diff --git a/src/cascadia/TerminalApp/AppLogic.cpp b/src/cascadia/TerminalApp/AppLogic.cpp
index 2f7a49ef0ab..6657efb67ca 100644
--- a/src/cascadia/TerminalApp/AppLogic.cpp
+++ b/src/cascadia/TerminalApp/AppLogic.cpp
@@ -703,6 +703,16 @@ namespace winrt::TerminalApp::implementation
                globals.MinimizeToNotificationArea();
     }
 
+    bool AppLogic::AllowHeadless()
+    {
+        if (!_loadedInitialSettings)
+        {
+            // Load settings if we haven't already
+            ReloadSettings();
+        }
+        return _settings.GlobalSettings().AllowHeadless();
+    }
+
     TerminalApp::TerminalWindow AppLogic::CreateNewWindow()
     {
         if (_settings == nullptr)
diff --git a/src/cascadia/TerminalApp/AppLogic.h b/src/cascadia/TerminalApp/AppLogic.h
index f5a206b1826..c3bbf12f5fe 100644
--- a/src/cascadia/TerminalApp/AppLogic.h
+++ b/src/cascadia/TerminalApp/AppLogic.h
@@ -67,6 +67,7 @@ namespace winrt::TerminalApp::implementation
 
         Microsoft::Terminal::Settings::Model::Theme Theme();
         bool IsolatedMode();
+        bool AllowHeadless();
         bool RequestsTrayIcon();
 
         TerminalApp::TerminalWindow CreateNewWindow();
diff --git a/src/cascadia/TerminalApp/AppLogic.idl b/src/cascadia/TerminalApp/AppLogic.idl
index 5eac395390f..cb5c920bbee 100644
--- a/src/cascadia/TerminalApp/AppLogic.idl
+++ b/src/cascadia/TerminalApp/AppLogic.idl
@@ -46,6 +46,7 @@ namespace TerminalApp
         // Selected settings to expose
         Microsoft.Terminal.Settings.Model.Theme Theme { get; };
         Boolean IsolatedMode { get; };
+        Boolean AllowHeadless { get; };
         Boolean RequestsTrayIcon { get; };
 
         FindTargetWindowResult FindTargetWindow(String[] args);
diff --git a/src/cascadia/TerminalSettingsModel/GlobalAppSettings.idl b/src/cascadia/TerminalSettingsModel/GlobalAppSettings.idl
index 5a32d3eebf0..a9745cf7804 100644
--- a/src/cascadia/TerminalSettingsModel/GlobalAppSettings.idl
+++ b/src/cascadia/TerminalSettingsModel/GlobalAppSettings.idl
@@ -99,6 +99,7 @@ namespace Microsoft.Terminal.Settings.Model
         INHERITABLE_SETTING(IVector<NewTabMenuEntry>, NewTabMenu);
         INHERITABLE_SETTING(Boolean, EnableColorSelection);
         INHERITABLE_SETTING(Boolean, IsolatedMode);
+        INHERITABLE_SETTING(Boolean, AllowHeadless);
 
         Windows.Foundation.Collections.IMapView<String, ColorScheme> ColorSchemes();
         void AddColorScheme(ColorScheme scheme);
diff --git a/src/cascadia/TerminalSettingsModel/MTSMSettings.h b/src/cascadia/TerminalSettingsModel/MTSMSettings.h
index 798505de23d..84a6002d0ee 100644
--- a/src/cascadia/TerminalSettingsModel/MTSMSettings.h
+++ b/src/cascadia/TerminalSettingsModel/MTSMSettings.h
@@ -64,6 +64,7 @@ Author(s):
     X(bool, TrimPaste, "trimPaste", true)                                                                                                                                                             \
     X(bool, EnableColorSelection, "experimental.enableColorSelection", false)                                                                                                                         \
     X(winrt::Windows::Foundation::Collections::IVector<Model::NewTabMenuEntry>, NewTabMenu, "newTabMenu", winrt::single_threaded_vector<Model::NewTabMenuEntry>({ Model::RemainingProfilesEntry{} })) \
+    X(bool, AllowHeadless, "compatibility.allowHeadless", false)                                                                                                                                      \
     X(bool, IsolatedMode, "compatibility.isolatedMode", false)
 
 #define MTSM_PROFILE_SETTINGS(X)                                                                                                                               \
diff --git a/src/cascadia/WindowsTerminal/WindowEmperor.cpp b/src/cascadia/WindowsTerminal/WindowEmperor.cpp
index eff02340176..4deeb38899e 100644
--- a/src/cascadia/WindowsTerminal/WindowEmperor.cpp
+++ b/src/cascadia/WindowsTerminal/WindowEmperor.cpp
@@ -117,7 +117,8 @@ void WindowEmperor::_createNewWindowThread(const Remoting::WindowRequestedArgs&
     _windowStartedHandlerPreXAML();
 
     std::thread t([weakThis, window]() {
-        try {
+        try
+        {
             const auto cleanup = wil::scope_exit([&]() {
                 if (auto self{ weakThis.lock() })
                 {
@@ -133,7 +134,8 @@ void WindowEmperor::_createNewWindowThread(const Remoting::WindowRequestedArgs&
             }
 
             window->RunMessagePump();
-        } CATCH_LOG()
+        }
+        CATCH_LOG()
     });
     LOG_IF_FAILED(SetThreadDescription(t.native_handle(), L"Window Thread"));
 
@@ -192,7 +194,12 @@ void WindowEmperor::_windowExitedHandler(uint64_t senderID)
                       return w->Peasant().GetID() == senderID;
                   });
 
-    if (_windowThreadInstances.fetch_sub(1, std::memory_order_relaxed) == 1)
+    // When we run out of windows, exit our process if and only if:
+    // * We're not allowed to run headless OR
+    // * we've explicitly been told to "quit", which should fully exit the Terminal.
+    const bool quitWhenLastWindowExits{ !_app.Logic().AllowHeadless() };
+    if ((_windowThreadInstances.fetch_sub(1, std::memory_order_relaxed) == 1) && // no more windows
+        (_quitting || quitWhenLastWindowExits))
     {
         _close();
     }
@@ -287,6 +294,8 @@ void WindowEmperor::_numberOfWindowsChanged(const winrt::Windows::Foundation::II
 void WindowEmperor::_quitAllRequested(const winrt::Windows::Foundation::IInspectable&,
                                       const winrt::Microsoft::Terminal::Remoting::QuitAllRequestedArgs& args)
 {
+    _quitting = true;
+
     // Make sure that the current timer is destroyed so that it doesn't attempt
     // to run while we are in the middle of quitting.
     if (_getWindowLayoutThrottler.has_value())
diff --git a/src/cascadia/WindowsTerminal/WindowEmperor.h b/src/cascadia/WindowsTerminal/WindowEmperor.h
index d82b5a4a804..b2173a16ce0 100644
--- a/src/cascadia/WindowsTerminal/WindowEmperor.h
+++ b/src/cascadia/WindowsTerminal/WindowEmperor.h
@@ -52,8 +52,11 @@ class WindowEmperor : public std::enable_shared_from_this<WindowEmperor>
 
     std::unique_ptr<NotificationIcon> _notificationIcon;
 
+    bool _quitting{ false };
+
     void _windowStartedHandlerPreXAML();
     void _windowStartedHandlerPostXAML(const std::shared_ptr<WindowThread>& sender);
+
     void _windowExitedHandler(uint64_t senderID);
 
     void _becomeMonarch();