diff --git a/commands.go b/commands.go
index 5b627e2dc..d63b6d2b1 100644
--- a/commands.go
+++ b/commands.go
@@ -15,6 +15,7 @@ import (
 	"github.com/hashicorp/terraform/command/cliconfig"
 	"github.com/hashicorp/terraform/command/webbrowser"
 	"github.com/hashicorp/terraform/internal/getproviders"
+	"github.com/hashicorp/terraform/internal/terminal"
 	pluginDiscovery "github.com/hashicorp/terraform/plugin/discovery"
 )
 
@@ -48,6 +49,7 @@ var Ui cli.Ui
 
 func initCommands(
 	originalWorkingDir string,
+	streams *terminal.Streams,
 	config *cliconfig.Config,
 	services *disco.Disco,
 	providerSrc getproviders.Source,
diff --git a/main.go b/main.go
index 03a7ff663..5fd393b07 100644
--- a/main.go
+++ b/main.go
@@ -19,6 +19,7 @@ import (
 	"github.com/hashicorp/terraform/httpclient"
 	"github.com/hashicorp/terraform/internal/didyoumean"
 	"github.com/hashicorp/terraform/internal/logging"
+	"github.com/hashicorp/terraform/internal/terminal"
 	"github.com/hashicorp/terraform/version"
 	"github.com/mattn/go-shellwords"
 	"github.com/mitchellh/cli"
@@ -34,6 +35,12 @@ const (
 
 	// The parent process will create a file to collect crash logs
 	envTmpLogPath = "TF_TEMP_LOG_PATH"
+
+	// Environment variable name used for smuggling true stderr terminal
+	// settings into a panicwrap child process. This is an implementation
+	// detail, subject to change in future, and should not ever be directly
+	// set by an end-user.
+	envTerminalPanicwrapWorkaround = "TF_PANICWRAP_STDERR"
 )
 
 // ui wraps the primary output cli.Ui, and redirects Warn calls to Output
@@ -75,6 +82,22 @@ func realMain() int {
 		// store the path in the environment for the wrapped executable
 		os.Setenv(envTmpLogPath, logTempFile.Name())
 
+		// We also need to do our terminal initialization before we fork,
+		// because the child process doesn't necessarily have access to
+		// the true stderr in order to initialize it.
+		streams, err := terminal.Init()
+		if err != nil {
+			fmt.Fprintf(os.Stderr, "Failed to initialize terminal: %s", err)
+			return 1
+		}
+
+		// We need the child process to behave _as if_ connected to the real
+		// stderr, even though panicwrap is about to add a pipe in the way,
+		// so we'll smuggle the true stderr information in an environment
+		// varible.
+		streamState := streams.StateForAfterPanicWrap()
+		os.Setenv(envTerminalPanicwrapWorkaround, fmt.Sprintf("%t:%d", streamState.StderrIsTerminal, streamState.StderrWidth))
+
 		// Create the configuration for panicwrap and wrap our executable
 		wrapConfig.Handler = logging.PanicHandler(logTempFile.Name())
 		wrapConfig.IgnoreSignals = ignoreSignals
@@ -122,6 +145,39 @@ func wrappedMain() int {
 	log.Printf("[INFO] Go runtime version: %s", runtime.Version())
 	log.Printf("[INFO] CLI args: %#v", os.Args)
 
+	// This is the recieving end of our workaround to retain the metadata
+	// about the real stderr even though we're talking to it via the panicwrap
+	// pipe. See the call to StateForAfterPanicWrap above for the producer
+	// part of this.
+	var streamState *terminal.PrePanicwrapState
+	if raw := os.Getenv(envTerminalPanicwrapWorkaround); raw != "" {
+		streamState = &terminal.PrePanicwrapState{}
+		if _, err := fmt.Sscanf(raw, "%t:%d", &streamState.StderrIsTerminal, &streamState.StderrWidth); err != nil {
+			log.Printf("[WARN] %s is set but is incorrectly-formatted: %s", envTerminalPanicwrapWorkaround, err)
+			streamState = nil // leave it unset for a normal init, then
+		}
+	}
+	streams, err := terminal.ReinitInsidePanicwrap(streamState)
+	if err != nil {
+		Ui.Error(fmt.Sprintf("Failed to configure the terminal: %s", err))
+		return 1
+	}
+	if streams.Stdout.IsTerminal() {
+		log.Printf("[TRACE] Stdout is a terminal of width %d", streams.Stdout.Columns())
+	} else {
+		log.Printf("[TRACE] Stdout is not a terminal")
+	}
+	if streams.Stderr.IsTerminal() {
+		log.Printf("[TRACE] Stderr is a terminal of width %d", streams.Stderr.Columns())
+	} else {
+		log.Printf("[TRACE] Stderr is not a terminal")
+	}
+	if streams.Stdin.IsTerminal() {
+		log.Printf("[TRACE] Stdin is a terminal")
+	} else {
+		log.Printf("[TRACE] Stdin is not a terminal")
+	}
+
 	// NOTE: We're intentionally calling LoadConfig _before_ handling a possible
 	// -chdir=... option on the command line, so that a possible relative
 	// path in the TERRAFORM_CONFIG_FILE environment variable (though probably
@@ -235,7 +291,7 @@ func wrappedMain() int {
 		// in case they need to refer back to it for any special reason, though
 		// they should primarily be working with the override working directory
 		// that we've now switched to above.
-		initCommands(originalWd, config, services, providerSrc, providerDevOverrides, unmanagedProviders)
+		initCommands(originalWd, streams, config, services, providerSrc, providerDevOverrides, unmanagedProviders)
 	}
 
 	// Run checkpoint