diff --git a/AK/Badge.h b/AK/Badge.h
new file mode 100644
index 00000000000..46ae8fbce98
--- /dev/null
+++ b/AK/Badge.h
@@ -0,0 +1,7 @@
+#pragma once
+
+template<typename T>
+class Badge {
+    friend T;
+    Badge() { }
+};
diff --git a/Kernel/CharacterDevice.cpp b/Kernel/CharacterDevice.cpp
index b76e6caba42..77ab998dd99 100644
--- a/Kernel/CharacterDevice.cpp
+++ b/Kernel/CharacterDevice.cpp
@@ -10,6 +10,10 @@ RetainPtr<FileDescriptor> CharacterDevice::open(int& error, int options)
     return VFS::the().open(*this, error, options);
 }
 
+void CharacterDevice::close()
+{
+}
+
 int CharacterDevice::ioctl(Process&, unsigned, unsigned)
 {
     return -ENOTTY;
diff --git a/Kernel/CharacterDevice.h b/Kernel/CharacterDevice.h
index c37cbf0600c..179a739e1df 100644
--- a/Kernel/CharacterDevice.h
+++ b/Kernel/CharacterDevice.h
@@ -14,6 +14,7 @@ public:
     InodeMetadata metadata() const { return { }; }
 
     virtual RetainPtr<FileDescriptor> open(int& error, int options);
+    virtual void close();
 
     virtual bool can_read(Process&) const = 0;
     virtual bool can_write(Process&) const = 0;
diff --git a/Kernel/DevPtsFS.cpp b/Kernel/DevPtsFS.cpp
index a59e31b6492..4deaac06e70 100644
--- a/Kernel/DevPtsFS.cpp
+++ b/Kernel/DevPtsFS.cpp
@@ -1,4 +1,5 @@
-#include "DevPtsFS.h"
+#include <Kernel/DevPtsFS.h>
+#include <Kernel/SlavePTY.h>
 #include <Kernel/VirtualFileSystem.h>
 #include <AK/StringBuilder.h>
 
diff --git a/Kernel/DevPtsFS.h b/Kernel/DevPtsFS.h
index 6c98e6e6395..94587e00311 100644
--- a/Kernel/DevPtsFS.h
+++ b/Kernel/DevPtsFS.h
@@ -1,10 +1,10 @@
 #pragma once
 
-#include "SlavePTY.h"
 #include <AK/Types.h>
 #include <Kernel/SyntheticFileSystem.h>
 
 class Process;
+class SlavePTY;
 
 class DevPtsFS final : public SynthFS {
 public:
diff --git a/Kernel/FileDescriptor.cpp b/Kernel/FileDescriptor.cpp
index 527eda23a79..d2b1fffcb48 100644
--- a/Kernel/FileDescriptor.cpp
+++ b/Kernel/FileDescriptor.cpp
@@ -40,8 +40,15 @@ FileDescriptor::FileDescriptor(RetainPtr<CharacterDevice>&& device)
 
 FileDescriptor::~FileDescriptor()
 {
-    if (m_fifo)
+    if (m_device) {
+        m_device->close();
+        m_device = nullptr;
+    }
+    if (m_fifo) {
         m_fifo->close(fifo_direction());
+        m_fifo = nullptr;
+    }
+    m_inode = nullptr;
 }
 
 RetainPtr<FileDescriptor> FileDescriptor::clone()
diff --git a/Kernel/FileDescriptor.h b/Kernel/FileDescriptor.h
index 77477d2423d..38195d4c1ea 100644
--- a/Kernel/FileDescriptor.h
+++ b/Kernel/FileDescriptor.h
@@ -86,5 +86,7 @@ private:
 
     RetainPtr<FIFO> m_fifo;
     FIFO::Direction m_fifo_direction { FIFO::Neither };
+
+    bool m_closed { false };
 };
 
diff --git a/Kernel/MasterPTY.cpp b/Kernel/MasterPTY.cpp
index 5a688072c47..2f6a90896ab 100644
--- a/Kernel/MasterPTY.cpp
+++ b/Kernel/MasterPTY.cpp
@@ -1,15 +1,18 @@
 #include "MasterPTY.h"
 #include "SlavePTY.h"
+#include "PTYMultiplexer.h"
+#include <LibC/errno_numbers.h>
 
 MasterPTY::MasterPTY(unsigned index)
     : CharacterDevice(10, index)
-    , m_slave(*new SlavePTY(*this, index))
+    , m_slave(adopt(*new SlavePTY(*this, index)))
     , m_index(index)
 {
 }
 
 MasterPTY::~MasterPTY()
 {
+    PTYMultiplexer::the().notify_master_destroyed(Badge<MasterPTY>(), m_index);
 }
 
 String MasterPTY::pts_name() const
@@ -19,17 +22,23 @@ String MasterPTY::pts_name() const
 
 ssize_t MasterPTY::read(Process&, byte* buffer, size_t size)
 {
+    if (!m_slave && m_buffer.is_empty())
+        return 0;
     return m_buffer.read(buffer, size);
 }
 
 ssize_t MasterPTY::write(Process&, const byte* buffer, size_t size)
 {
-    m_slave.on_master_write(buffer, size);
+    if (!m_slave)
+        return -EIO;
+    m_slave->on_master_write(buffer, size);
     return size;
 }
 
 bool MasterPTY::can_read(Process&) const
 {
+    if (!m_slave)
+        return true;
     return !m_buffer.is_empty();
 }
 
@@ -38,6 +47,15 @@ bool MasterPTY::can_write(Process&) const
     return true;
 }
 
+void MasterPTY::notify_slave_closed(Badge<SlavePTY>)
+{
+    dbgprintf("MasterPTY(%u): slave closed, my retains: %u, slave retains: %u\n", m_index, retain_count(), m_slave->retain_count());
+    // +1 retain for my MasterPTY::m_slave
+    // +1 retain for FileDescriptor::m_device
+    if (m_slave->retain_count() == 2)
+        m_slave = nullptr;
+}
+
 void MasterPTY::on_slave_write(const byte* data, size_t size)
 {
     m_buffer.write(data, size);
diff --git a/Kernel/MasterPTY.h b/Kernel/MasterPTY.h
index cc375feab68..29d71069277 100644
--- a/Kernel/MasterPTY.h
+++ b/Kernel/MasterPTY.h
@@ -1,7 +1,8 @@
 #pragma once
 
+#include <AK/Badge.h>
 #include <Kernel/CharacterDevice.h>
-#include "DoubleBuffer.h"
+#include <Kernel/DoubleBuffer.h>
 
 class SlavePTY;
 
@@ -21,12 +22,13 @@ public:
     String pts_name() const;
     void on_slave_write(const byte*, size_t);
     bool can_write_from_slave() const;
+    void notify_slave_closed(Badge<SlavePTY>);
 
 private:
     // ^CharacterDevice
     virtual const char* class_name() const override { return "MasterPTY"; }
 
-    SlavePTY& m_slave;
+    RetainPtr<SlavePTY> m_slave;
     unsigned m_index;
     DoubleBuffer m_buffer;
 };
diff --git a/Kernel/PTYMultiplexer.cpp b/Kernel/PTYMultiplexer.cpp
index 95da1b96a71..9d2a13e45b9 100644
--- a/Kernel/PTYMultiplexer.cpp
+++ b/Kernel/PTYMultiplexer.cpp
@@ -3,10 +3,23 @@
 #include <LibC/errno_numbers.h>
 
 static const unsigned s_max_pty_pairs = 8;
+static PTYMultiplexer* s_the;
+
+PTYMultiplexer& PTYMultiplexer::the()
+{
+    ASSERT(s_the);
+    return *s_the;
+}
+
+void PTYMultiplexer::initialize_statics()
+{
+    s_the = nullptr;
+}
 
 PTYMultiplexer::PTYMultiplexer()
     : CharacterDevice(5, 2)
 {
+    s_the = this;
     m_freelist.ensure_capacity(s_max_pty_pairs);
     for (int i = s_max_pty_pairs; i > 0; --i)
         m_freelist.unchecked_append(i - 1);
@@ -28,3 +41,10 @@ RetainPtr<FileDescriptor> PTYMultiplexer::open(int& error, int options)
     dbgprintf("PTYMultiplexer::open: Vending master %u\n", master->index());
     return VFS::the().open(move(master), error, options);
 }
+
+void PTYMultiplexer::notify_master_destroyed(Badge<MasterPTY>, unsigned index)
+{
+    LOCKER(m_lock);
+    m_freelist.append(index);
+    dbgprintf("PTYMultiplexer: %u added to freelist\n", index);
+}
diff --git a/Kernel/PTYMultiplexer.h b/Kernel/PTYMultiplexer.h
index ee338fd135a..c2062c2db74 100644
--- a/Kernel/PTYMultiplexer.h
+++ b/Kernel/PTYMultiplexer.h
@@ -1,6 +1,7 @@
 #pragma once
 
 #include <Kernel/CharacterDevice.h>
+#include <AK/Badge.h>
 #include <AK/Lock.h>
 
 class MasterPTY;
@@ -11,6 +12,9 @@ public:
     PTYMultiplexer();
     virtual ~PTYMultiplexer() override;
 
+    static PTYMultiplexer& the();
+    static void initialize_statics();
+
     // ^CharacterDevice
     virtual RetainPtr<FileDescriptor> open(int& error, int options) override;
     virtual ssize_t read(Process&, byte*, size_t) override { return 0; }
@@ -18,6 +22,8 @@ public:
     virtual bool can_read(Process&) const override { return true; }
     virtual bool can_write(Process&) const override { return true; }
 
+    void notify_master_destroyed(Badge<MasterPTY>, unsigned index);
+
 private:
     // ^CharacterDevice
     virtual const char* class_name() const override { return "PTYMultiplexer"; }
diff --git a/Kernel/Process.cpp b/Kernel/Process.cpp
index 61e388cc41f..13f892acab0 100644
--- a/Kernel/Process.cpp
+++ b/Kernel/Process.cpp
@@ -735,7 +735,7 @@ void Process::sys$exit(int status)
     kprintf("sys$exit: %s(%u) exit with status %d\n", name().characters(), pid(), status);
 #endif
 
-    set_state(Dead);
+    die();
     m_termination_status = status;
     m_termination_signal = 0;
 
@@ -750,7 +750,7 @@ void Process::terminate_due_to_signal(byte signal)
     dbgprintf("terminate_due_to_signal %s(%u) <- %u\n", name().characters(), pid(), signal);
     m_termination_status = 0;
     m_termination_signal = signal;
-    set_state(Dead);
+    die();
 }
 
 void Process::send_signal(byte signal, Process* sender)
@@ -935,8 +935,8 @@ void Process::crash()
     ASSERT_INTERRUPTS_DISABLED();
     ASSERT(state() != Dead);
     m_termination_signal = SIGSEGV;
-    set_state(Dead);
     dumpRegions();
+    die();
     Scheduler::pick_next_and_switch_now();
     ASSERT_NOT_REACHED();
 }
@@ -2130,3 +2130,9 @@ int Process::sys$chmod(const char* pathname, mode_t mode)
         return error;
     return 0;
 }
+
+void Process::die()
+{
+    set_state(Dead);
+    m_fds.clear();
+}
diff --git a/Kernel/Process.h b/Kernel/Process.h
index a92e4effec4..66f6676ce43 100644
--- a/Kernel/Process.h
+++ b/Kernel/Process.h
@@ -128,6 +128,7 @@ public:
 
     void setSelector(word s) { m_farPtr.selector = s; }
     void set_state(State s) { m_state = s; }
+    void die();
 
     pid_t sys$setsid();
     pid_t sys$getsid(pid_t);
@@ -315,7 +316,7 @@ private:
     struct FileDescriptorAndFlags {
         operator bool() const { return !!descriptor; }
         void clear() { descriptor = nullptr; flags = 0; }
-        void set(RetainPtr<FileDescriptor>&& d, dword f = 0) { descriptor = move(d), flags = f; }
+        void set(RetainPtr<FileDescriptor>&& d, dword f = 0) { descriptor = move(d); flags = f; }
         RetainPtr<FileDescriptor> descriptor;
         dword flags { 0 };
     };
diff --git a/Kernel/SlavePTY.cpp b/Kernel/SlavePTY.cpp
index 5e0c66541f5..9944a33a3a1 100644
--- a/Kernel/SlavePTY.cpp
+++ b/Kernel/SlavePTY.cpp
@@ -15,6 +15,7 @@ SlavePTY::SlavePTY(MasterPTY& master, unsigned index)
 SlavePTY::~SlavePTY()
 {
     DevPtsFS::the().unregister_slave_pty(*this);
+    VFS::the().unregister_character_device(*this);
 }
 
 String SlavePTY::tty_name() const
@@ -37,3 +38,8 @@ bool SlavePTY::can_write(Process&) const
 {
     return m_master.can_write_from_slave();
 }
+
+void SlavePTY::close()
+{
+    m_master.notify_slave_closed(Badge<SlavePTY>());
+}
diff --git a/Kernel/SlavePTY.h b/Kernel/SlavePTY.h
index 4d7fcaf1477..a2a95cf051c 100644
--- a/Kernel/SlavePTY.h
+++ b/Kernel/SlavePTY.h
@@ -22,6 +22,7 @@ private:
     // ^CharacterDevice
     virtual bool can_write(Process&) const override;
     virtual const char* class_name() const override { return "SlavePTY"; }
+    virtual void close() override;
 
     friend class MasterPTY;
     SlavePTY(MasterPTY&, unsigned index);
diff --git a/Kernel/VirtualFileSystem.cpp b/Kernel/VirtualFileSystem.cpp
index 5b187f92321..261fdc9493e 100644
--- a/Kernel/VirtualFileSystem.cpp
+++ b/Kernel/VirtualFileSystem.cpp
@@ -510,6 +510,11 @@ void VFS::register_character_device(CharacterDevice& device)
     m_character_devices.set(encodedDevice(device.major(), device.minor()), &device);
 }
 
+void VFS::unregister_character_device(CharacterDevice& device)
+{
+    m_character_devices.remove(encodedDevice(device.major(), device.minor()));
+}
+
 void VFS::for_each_mount(Function<void(const Mount&)> callback) const
 {
     for (auto& mount : m_mounts) {
diff --git a/Kernel/VirtualFileSystem.h b/Kernel/VirtualFileSystem.h
index 23d9c37a961..563a2e89e9f 100644
--- a/Kernel/VirtualFileSystem.h
+++ b/Kernel/VirtualFileSystem.h
@@ -72,6 +72,7 @@ public:
     bool chmod(const String& path, mode_t, Inode& base, int& error);
 
     void register_character_device(CharacterDevice&);
+    void unregister_character_device(CharacterDevice&);
 
     size_t mount_count() const { return m_mounts.size(); }
     void for_each_mount(Function<void(const Mount&)>) const;
diff --git a/Kernel/init.cpp b/Kernel/init.cpp
index 37d9bdde11d..0847c8c2432 100644
--- a/Kernel/init.cpp
+++ b/Kernel/init.cpp
@@ -142,6 +142,7 @@ void init()
     gdt_init();
     idt_init();
 
+    PTYMultiplexer::initialize_statics();
     VFS::initialize_globals();
     vfs = new VFS;
 
diff --git a/Terminal/main.cpp b/Terminal/main.cpp
index 34a3b7cd5ab..aabce8b0b1b 100644
--- a/Terminal/main.cpp
+++ b/Terminal/main.cpp
@@ -97,7 +97,10 @@ int main(int, char**)
                 perror("read(ptm)");
                 continue;
             }
-            assert(nread != 0);
+            if (nread == 0) {
+                dbgprintf("Terminal: EOF on master pty, closing.\n");
+                break;
+            }
             for (ssize_t i = 0; i < nread; ++i)
                 terminal.on_char(buffer[i]);
             terminal.update();