diff --git a/src/Application.vala b/src/Application.vala
index 311dc0a5b8..619874f9d5 100644
--- a/src/Application.vala
+++ b/src/Application.vala
@@ -107,9 +107,9 @@ public class Terminal.Application : Gtk.Application {
         if (options.lookup ("working-directory", "^&ay", out working_directory)) {
             if (working_directory != "\0") {
                 Environment.set_current_dir (working_directory); // will be sent via platform-data
+                // Need to know in commandline () whether this option was present and valid so do not remove
+                // options.remove ("working-directory");
             }
-
-            options.remove ("working-directory");
         }
 
         if (options.lookup (OPTION_REMAINING, "^a&ay", out args)) {
@@ -217,17 +217,15 @@ public class Terminal.Application : Gtk.Application {
         unowned var options = command_line.get_options_dict ();
         var window = (MainWindow) active_window;
         bool new_window;
-
-        if (window == null || options.lookup ("new-window", "b", out new_window) && new_window) {
-            /* Uncertain whether tabs should be restored when app is launched with working directory from commandline.
-             * Currently they are set to restore (subject to the restore-tabs setting).
-             * If it is desired that tabs should never be restored in these circimstances add another check below.
-             */
-            bool restore_tabs = !("commandline" in options || "execute" in options) || window == null;
-            window = new MainWindow (this, restore_tabs);
+        if (window == null ||
+            options.lookup ("new-window", "b", out new_window) && new_window) {
+            window = new MainWindow (this);
         }
 
-        unowned var working_directory = command_line.get_cwd ();
+        unowned string working_directory;
+        var wd_was_requested = options.lookup ("working-directory", "^&ay", out working_directory);
+        working_directory = command_line.get_cwd ();
+
         unowned string[] commands;
         unowned string command;
         bool new_tab, minimized;
@@ -237,15 +235,20 @@ public class Terminal.Application : Gtk.Application {
         if (options.lookup ("execute", "^a&ay", out commands)) {
             for (var i = 0; commands[i] != null; i++) {
                 if (commands[i] != "\0") {
-                    window.add_tab_with_working_directory (working_directory, commands[i], new_tab);
+                    window.add_tab_with_working_directory (working_directory, commands[i]);
                 }
             }
         } else if (options.lookup ("commandline", "^&ay", out command) && command != "\0") {
-            window.add_tab_with_working_directory (working_directory, command, new_tab);
-        } else {
-            window.add_tab_with_working_directory (working_directory, null, new_tab);
+            window.add_tab_with_working_directory (working_directory, command);
+        } else if (wd_was_requested) {
+            window.add_tab_with_working_directory (working_directory, null);
+        } else if (new_tab) {
+            window.add_tab_with_working_directory (working_directory, null); //FIXME Should we honor "follow-last-tab" setting?
         }
 
+        // Only if no other tabs, add default tab (can happen if trying to execute invalid commands)
+        add_default_tab (window, false);
+
         if (options.lookup ("minimized", "b", out minimized) && minimized) {
             window.iconify ();
         } else {
@@ -264,7 +267,15 @@ public class Terminal.Application : Gtk.Application {
     }
 
     private void new_window () {
-        new MainWindow (this, active_window == null).present ();
+        var window = new MainWindow (this);
+        add_default_tab (window, false);
+        window.present ();
+    }
+
+    private void add_default_tab (MainWindow window, bool force) {
+        if (force || window.terminals.length () == 0) {
+            window.actions.activate_action (window.ACTION_NEW_TAB, null);
+        }
     }
 
     private void close () {
diff --git a/src/MainWindow.vala b/src/MainWindow.vala
index 34622dc090..d3a8e80f3f 100644
--- a/src/MainWindow.vala
+++ b/src/MainWindow.vala
@@ -28,6 +28,7 @@ namespace Terminal {
         private Gtk.ToggleButton search_button;
         private Dialogs.ColorPreferences? color_preferences_dialog;
         private Granite.AccelLabel open_in_browser_menuitem_label;
+        private bool tabs_were_restored = false;
 
         private HashTable<string, TerminalWidget> restorable_terminals;
         private bool is_fullscreen = false;
@@ -41,7 +42,6 @@ namespace Terminal {
 
         public bool unsafe_ignored;
         public bool focus_restored_tabs { get; construct; default = true; }
-        public bool recreate_tabs { get; construct; default = true; }
         public bool restore_pos { get; construct; default = true; }
         public uint focus_timeout { get; private set; default = 0;}
         public Gtk.Menu menu { get; private set; }
@@ -105,30 +105,19 @@ namespace Terminal {
             { ACTION_OPEN_IN_BROWSER, action_open_in_browser }
         };
 
-        public MainWindow (Terminal.Application app, bool recreate_tabs = true) {
+        public MainWindow (Terminal.Application app) {
             Object (
-                app: app,
-                recreate_tabs: recreate_tabs
+                app: app
             );
-
-            if (!recreate_tabs) {
-                new_tab ("");
-            }
         }
 
-        public MainWindow.with_coords (Terminal.Application app, int x, int y,
-                                       bool recreate_tabs, bool ensure_tab) {
+        public MainWindow.with_coords (Terminal.Application app, int x, int y) {
             Object (
                 app: app,
-                restore_pos: false,
-                recreate_tabs: recreate_tabs
+                restore_pos: false
             );
 
             move (x, y);
-
-            if (!recreate_tabs && ensure_tab) {
-                new_tab ("");
-            }
         }
 
         static construct {
@@ -259,28 +248,17 @@ namespace Terminal {
 
             restorable_terminals = new HashTable<string, TerminalWidget> (str_hash, str_equal);
 
-            if (recreate_tabs) {
-                open_tabs ();
+            if (app.get_windows ().length () == 1) {
+                open_saved_tabs ();
             }
         }
 
-        public void add_tab_with_working_directory (string? directory, string? command = null, bool create_new_tab = false) {
+        public void add_tab_with_working_directory (string location, string? command = null) {
             /* This requires all restored tabs to be initialized first so that the shell location is available */
-            /* Do not add a new tab if location is already open in existing tab */
-            string? location = null;
-
-            if (directory == null || directory == "") {
-                if (notebook.tabs.first () == null || command != null || create_new_tab) { //Ensure at least one tab
-                    new_tab ("", command);
-                }
-
-                return;
-            } else {
-                location = directory;
-            }
+            /* Does not add a new tab if location is already open in existing tab */
 
             /* We can match existing tabs only if there is no command and create_new_tab == false */
-            if (command == null && !create_new_tab) {
+            if (command == null && location != null) {
                 var file = File.new_for_commandline_arg (location);
                 foreach (Granite.Widgets.Tab tab in notebook.tabs) {
                     var terminal_widget = get_term_widget (tab);
@@ -295,7 +273,7 @@ namespace Terminal {
                 }
             }
 
-            new_tab (location, command);
+            new_tab (location, command); // Always execute command in new tab
         }
 
         /** Returns true if the code parameter matches the keycode of the keyval parameter for
@@ -550,7 +528,8 @@ namespace Terminal {
         }
 
         private void restore_saved_state (bool restore_pos = true) {
-            if (Granite.Services.System.history_is_enabled () &&
+            if (!tabs_were_restored && // Only restore tabs once
+                Granite.Services.System.history_is_enabled () &&
                 Application.settings.get_boolean ("remember-tabs")) {
 
                 saved_tabs = Terminal.Application.saved_state.get_strv ("tabs");
@@ -659,9 +638,7 @@ namespace Terminal {
                 var new_window = new MainWindow.with_coords (
                     app,
                     x,
-                    y,
-                    false,
-                    false
+                    y
                 );
 
                 var terminal_widget = get_term_widget (tab);
@@ -822,7 +799,7 @@ namespace Terminal {
             current_terminal.grab_focus ();
         }
 
-        private void open_tabs () {
+        private void open_saved_tabs () {
             string[] tabs = {};
             double[] zooms = {};
             int focus = 0;
@@ -831,12 +808,12 @@ namespace Terminal {
             if (Granite.Services.System.history_is_enabled () &&
                 Application.settings.get_boolean ("remember-tabs")) {
 
+                tabs_were_restored = true; // An attempt was made to restore.
                 tabs = saved_tabs;
                 var n_tabs = tabs.length;
 
                 if (n_tabs == 0) {
-                    tabs += Environment.get_home_dir ();
-                    zooms += default_zoom;
+                    return;
                 } else {
                     foreach (unowned string zoom_s in saved_zooms) {
                         var zoom = double.parse (zoom_s); // Locale independent
@@ -854,9 +831,6 @@ namespace Terminal {
                 }
 
                 focus = Terminal.Application.saved_state.get_int ("focused-tab");
-            } else {
-                tabs += Environment.get_current_dir ();
-                zooms += default_zoom;
             }
 
             assert (zooms.length == tabs.length);
@@ -869,10 +843,6 @@ namespace Terminal {
                     null_dirs++;
                     tabs[i] = "";
                 }
-
-                if (null_dirs == tabs.length) {
-                    tabs[0] = Environment.get_current_dir ();
-                }
             }
 
             Terminal.Application.saved_state.set_strv ("tabs", {});
@@ -896,7 +866,7 @@ namespace Terminal {
                 index++;
             }
 
-            if (focus_restored_tabs) {
+            if (index > 0 && focus_restored_tabs) {
                 var tab = notebook.get_tab_by_index (focus.clamp (0, notebook.n_tabs - 1));
                 notebook.current = tab;
                 get_term_widget (tab).grab_focus ();
@@ -920,8 +890,10 @@ namespace Terminal {
 
 
             var tab = create_tab (
-                location != null ? Path.get_basename (location) : TerminalWidget.DEFAULT_LABEL,
-                null, terminal_widget); //Set correct label now to avoid race when spawning shell
+                Path.get_basename (location),
+                null,
+                terminal_widget
+            ); //Set correct label now to avoid race when spawning shell
 
             terminal_widget.child_exited.connect (() => {
                 if (!terminal_widget.killed) {
@@ -1189,7 +1161,11 @@ namespace Terminal {
 
         private void action_new_tab () {
             if (Application.settings.get_boolean ("follow-last-tab")) {
-                new_tab (current_terminal.get_shell_location ());
+                if (current_terminal != null) {
+                    new_tab (current_terminal.get_shell_location ());
+                } else {
+                    new_tab (Environment.get_current_dir ());
+                }
             } else {
                 new_tab (Environment.get_home_dir ());
             }
@@ -1348,8 +1324,8 @@ namespace Terminal {
             string[] opened_tabs = {};
             string[] zooms = {};
 
+        // The last closed window will override the settings for any previously closed window
             Application.saved_state.set_double ("zoom", current_terminal.font_scale);
-
             if (Granite.Services.System.history_is_enabled () &&
                 Application.settings.get_boolean ("remember-tabs")) {
 
@@ -1362,22 +1338,22 @@ namespace Terminal {
                         }
                     }
                 });
-            }
 
-            Terminal.Application.saved_state.set_strv (
-                "tabs",
-                opened_tabs
-            );
+                Terminal.Application.saved_state.set_strv (
+                    "tabs",
+                    opened_tabs
+                );
 
-            Terminal.Application.saved_state.set_strv (
-                "tab-zooms",
-                zooms
-            );
+                Terminal.Application.saved_state.set_strv (
+                    "tab-zooms",
+                    zooms
+                );
 
-            Terminal.Application.saved_state.set_int (
-                "focused-tab",
-                notebook.current != null ? notebook.get_tab_position (notebook.current) : 0
-            );
+                Terminal.Application.saved_state.set_int (
+                    "focused-tab",
+                    notebook.current != null ? notebook.get_tab_position (notebook.current) : 0
+                );
+            }
         }
 
         /** Return enough of @path to distinguish it from @conflict_path **/
diff --git a/src/tests/Application.vala b/src/tests/Application.vala
index df88c9dd62..3e6733a2bc 100644
--- a/src/tests/Application.vala
+++ b/src/tests/Application.vala
@@ -47,13 +47,20 @@ namespace Terminal.Test.Application {
         }
     }
 
-    private void option (string options, string platform_data, CommandLineCallback callback) {
+    private void option (
+        string options,
+        string platform_data,
+        CommandLineCallback callback,
+        bool create_default_window_first = true
+    ) {
         ulong oneshot = 0;
         setup ();
 
         oneshot = application.command_line.connect ((nil) => {
             application.disconnect (oneshot);
-            application.command_line (nil);
+            if (create_default_window_first) {
+                application.command_line (nil);
+            }
 
             var cmdline = (ApplicationCommandLine) Object.new (
                 typeof (ApplicationCommandLine),
@@ -145,39 +152,40 @@ namespace Terminal.Test.Application {
                 unowned var window = (MainWindow) application.active_window;
                 assert_nonnull (window);
                 var n_tabs = (int) window.terminals.length ();
-                assert_cmpint (n_tabs, CompareOperator.EQ, 2);
-            });
+                assert_cmpint (n_tabs, CompareOperator.EQ, 1);
+            }, false);
 
             option ("{'new-tab':<false>}", "@a{sv} {}", () => {
                 unowned var window = (MainWindow) application.active_window;
                 assert_nonnull (window);
                 var n_tabs = (int) window.terminals.length ();
                 assert_cmpint (n_tabs, CompareOperator.EQ, 1);
-            });
+            }, false);
         });
 
         GLib.Test.add_func ("/application/command-line/new-window", () => {
             option ("{'new-window':<true>}", "@a{sv} {}", () => {
                 var n_windows = (int) application.get_windows ().length ();
                 assert_cmpint (n_windows, CompareOperator.EQ, 2);
-            });
+            }, true);
 
             option ("{'new-window':<false>}", "@a{sv} {}", () => {
                 var n_windows = (int) application.get_windows ().length ();
                 assert_cmpint (n_windows, CompareOperator.EQ, 1);
-            });
+            }, false);
         });
 
         GLib.Test.add_func ("/application/command-line/execute", () => {
-            string[] execute = { "true", "echo test", "echo -e te\\tst", "false" };
+            string[] execute = { "true", "echo test", "echo -e te\\tst", "false" }; // 4 commands
 
             // valid
             option ("{'execute':<[b'%s']>}".printf (string.joinv ("',b'", execute)), "@a{sv} {}", () => {
+                debug ("execute callback");
                 unowned var window = (MainWindow) application.active_window;
                 assert_nonnull (window);
                 var n_tabs = (int) window.terminals.length ();
-                assert_cmpint (n_tabs, CompareOperator.EQ, 5); // include the guaranted extra tab
-            });
+                assert_cmpint (n_tabs, CompareOperator.EQ, 4);
+            }, false);
 
             // invalid
             option ("{'execute':<[b'',b'',b'']>}", "@a{sv} {}", () => {
@@ -185,7 +193,7 @@ namespace Terminal.Test.Application {
                 assert_nonnull (window);
                 var n_tabs = (int) window.terminals.length ();
                 assert_cmpint (n_tabs, CompareOperator.EQ, 1);
-            });
+            }, false);
         });
 
         //FIXME: cannot test the commandline option without a way to get the terminal command