diff --git a/plugins/terminal/src/org/jetbrains/plugins/terminal/TerminalView.java b/plugins/terminal/src/org/jetbrains/plugins/terminal/TerminalView.java
index aaa8b78a49f4..68e9b8cbc0fe 100644
--- a/plugins/terminal/src/org/jetbrains/plugins/terminal/TerminalView.java
+++ b/plugins/terminal/src/org/jetbrains/plugins/terminal/TerminalView.java
@@ -447,8 +447,9 @@ public final class TerminalView implements Disposable {
 
   public void openTerminalIn(@Nullable VirtualFile fileToOpen) {
     TerminalTabState state = new TerminalTabState();
-    if (fileToOpen != null) {
-      state.myWorkingDirectory = fileToOpen.getPath();
+    VirtualFile parentDirectory = fileToOpen != null ? fileToOpen.getParent() : null;
+    if (parentDirectory != null) {
+      state.myWorkingDirectory = parentDirectory.getPath();
     }
     createNewSession(myTerminalRunner, state);
   }