diff --git a/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts b/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
index a0396c822cd84..540c770e19f6b 100644
--- a/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
+++ b/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
@@ -1208,6 +1208,10 @@ export class TerminalInstance extends Disposable implements ITerminalInstance {
 	}
 
 	override dispose(reason?: TerminalExitReason): void {
+		if (this._isDisposed) {
+			return;
+		}
+		this._isDisposed = true;
 		this._logService.trace(`terminalInstance#dispose (instanceId: ${this.instanceId})`);
 		dispose(this._linkManager);
 		this._linkManager = undefined;
@@ -1224,7 +1228,13 @@ export class TerminalInstance extends Disposable implements ITerminalInstance {
 			this._horizontalScrollbar.dispose();
 			this._horizontalScrollbar = undefined;
 		}
-		this.xterm?.dispose();
+
+		try {
+			this.xterm?.dispose();
+		} catch (err: unknown) {
+			// See https://github.com/microsoft/vscode/issues/153486
+			this._logService.error('Exception occurred during xterm disposal', err);
+		}
 
 		// HACK: Workaround for Firefox bug https://bugzilla.mozilla.org/show_bug.cgi?id=559561,
 		// as 'blur' event in xterm.raw.textarea is not triggered on xterm.dispose()
@@ -1249,10 +1259,8 @@ export class TerminalInstance extends Disposable implements ITerminalInstance {
 		// hasn't happened yet
 		this._onProcessExit(undefined);
 
-		if (!this._isDisposed) {
-			this._isDisposed = true;
-			this._onDisposed.fire(this);
-		}
+		this._onDisposed.fire(this);
+
 		super.dispose();
 	}