diff --git a/cli/azd/cmd/extensions.go b/cli/azd/cmd/extensions.go
index d73dafa5230..0b2a58ac3a2 100644
--- a/cli/azd/cmd/extensions.go
+++ b/cli/azd/cmd/extensions.go
@@ -182,11 +182,10 @@ func (a *extensionAction) Run(ctx context.Context) (*actions.ActionResult, error
 	}
 
 	options := &extensions.InvokeOptions{
-		Args:   a.args,
-		Env:    allEnv,
-		StdIn:  a.console.Handles().Stdin,
-		StdOut: a.console.Handles().Stdout,
-		StdErr: a.console.Handles().Stderr,
+		Args: a.args,
+		Env:  allEnv,
+		// cmd extensions are always interactive (connected to terminal)
+		Interactive: true,
 	}
 
 	_, err = a.extensionRunner.Invoke(ctx, extension, options)
diff --git a/cli/azd/pkg/extensions/runner.go b/cli/azd/pkg/extensions/runner.go
index 16680fad16f..b3ec3ed2d2d 100644
--- a/cli/azd/pkg/extensions/runner.go
+++ b/cli/azd/pkg/extensions/runner.go
@@ -15,11 +15,12 @@ import (
 )
 
 type InvokeOptions struct {
-	Args   []string
-	Env    []string
-	StdIn  io.Reader
-	StdOut io.Writer
-	StdErr io.Writer
+	Args        []string
+	Env         []string
+	StdIn       io.Reader
+	StdOut      io.Writer
+	StdErr      io.Writer
+	Interactive bool
 }
 
 type Runner struct {
@@ -51,16 +52,20 @@ func (r *Runner) Invoke(ctx context.Context, extension *Extension, options *Invo
 		runArgs = runArgs.WithEnv(options.Env)
 	}
 
-	if options.StdIn != nil {
-		runArgs = runArgs.WithStdIn(options.StdIn)
-	}
+	if options.Interactive {
+		runArgs = runArgs.WithInteractive(true)
+	} else {
+		if options.StdIn != nil {
+			runArgs = runArgs.WithStdIn(options.StdIn)
+		}
 
-	if options.StdOut != nil {
-		runArgs = runArgs.WithStdOut(options.StdOut)
-	}
+		if options.StdOut != nil {
+			runArgs = runArgs.WithStdOut(options.StdOut)
+		}
 
-	if options.StdErr != nil {
-		runArgs = runArgs.WithStdErr(options.StdErr)
+		if options.StdErr != nil {
+			runArgs = runArgs.WithStdErr(options.StdErr)
+		}
 	}
 
 	runResult, err := r.commandRunner.Run(ctx, runArgs)