diff --git a/src/client/terminals/envCollectionActivation/service.ts b/src/client/terminals/envCollectionActivation/service.ts
index 68c098c4c928..b9a9fc17b3d5 100644
--- a/src/client/terminals/envCollectionActivation/service.ts
+++ b/src/client/terminals/envCollectionActivation/service.ts
@@ -243,7 +243,9 @@ export class TerminalEnvVarCollectionService implements IExtensionActivationServ
         envVarCollection.description = description;
 
         await this.trackTerminalPrompt(shell, resource, env);
-        await this.terminalDeactivateService.initializeScriptParams(shell);
+        await this.terminalDeactivateService.initializeScriptParams(shell).catch((ex) => {
+            traceError(`Failed to initialize deactivate script`, shell, ex);
+        });
     }
 
     private isPromptSet = new Map<number | undefined, boolean>();
diff --git a/src/test/interpreters/activation/terminalEnvVarCollectionService.unit.test.ts b/src/test/interpreters/activation/terminalEnvVarCollectionService.unit.test.ts
index 55e0b80d3e1e..daf3150fdbd0 100644
--- a/src/test/interpreters/activation/terminalEnvVarCollectionService.unit.test.ts
+++ b/src/test/interpreters/activation/terminalEnvVarCollectionService.unit.test.ts
@@ -341,6 +341,7 @@ suite('Terminal Environment Variable Collection Service', () => {
 
     test('Also prepend deactivate script location if available', async () => {
         reset(terminalDeactivateService);
+        when(terminalDeactivateService.initializeScriptParams(anything())).thenResolve();
         when(terminalDeactivateService.getScriptLocation(anything(), anything())).thenResolve('scriptLocation');
         const processEnv = { PATH: 'hello/1/2/3' };
         reset(environmentActivationService);
@@ -409,6 +410,7 @@ suite('Terminal Environment Variable Collection Service', () => {
 
     test('Prepend full PATH with separator otherwise', async () => {
         reset(terminalDeactivateService);
+        when(terminalDeactivateService.initializeScriptParams(anything())).thenResolve();
         when(terminalDeactivateService.getScriptLocation(anything(), anything())).thenResolve('scriptLocation');
         const processEnv = { PATH: 'hello/1/2/3' };
         reset(environmentActivationService);