diff --git a/tests/debug/__init__.py b/tests/debug/__init__.py
index 5e5995d6..d721c7b6 100644
--- a/tests/debug/__init__.py
+++ b/tests/debug/__init__.py
@@ -4,9 +4,5 @@
 
 from __future__ import absolute_import, division, print_function, unicode_literals
 
-
 # Expose Session directly.
-def Session(*args, **kwargs):
-    from tests.debug import session
-
-    return session.Session(*args, **kwargs)
+from tests.debug.session import Session  # noqa
diff --git a/tests/debug/session.py b/tests/debug/session.py
index 2081ee6e..2b391063 100644
--- a/tests/debug/session.py
+++ b/tests/debug/session.py
@@ -484,6 +484,12 @@ class Session(object):
                 pid, fmt("{0}-subprocess-{1}", self.debuggee_id, pid)
             )
 
+    def run_in_terminal(self, args, cwd, env):
+        exe = args.pop(0)
+        self.spawn_debuggee.env.update(env)
+        self.spawn_debuggee(args, cwd, exe=exe)
+        return {}
+
     def _process_request(self, request):
         self.timeline.record_request(request, block=False)
         if request.command == "runInTerminal":
@@ -491,11 +497,8 @@ class Session(object):
             cwd = request("cwd", ".")
             env = request("env", json.object(unicode))
             try:
-                exe = args.pop(0)
-                self.spawn_debuggee.env.update(env)
-                self.spawn_debuggee(args, cwd, exe=exe)
-                return {}
-            except OSError as exc:
+                return self.run_in_terminal(args, cwd, env)
+            except Exception as exc:
                 log.swallow_exception('"runInTerminal" failed:')
                 raise request.cant_handle(str(exc))
         else:
diff --git a/tests/debugpy/test_args.py b/tests/debugpy/test_args.py
index 6a74b97f..d8d728de 100644
--- a/tests/debugpy/test_args.py
+++ b/tests/debugpy/test_args.py
@@ -31,3 +31,37 @@ def test_args(pyfile, target, run):
             pass
         argv = backchannel.receive()
         assert argv == [some.str] + args
+
+
+@pytest.mark.parametrize("target", targets.all)
+@pytest.mark.parametrize("run", runners.all_launch)
+def test_shell_expansion(pyfile, target, run):
+    @pyfile
+    def code_to_debug():
+        import sys
+        import debuggee
+        from debuggee import backchannel
+
+        debuggee.setup()
+        backchannel.send(sys.argv)
+
+    def expand(args):
+        for i, arg in enumerate(args):
+            if arg.startswith("$"):
+                args[i] = arg[1:]
+
+    class Session(debug.Session):
+        def run_in_terminal(self, args, cwd, env):
+            expand(args)
+            return super(Session, self).run_in_terminal(args, cwd, env)
+
+    args = ["0", "$1", "2"]
+    with Session() as session:
+        backchannel = session.open_backchannel()
+        with run(session, target(code_to_debug, args=args)):
+            pass
+        argv = backchannel.receive()
+
+    if session.config["console"] != "internalConsole":
+        expand(args)
+    assert argv == [some.str] + args