmdq_error(item, "respawn window failed: %s", cause);
diff --git a/cmd-split-window.c b/cmd-split-window.c
index 7de16ac2..029e6900 100644
--- a/cmd-split-window.c
+++ b/cmd-split-window.c
@@ -144,7 +144,7 @@ cmd_split_window_exec(struct cmd *self, struct cmdq_item *item)
 	if (envent != NULL)
 		path = envent->value;
 
-	env = environ_for_session(s);
+	env = environ_for_session(s, 0);
 	if (window_pane_spawn(new_wp, argc, argv, path, shell, cwd, env,
 	    s->tio, &cause) != 0) {
 		environ_free(env);
diff --git a/environ.c b/environ.c
index 868324ed..d884330e 100644
--- a/environ.c
+++ b/environ.c
@@ -222,7 +222,7 @@ environ_log(struct environ *env, const char *prefix)
 
 /* Create initial environment for new child. */
 struct environ *
-environ_for_session(struct session *s)
+environ_for_session(struct session *s, int no_TERM)
 {
 	struct environ	*env;
 	const char	*value;
@@ -233,8 +233,10 @@ environ_for_session(struct session *s)
 	if (s != NULL)
 		environ_copy(s->environ, env);
 
-	value = options_get_string(global_options, "default-terminal");
-	environ_set(env, "TERM", "%s", value);
+	if (!no_TERM) {
+		value = options_get_string(global_options, "default-terminal");
+		environ_set(env, "TERM", "%s", value);
+	}
 
 	if (s != NULL)
 		idx = s->id;
diff --git a/job.c b/job.c
index caf5db52..7065a671 100644
--- a/job.c
+++ b/job.c
@@ -55,7 +55,12 @@ job_run(const char *cmd, struct session *s, const char *cwd,
 	if (socketpair(AF_UNIX, SOCK_STREAM, PF_UNSPEC, out) != 0)
 		return (NULL);
 
-	env = environ_for_session(s);
+	/*
+	 * Do not set TERM during .tmux.conf, it is nice to be able to use
+	 * if-shell to decide on default-terminal based on outside TERM.
+	 */
+	env = environ_for_session(s, !cfg_finished);
+
 	switch (pid = fork()) {
 	case -1:
 		environ_free(env);
diff --git a/session.c b/session.c
index cb8ed1eb..eee478dd 100644
--- a/session.c
+++ b/session.c
@@ -360,7 +360,7 @@ session_new(struct session *s, const char *name, int argc, char **argv,
 		shell = _PATH_BSHELL;
 
 	hlimit = options_get_number(s->options, "history-limit");
-	env = environ_for_session(s);
+	env = environ_for_session(s, 0);
 	w = window_create_spawn(name, argc, argv, path, shell, cwd, env, s->tio,
 	    s->sx, s->sy, hlimit, cause);
 	if (w == NULL) {
diff --git a/tmux.h b/tmux.h
index 0e64b1bb..b9ee9516 100644
--- a/tmux.h
+++ b/tmux.h
@@ -1612,7 +1612,7 @@ void	environ_unset(struct environ *, const char *);
 void	environ_update(struct options *, struct environ *, struct environ *);
 void	environ_push(struct environ *);
 void	environ_log(struct environ *, const char *);
-struct environ *environ_for_session(struct session *);
+struct environ *environ_for_session(struct session *, int);
 
 /* tty.c */
 void	tty_create_log(void);