diff --git a/.changeset/add-pi-web-terminal-environment.md b/.changeset/add-pi-web-terminal-environment.md
new file mode 100644
index 0000000..5fd24f2
--- /dev/null
+++ b/.changeset/add-pi-web-terminal-environment.md
@@ -0,0 +1,5 @@
+---
+"@jmfederico/pi-web": patch
+---
+
+Set `IS_PIWEB=1` in PI WEB terminal shells.
diff --git a/package.json b/package.json
index e84997d..67a68f9 100644
--- a/package.json
+++ b/package.json
@@ -140,5 +140,8 @@
       "./extensions"
     ],
     "image": "https://raw.githubusercontent.com/jmfederico/pi-web/main/docs/assets/pi-web-banner.png"
+  },
+  "allowScripts": {
+    "node-pty@1.1.0": true
   }
 }
diff --git a/src/server/terminals/terminalService.test.ts b/src/server/terminals/terminalService.test.ts
index 0b55d1a..3b314cf 100644
--- a/src/server/terminals/terminalService.test.ts
+++ b/src/server/terminals/terminalService.test.ts
@@ -22,6 +22,24 @@ describe.skipIf(process.platform === "win32")("TerminalService command runs", ()
     }
   });
 
+  it("sets IS_PIWEB for terminal commands", async () => {
+    const service = new TerminalService();
+    try {
+      const run = service.runCommand({
+        origin: "core",
+        projectId: "p1",
+        workspaceId: "w1",
+        cwd: process.cwd(),
+        title: "Environment check",
+        command: "printf '%s' \"$IS_PIWEB\"",
+      });
+
+      expect(await terminalExit(service, run.terminalId)).toContain("1");
+    } finally {
+      service.dispose();
+    }
+  });
+
   it("tracks dedicated terminal command runs through completion", async () => {
     const service = new TerminalService();
     try {
diff --git a/src/server/terminals/terminalService.ts b/src/server/terminals/terminalService.ts
index 63204ff..db26e34 100644
--- a/src/server/terminals/terminalService.ts
+++ b/src/server/terminals/terminalService.ts
@@ -163,7 +163,7 @@ export class TerminalService {
       cwd: record.cwd,
       cols: 100,
       rows: 30,
-      env: { ...process.env, TERM: "xterm-256color" },
+      env: { ...process.env, TERM: "xterm-256color", IS_PIWEB: "1" },
     });
     this.attachPtyEvents(record);
     const info = toInfo(record);
@@ -196,7 +196,7 @@ export class TerminalService {
       cwd: options.cwd,
       cols: options.cols ?? 100,
       rows: options.rows ?? 30,
-      env: { ...process.env, TERM: "xterm-256color" },
+      env: { ...process.env, TERM: "xterm-256color", IS_PIWEB: "1" },
     });
     const requestedName = options.name?.trim();
     const record: TerminalRecord = {