diff --git a/src/os_unix.c b/src/os_unix.c
index fbe550d..9869d30 100644
--- a/src/os_unix.c
+++ b/src/os_unix.c
@@ -4054,38 +4054,48 @@
 
 #if !defined(USE_SYSTEM) || defined(FEAT_JOB_CHANNEL)
     static void
-set_child_environment(void)
+set_child_environment(long rows, long columns, char *term)
 {
 # ifdef HAVE_SETENV
     char	envbuf[50];
 # else
+    static char	envbuf_TERM[30];
     static char	envbuf_Rows[20];
+    static char	envbuf_Lines[20];
     static char	envbuf_Columns[20];
 # endif
 
     /* Simulate to have a dumb terminal (for now) */
 # ifdef HAVE_SETENV
-    setenv("TERM", "dumb", 1);
-    sprintf((char *)envbuf, "%ld", Rows);
+    setenv("TERM", term, 1);
+    sprintf((char *)envbuf, "%ld", rows);
     setenv("ROWS", (char *)envbuf, 1);
-    sprintf((char *)envbuf, "%ld", Rows);
+    sprintf((char *)envbuf, "%ld", rows);
     setenv("LINES", (char *)envbuf, 1);
-    sprintf((char *)envbuf, "%ld", Columns);
+    sprintf((char *)envbuf, "%ld", columns);
     setenv("COLUMNS", (char *)envbuf, 1);
 # else
     /*
      * Putenv does not copy the string, it has to remain valid.
      * Use a static array to avoid losing allocated memory.
      */
-    putenv("TERM=dumb");
-    sprintf(envbuf_Rows, "ROWS=%ld", Rows);
+    vim_snprintf(envbuf_Term, sizeof(envbuf_Term), "TERM=%s", term);
+    putenv(envbuf_Term);
+    vim_snprintf(envbuf_Rows, sizeof(envbuf_Rows), "ROWS=%ld", rows);
     putenv(envbuf_Rows);
-    sprintf(envbuf_Rows, "LINES=%ld", Rows);
-    putenv(envbuf_Rows);
-    sprintf(envbuf_Columns, "COLUMNS=%ld", Columns);
+    vim_snprintf(envbuf_Lines, sizeof(envbuf_Lines), "LINES=%ld", rows);
+    putenv(envbuf_Lines);
+    vim_snprintf(envbuf_Columns, sizeof(envbuf_Columns),
+						       "COLUMNS=%ld", columns);
     putenv(envbuf_Columns);
 # endif
 }
+
+    static void
+set_default_child_environment(void)
+{
+    set_child_environment(Rows, Columns, "dumb");
+}
 #endif
 
     int
@@ -4417,7 +4427,7 @@
 #  endif
 		}
 # endif
-		set_child_environment();
+		set_default_child_environment();
 
 		/*
 		 * stderr is only redirected when using the GUI, so that a
@@ -5090,7 +5100,7 @@
 
 #if defined(FEAT_JOB_CHANNEL) || defined(PROTO)
     void
-mch_start_job(char **argv, job_T *job, jobopt_T *options UNUSED)
+mch_start_job(char **argv, job_T *job, jobopt_T *options)
 {
     pid_t	pid;
     int		fd_in[2];	/* for stdin */
@@ -5200,7 +5210,15 @@
 	(void)setsid();
 # endif
 
-	set_child_environment();
+# ifdef FEAT_TERMINAL
+	if (options->jo_term_rows > 0)
+	    set_child_environment(
+		    (long)options->jo_term_rows,
+		    (long)options->jo_term_cols,
+		    "xterm");
+	else
+# endif
+	    set_default_child_environment();
 
 	if (use_null_for_in || use_null_for_out || use_null_for_err)
 	    null_fd = open("/dev/null", O_RDWR | O_EXTRA, 0);
diff --git a/src/structs.h b/src/structs.h
index 88e71b6..5a7f28b 100644
--- a/src/structs.h
+++ b/src/structs.h
@@ -1732,6 +1732,12 @@
     int		jo_id;
     char_u	jo_soe_buf[NUMBUFLEN];
     char_u	*jo_stoponexit;
+
+#ifdef FEAT_TERMINAL
+    /* when non-zero run the job in a terminal window of this size */
+    int		jo_term_rows;
+    int		jo_term_cols;
+#endif
 } jobopt_T;
 
 
diff --git a/src/terminal.c b/src/terminal.c
index 82aa2c2..ac5b7b8 100644
--- a/src/terminal.c
+++ b/src/terminal.c
@@ -184,6 +184,8 @@
 	opt.jo_io_buf[PART_OUT] = curbuf->b_fnum;
 	opt.jo_io_buf[PART_ERR] = curbuf->b_fnum;
 	opt.jo_set |= JO_OUT_BUF + (JO_OUT_BUF << (PART_ERR - PART_OUT));
+	opt.jo_term_rows = rows;
+	opt.jo_term_cols = cols;
 
 	term->tl_job = job_start(argvars, &opt);
     }
@@ -267,7 +269,11 @@
 	update_screen(0);
 	setcursor();
 	out_flush();
+	++no_mapping;
+	++allow_keys;
 	c = vgetc();
+	--no_mapping;
+	--allow_keys;
 
 	/* Catch keys that need to be handled as in Normal mode. */
 	switch (c)
@@ -331,6 +337,13 @@
     term_update_lines(wp);
 }
 
+    static void
+position_cursor(win_T *wp, VTermPos *pos)
+{
+    wp->w_wrow = MIN(pos->row, MAX(0, wp->w_height - 1));
+    wp->w_wcol = MIN(pos->col, MAX(0, wp->w_width - 1));
+}
+
 #ifdef WIN3264
 
 /**************************************
@@ -486,7 +499,7 @@
 }
 
     static int
-handle_moverect(VTermRect dest, VTermRect src, void *user)
+handle_moverect(VTermRect dest UNUSED, VTermRect src UNUSED, void *user)
 {
     term_T	*term = (term_T *)user;
 
@@ -496,7 +509,11 @@
 }
 
   static int
-handle_movecursor(VTermPos pos, VTermPos oldpos, int visible, void *user)
+handle_movecursor(
+	VTermPos pos,
+	VTermPos oldpos UNUSED,
+	int visible UNUSED,
+	void *user)
 {
     term_T	*term = (term_T *)user;
     win_T	*wp;
@@ -506,9 +523,7 @@
     {
 	if (wp->w_buffer == term->tl_buffer)
 	{
-	    /* TODO: limit to window size? */
-	    wp->w_wrow = pos.row;
-	    wp->w_wcol = pos.col;
+	    position_cursor(wp, &pos);
 	    if (wp == curwin)
 		is_current = TRUE;
 	}
@@ -527,8 +542,17 @@
 handle_resize(int rows, int cols, void *user)
 {
     term_T	*term = (term_T *)user;
+    win_T	*wp;
 
-    /* TODO: handle terminal resize. */
+    FOR_ALL_WINDOWS(wp)
+    {
+	if (wp->w_buffer == term->tl_buffer)
+	{
+	    win_setheight_win(rows, wp);
+	    win_setwidth_win(cols, wp);
+	}
+    }
+
     redraw_buf_later(term->tl_buffer, NOT_VALID);
     return 1;
 }
@@ -648,10 +672,23 @@
     int		vterm_cols;
     VTerm	*vterm = wp->w_buffer->b_term->tl_vterm;
     VTermScreen *screen = vterm_obtain_screen(vterm);
+    VTermState	*state = vterm_obtain_state(vterm);
     VTermPos	pos;
 
     vterm_get_size(vterm, &vterm_rows, &vterm_cols);
 
+    if (*wp->w_p_tms == NUL
+		  && (vterm_rows != wp->w_height || vterm_cols != wp->w_width))
+    {
+	vterm_set_size(vterm, wp->w_height, wp->w_width);
+	/* Get the size again, in case setting the didn't work. */
+	vterm_get_size(vterm, &vterm_rows, &vterm_cols);
+    }
+
+    /* The cursor may have been moved when resizing. */
+    vterm_state_get_cursorpos(state, &pos);
+    position_cursor(wp, &pos);
+
     /* TODO: Only redraw what changed. */
     for (pos.row = 0; pos.row < wp->w_height; ++pos.row)
     {
diff --git a/src/version.c b/src/version.c
index 5149be9..fc0f2da 100644
--- a/src/version.c
+++ b/src/version.c
@@ -770,6 +770,8 @@
 static int included_patches[] =
 {   /* Add new patch number below this line */
 /**/
+    739,
+/**/
     738,
 /**/
     737,