diff --git a/npm-shrinkwrap.json b/npm-shrinkwrap.json
index 1112f9fcfdb..fd2a06ef420 100644
--- a/npm-shrinkwrap.json
+++ b/npm-shrinkwrap.json
@@ -567,9 +567,9 @@
       "resolved": "https://registry.npmjs.org/winreg/-/winreg-1.2.0.tgz"
     },
     "xterm": {
-      "version": "2.8.1",
-      "from": "Tyriar/xterm.js#vscode-release/1.15",
-      "resolved": "git+https://github.com/Tyriar/xterm.js.git#75ffea5ebd5510ad0478b017c3946cb8d504855f"
+      "version": "2.9.1",
+      "from": "Tyriar/xterm.js#vscode-release/1.16",
+      "resolved": "git+https://github.com/Tyriar/xterm.js.git#ec8e705ffef18ec9f90e27baff30105b0278b3bb"
     },
     "yauzl": {
       "version": "2.8.0",
diff --git a/package.json b/package.json
index 5c0a1adc7e9..13c7d4e58a4 100644
--- a/package.json
+++ b/package.json
@@ -44,7 +44,7 @@
     "vscode-ripgrep": "0.0.25",
     "vscode-textmate": "^3.1.5",
     "winreg": "1.2.0",
-    "xterm": "Tyriar/xterm.js#vscode-release/1.15",
+    "xterm": "Tyriar/xterm.js#vscode-release/1.16",
     "yauzl": "2.8.0"
   },
   "devDependencies": {