diff --git a/terminal/bundles/org.eclipse.terminal.view.ui/src/org/eclipse/terminal/view/ui/IPreferenceKeys.java b/terminal/bundles/org.eclipse.terminal.view.ui/src/org/eclipse/terminal/view/ui/IPreferenceKeys.java
index c09741cfec2..f4a78021b7e 100644
--- a/terminal/bundles/org.eclipse.terminal.view.ui/src/org/eclipse/terminal/view/ui/IPreferenceKeys.java
+++ b/terminal/bundles/org.eclipse.terminal.view.ui/src/org/eclipse/terminal/view/ui/IPreferenceKeys.java
@@ -60,13 +60,15 @@ public interface IPreferenceKeys {
 	public final String PREF_INITIAL_CWD_ECLIPSE_WS = "eclipsews"; //$NON-NLS-1$
 
 	/**
-	 * Preference key: Local terminal default shell command on Unix hosts.
+	 * Preference key: Local terminal default shell command.
+	 * Despite the name, this preference key is used regardless of the operating system.
 	 * @since 4.1
 	 */
 	public final String PREF_LOCAL_TERMINAL_DEFAULT_SHELL_UNIX = PREF_TERMINAL + ".localTerminalDefaultShellUnix"; //$NON-NLS-1$
 
 	/**
-	 * Preference key: Local terminal default shell command arguments on Unix hosts.
+	 * Preference key: Local terminal default shell command arguments.
+	 * Despite the name, this preference key is used regardless of the operating system.
 	 * @since 4.1
 	 */
 	public final String PREF_LOCAL_TERMINAL_DEFAULT_SHELL_UNIX_ARGS = PREF_TERMINAL
diff --git a/terminal/bundles/org.eclipse.terminal.view.ui/src/org/eclipse/terminal/view/ui/internal/preferences/PreferencePage.java b/terminal/bundles/org.eclipse.terminal.view.ui/src/org/eclipse/terminal/view/ui/internal/preferences/PreferencePage.java
index e3598438d6e..fb36a33f166 100644
--- a/terminal/bundles/org.eclipse.terminal.view.ui/src/org/eclipse/terminal/view/ui/internal/preferences/PreferencePage.java
+++ b/terminal/bundles/org.eclipse.terminal.view.ui/src/org/eclipse/terminal/view/ui/internal/preferences/PreferencePage.java
@@ -134,8 +134,7 @@ protected Control createContents(final Composite parent) {
 
 			String text = command.getText();
 			if (text != null && !"".equals(text.trim())) { //$NON-NLS-1$
-				IPath p = new Path(text.trim());
-				valid = p.toFile().isFile() && p.toFile().canRead() && p.toFile().canExecute();
+				valid = !resolveCommand(text).isEmpty();
 				if (!valid) {
 					message = Messages.PreferencePage_command_invalid;
 				}
@@ -655,11 +654,11 @@ public boolean performOk() {
 		ScopedPreferenceStore prefs = UIPlugin.getScopedPreferences();
 
 		String commandText = command.getText();
-		IPath commandPath = new Path(commandText.trim());
-		prefs.setValue(IPreferenceKeys.PREF_LOCAL_TERMINAL_DEFAULT_SHELL_UNIX,
-				commandPath.toFile().isFile() && commandPath.toFile().canRead() && commandPath.toFile().canExecute()
-						? commandPath.toOSString()
-						: ""); //$NON-NLS-1$
+		String commandPath = resolveCommand(commandText);
+		if (!commandPath.equals(commandText)) {
+			command.setText(commandPath);
+		}
+		prefs.setValue(IPreferenceKeys.PREF_LOCAL_TERMINAL_DEFAULT_SHELL_UNIX, commandPath);
 
 		commandText = arguments.getText();
 		prefs.setValue(IPreferenceKeys.PREF_LOCAL_TERMINAL_DEFAULT_SHELL_UNIX_ARGS,
@@ -695,6 +694,44 @@ public boolean performOk() {
 		return super.performOk();
 	}
 
+	private String resolveCommand(String commandText) {
+		String text = commandText.trim();
+		if (text.isEmpty()) {
+			return ""; //$NON-NLS-1$
+		}
+		IPath commandPath = new Path(text);
+		if (isValidExecutable(commandPath.toFile())) {
+			return commandPath.toOSString();
+		}
+
+		if (commandText.contains("/") || (Platform.OS_WIN32.equals(Platform.getOS()) && commandText.contains("\\"))) { //$NON-NLS-1$//$NON-NLS-2$
+			return ""; //$NON-NLS-1$
+		}
+
+		String path = System.getenv("PATH"); //$NON-NLS-1$
+		if (path == null) {
+			return ""; //$NON-NLS-1$
+		}
+
+		String[] splitted = path.split(Platform.OS_WIN32.equals(Platform.getOS()) ? ";" : ":"); //$NON-NLS-1$//$NON-NLS-2$
+		for (String element : splitted) {
+			File file = new File(element);
+			if (text.equals(file.getName()) && isValidExecutable(file)) {
+				return file.getAbsolutePath();
+			}
+			File executable = new File(file, text);
+			if (isValidExecutable(executable)) {
+				return executable.getAbsolutePath();
+			}
+		}
+
+		return ""; //$NON-NLS-1$
+	}
+
+	private boolean isValidExecutable(File file) {
+		return file.isFile() && file.canRead() && file.canExecute();
+	}
+
 	@Override
 	public void dispose() {
 		for (Image i : images.values()) {