diff --git a/hack/dockerfile/install/containerd.installer b/hack/dockerfile/install/containerd.installer
index 00a279bf38..2c0502e098 100755
--- a/hack/dockerfile/install/containerd.installer
+++ b/hack/dockerfile/install/containerd.installer
@@ -4,7 +4,7 @@
 # containerd is also pinned in vendor.conf. When updating the binary
 # version you may also need to update the vendor version to pick up bug
 # fixes or new APIs.
-CONTAINERD_COMMIT=773c489c9c1b21a6d78b5c538cd395416ec50f88 # v1.0.3
+CONTAINERD_COMMIT=395068d2b7256518259816ae19e45824b15da071 # v1.1.1-rc.0
 
 install_containerd() {
 	echo "Install containerd version $CONTAINERD_COMMIT"
diff --git a/libcontainerd/client_daemon.go b/libcontainerd/client_daemon.go
index b5701ed74b..a59dfbcd5d 100644
--- a/libcontainerd/client_daemon.go
+++ b/libcontainerd/client_daemon.go
@@ -294,7 +294,8 @@ func (c *client) Start(ctx context.Context, id, checkpointDir string, withStdin
 	t, err = ctr.ctr.NewTask(ctx,
 		func(id string) (cio.IO, error) {
 			fifos := newFIFOSet(ctr.bundleDir, InitProcessName, withStdin, spec.Process.Terminal)
-			rio, err = c.createIO(fifos, id, InitProcessName, stdinCloseSync, attachStdio)
+
+			rio, err = c.createIO(fifos, id, InitProcessName, stdinCloseSync, attachStdio, spec.Process.Terminal)
 			return rio, err
 		},
 		func(_ context.Context, _ *containerd.Client, info *containerd.TaskInfo) error {
@@ -365,7 +366,7 @@ func (c *client) Exec(ctx context.Context, containerID, processID string, spec *
 	}()
 
 	p, err = t.Exec(ctx, processID, spec, func(id string) (cio.IO, error) {
-		rio, err = c.createIO(fifos, containerID, processID, stdinCloseSync, attachStdio)
+		rio, err = c.createIO(fifos, containerID, processID, stdinCloseSync, attachStdio, spec.Terminal)
 		return rio, err
 	})
 	if err != nil {
@@ -644,8 +645,16 @@ func (c *client) getProcess(containerID, processID string) (containerd.Process,
 
 // createIO creates the io to be used by a process
 // This needs to get a pointer to interface as upon closure the process may not have yet been registered
-func (c *client) createIO(fifos *cio.FIFOSet, containerID, processID string, stdinCloseSync chan struct{}, attachStdio StdioCallback) (cio.IO, error) {
-	io, err := cio.NewDirectIO(context.Background(), fifos)
+func (c *client) createIO(fifos *cio.FIFOSet, containerID, processID string, stdinCloseSync chan struct{}, attachStdio StdioCallback, terminal bool) (cio.IO, error) {
+	var (
+		io  *cio.DirectIO
+		err error
+	)
+	if terminal {
+		io, err = cio.NewDirectIOWithTerminal(context.Background(), fifos)
+	} else {
+		io, err = cio.NewDirectIO(context.Background(), fifos)
+	}
 	if err != nil {
 		return nil, err
 	}
diff --git a/libcontainerd/remote_daemon_linux.go b/libcontainerd/remote_daemon_linux.go
index 235bb21627..dc59eb8c14 100644
--- a/libcontainerd/remote_daemon_linux.go
+++ b/libcontainerd/remote_daemon_linux.go
@@ -6,6 +6,7 @@ import (
 	"syscall"
 	"time"
 
+	"github.com/containerd/containerd/defaults"
 	"github.com/docker/docker/pkg/system"
 )
 
@@ -18,6 +19,12 @@ func (r *remote) setDefaults() {
 	if r.GRPC.Address == "" {
 		r.GRPC.Address = filepath.Join(r.stateDir, sockFile)
 	}
+	if r.GRPC.MaxRecvMsgSize == 0 {
+		r.GRPC.MaxRecvMsgSize = defaults.DefaultMaxRecvMsgSize
+	}
+	if r.GRPC.MaxSendMsgSize == 0 {
+		r.GRPC.MaxSendMsgSize = defaults.DefaultMaxSendMsgSize
+	}
 	if r.Debug.Address == "" {
 		r.Debug.Address = filepath.Join(r.stateDir, debugSockFile)
 	}