diff --git a/extensions/eclipse-che-theia-terminal/src/browser/contribution/exec-terminal-contribution.ts b/extensions/eclipse-che-theia-terminal/src/browser/contribution/exec-terminal-contribution.ts
index 06d9970b2..ba15478a5 100755
--- a/extensions/eclipse-che-theia-terminal/src/browser/contribution/exec-terminal-contribution.ts
+++ b/extensions/eclipse-che-theia-terminal/src/browser/contribution/exec-terminal-contribution.ts
@@ -19,9 +19,10 @@ import { MenuBar as MenuBarWidget } from '@phosphor/widgets';
 import { TerminalKeybindingContext } from './keybinding-context';
 import { CHEWorkspaceService } from '../../common/workspace-service';
 import { TerminalWidget, TerminalWidgetOptions } from '@theia/terminal/lib/browser/base/terminal-widget';
-import { REMOTE_TERMINAL_WIDGET_FACTORY_ID } from '../terminal-widget/remote-terminal-widget';
+import { REMOTE_TERMINAL_WIDGET_FACTORY_ID, RemoteTerminalWidget, RemoteTerminalWidgetFactoryOptions } from '../terminal-widget/remote-terminal-widget';
 import { filterRecipeContainers } from './terminal-command-filter';
 import URI from '@theia/core/lib/common/uri';
+import { EnvVariablesServer } from '@theia/core/lib/common/env-variables';
 
 export const NewTerminalInSpecificContainer = {
     id: 'terminal-in-specific-container:new',
@@ -50,7 +51,11 @@ export class ExecTerminalFrontendContribution extends TerminalFrontendContributi
     @inject(CHEWorkspaceService)
     protected readonly cheWorkspaceService: CHEWorkspaceService;
 
+    @inject(EnvVariablesServer)
+    protected readonly baseEnvVariablesServer: EnvVariablesServer;
+
     private readonly mainMenuId = 'theia:menubar';
+    private editorContainerName;
 
     async registerCommands(registry: CommandRegistry) {
         const serverUrl = <URI | undefined>await this.termApiEndPointProvider();
@@ -86,12 +91,45 @@ export class ExecTerminalFrontendContribution extends TerminalFrontendContributi
         }
     }
 
+    public async newTerminalPerContainer(containerName: string, options?: TerminalWidgetOptions): Promise<TerminalWidget> {
+        try {
+            const workspaceId = <string>await this.baseEnvVariablesServer.getValue('CHE_WORKSPACE_ID').then(v => v ? v.value : undefined);
+            const termApiEndPoint = <URI | undefined>await this.termApiEndPointProvider();
+
+            const widget = <RemoteTerminalWidget>await this.widgetManager.getOrCreateWidget(REMOTE_TERMINAL_WIDGET_FACTORY_ID, <RemoteTerminalWidgetFactoryOptions>{
+                created: new Date().toString(),
+                machineName: containerName,
+                workspaceId: workspaceId,
+                endpoint: termApiEndPoint.toString(true),
+                ...options
+            });
+            return widget;
+        } catch (err) {
+            console.error('Failed to create terminal widget. Cause: ', err);
+        }
+        throw new Error('Unable to create new terminal for machine: ' + containerName);
+    }
+
     async openTerminalByContainerName(containerName: string): Promise<void> {
-        const termWidget = await this.terminalQuickOpen.newTerminalPerContainer(containerName, {});
-        this.open(termWidget, {});
+        const editorContainer = await this.getEditorContainerName();
+        let cwd: string;
+        // use information about volumes to cover cwd for development containers too. Depends on https://github.com/eclipse/che/issues/13290
+        if (containerName === editorContainer) {
+            cwd = await this.selectTerminalCwd();
+        }
+
+        const termWidget = await this.newTerminalPerContainer(containerName, { cwd });
+        this.open(termWidget);
         termWidget.start();
     }
 
+    async getEditorContainerName() {
+        if (!this.editorContainerName) {
+            this.editorContainerName = await this.cheWorkspaceService.findEditorMachineName();
+        }
+        return this.editorContainerName;
+    }
+
     async newTerminal(options: TerminalWidgetOptions): Promise<TerminalWidget> {
         let containerName;
 
@@ -100,11 +138,11 @@ export class ExecTerminalFrontendContribution extends TerminalFrontendContributi
         }
 
         if (!containerName) {
-            containerName = await this.cheWorkspaceService.findEditorMachineName();
+            containerName = await this.getEditorContainerName();
         }
 
         if (containerName) {
-            const termWidget = await this.terminalQuickOpen.newTerminalPerContainer(containerName, options);
+            const termWidget = await this.newTerminalPerContainer(containerName, options);
             return termWidget;
         }
 
diff --git a/extensions/eclipse-che-theia-terminal/src/browser/contribution/terminal-quick-open.ts b/extensions/eclipse-che-theia-terminal/src/browser/contribution/terminal-quick-open.ts
index a61de346b..7053625eb 100755
--- a/extensions/eclipse-che-theia-terminal/src/browser/contribution/terminal-quick-open.ts
+++ b/extensions/eclipse-che-theia-terminal/src/browser/contribution/terminal-quick-open.ts
@@ -9,17 +9,14 @@
  **********************************************************************/
 
 import { injectable, inject } from 'inversify';
-import { QuickOpenModel, QuickOpenItem, QuickOpenHandler, QuickOpenService } from '@theia/core/lib/browser/quick-open/';
-import { QuickOpenMode, QuickOpenOptions, WidgetManager, ApplicationShell, KeybindingRegistry } from '@theia/core/lib/browser';
-import { EnvVariablesServer } from '@theia/core/lib/common/env-variables';
-import { REMOTE_TERMINAL_WIDGET_FACTORY_ID, RemoteTerminalWidgetFactoryOptions } from '../terminal-widget/remote-terminal-widget';
+import {
+    QuickOpenMode, QuickOpenOptions, ApplicationShell, KeybindingRegistry,
+    QuickOpenModel, QuickOpenItem, QuickOpenHandler, QuickOpenService
+} from '@theia/core/lib/browser';
 import { CHEWorkspaceService } from '../../common/workspace-service';
 import { TerminalApiEndPointProvider } from '../server-definition/terminal-proxy-creator';
-import { TerminalWidget, TerminalWidgetOptions } from '@theia/terminal/lib/browser/base/terminal-widget';
-import { RemoteTerminalWidget } from '../terminal-widget/remote-terminal-widget';
 import { OpenTerminalHandler } from './exec-terminal-contribution';
 import { filterRecipeContainers } from './terminal-command-filter';
-import URI from '@theia/core/lib/common/uri';
 
 @injectable()
 export class TerminalQuickOpenService implements QuickOpenHandler, QuickOpenModel {
@@ -32,12 +29,6 @@ export class TerminalQuickOpenService implements QuickOpenHandler, QuickOpenMode
     @inject(QuickOpenService)
     private readonly quickOpenService: QuickOpenService;
 
-    @inject(WidgetManager)
-    private readonly widgetManager: WidgetManager;
-
-    @inject(EnvVariablesServer)
-    protected readonly baseEnvVariablesServer: EnvVariablesServer;
-
     @inject('TerminalApiEndPointProvider')
     protected readonly termApiEndPointProvider: TerminalApiEndPointProvider;
 
@@ -53,25 +44,6 @@ export class TerminalQuickOpenService implements QuickOpenHandler, QuickOpenMode
     @inject('terminal-in-specific-container-command-id')
     protected readonly terminalInSpecificContainerCommandId: string;
 
-    public async newTerminalPerContainer(containerName: string, options?: TerminalWidgetOptions): Promise<TerminalWidget> {
-        try {
-            const workspaceId = <string>await this.baseEnvVariablesServer.getValue('CHE_WORKSPACE_ID').then(v => v ? v.value : undefined);
-            const termApiEndPoint = <URI | undefined>await this.termApiEndPointProvider();
-
-            const widget = <RemoteTerminalWidget>await this.widgetManager.getOrCreateWidget(REMOTE_TERMINAL_WIDGET_FACTORY_ID, <RemoteTerminalWidgetFactoryOptions>{
-                created: new Date().toString(),
-                machineName: containerName,
-                workspaceId: workspaceId,
-                endpoint: termApiEndPoint.toString(true),
-                ...options
-            });
-            return widget;
-        } catch (err) {
-            console.error('Failed to create terminal widget. Cause: ', err);
-        }
-        throw new Error('Unable to create new terminal for machine: ' + containerName);
-    }
-
     async displayListMachines(doOpen: OpenTerminalHandler) {
         const items: QuickOpenItem[] = [];
 
diff --git a/extensions/eclipse-che-theia-terminal/src/browser/terminal-widget/remote-terminal-widget.ts b/extensions/eclipse-che-theia-terminal/src/browser/terminal-widget/remote-terminal-widget.ts
index 89af9f97d..00e5af0e3 100644
--- a/extensions/eclipse-che-theia-terminal/src/browser/terminal-widget/remote-terminal-widget.ts
+++ b/extensions/eclipse-che-theia-terminal/src/browser/terminal-widget/remote-terminal-widget.ts
@@ -174,6 +174,7 @@ export class RemoteTerminalWidget extends TerminalWidgetImpl {
                 workspaceId: this.options.workspaceId
             },
             cmd: cmd,
+            cwd: this.options.cwd,
             cols,
             rows,
             tty: true,