diff --git a/modules/term/eshell/config.el b/modules/term/eshell/config.el
index b9fa44350..9e348cc96 100644
--- a/modules/term/eshell/config.el
+++ b/modules/term/eshell/config.el
@@ -90,6 +90,7 @@ You should use `set-eshell-alias!' to change this.")
 
   ;; UI enhancements
   (add-hook! 'eshell-mode-hook
+    (setenv "TERM" "xterm-256color")
     (defun +eshell-remove-fringes-h ()
       (set-window-fringes nil 0 0)
       (set-window-margins nil 1 nil))