My inferior shell is bash. I have confirmed that this problem exists with 'emacs -Q'. Re-setting my PS1 to the bash default PS1='\h:\w\$ ' and starting Emacs didn't help either. Steps to reproduce: 1. emacs -Q 2. M-x ansi-term RET RET 3. cd /tmp (or any other directory) 4. C-x C-f Expected behavior: Emacs will indicate the shell's working directory (/tmp) in the find-file minibuffer prompt. Actual behavior: Emacs indicates the Emacs working directory working directory ($HOME, for me) in the find-file minibuffer prompt. I found that if I revert commit aad65192332dfc4a1df0cd2953554c21da243b51 the problem goes away. In GNU Emacs 25.0.50.1 (x86_64-pc-linux-gnu, GTK+ Version 3.10.8) of 2015-04-19 on lgw01-10 Windowing system distributor `The X.Org Foundation', version 11.0.11501000 System Description: Ubuntu 14.04.2 LTS Configured using: `configure --build=x86_64-linux-gnu --prefix=/usr '--includedir=${prefix}/include' '--mandir=${prefix}/share/man' '--infodir=${prefix}/share/info' --sysconfdir=/etc --localstatedir=/var '--libdir=${prefix}/lib/x86_64-linux-gnu' '--libexecdir=${prefix}/lib/x86_64-linux-gnu' --disable-maintainer-mode --disable-dependency-tracking --prefix=/usr --sharedstatedir=/var/lib --program-suffix=-snapshot --with-x=yes --with-x-toolkit=gtk3 'CFLAGS=-g -O2 -fstack-protector --param=ssp-buffer-size=4 -Wformat -Werror=format-security' CPPFLAGS=-D_FORTIFY_SOURCE=2 'LDFLAGS=-Wl,-Bsymbolic-functions -Wl,-z,relro'' Configured features: XPM JPEG TIFF GIF PNG RSVG IMAGEMAGICK SOUND GPM DBUS GCONF GSETTINGS NOTIFY LIBSELINUX GNUTLS LIBXML2 FREETYPE M17N_FLT LIBOTF XFT ZLIB Important settings: value of $LANG: en_US.UTF-8 value of $XMODIFIERS: @im=ibus locale-coding-system: utf-8-unix Major mode: Lisp Interaction Minor modes in effect: TeX-PDF-mode: t global-auto-complete-mode: t dirtrack-debug-mode: t magit-auto-revert-mode: t diff-auto-refine-mode: t elisp-slime-nav-mode: t display-time-mode: t shell-dirtrack-mode: t global-company-mode: t company-mode: t xterm-mouse-mode: t winner-mode: t which-function-mode: t show-paren-mode: t global-auto-revert-mode: t tooltip-mode: t global-eldoc-mode: t electric-indent-mode: t mouse-wheel-mode: t file-name-shadow-mode: t global-font-lock-mode: t font-lock-mode: t blink-cursor-mode: t auto-composition-mode: t auto-encryption-mode: t auto-compression-mode: t column-number-mode: t line-number-mode: t Recent messages: Creating group entries...done Creating customization items ...done Resetting customization items...done Creating customization setup...done Auto-saving...done Save all settings in this buffer? (y or n) y Saving file /home/jso/.emacs.d/init.el... Wrote /home/jso/.emacs.d/init.el [2 times] Mark set [4 times] Buffer *unsent mail to bug-gnu-emacs@gnu.org* modified; kill anyway? (y or n) y Load-path shadows: /home/jso/.emacs.d/elpa/cmake-mode-20150120.620/cmake-mode hides /usr/share/emacs/site-lisp/cmake-mode /usr/share/emacs/site-lisp/rst hides /usr/share/emacs/25.0.50/lisp/textmodes/rst /usr/share/emacs/site-lisp/dictionaries-common/ispell hides /usr/share/emacs/25.0.50/lisp/textmodes/ispell /usr/share/emacs/site-lisp/dictionaries-common/flyspell hides /usr/share/emacs/25.0.50/lisp/textmodes/flyspell ~/.emacs.d/cc-mode/cc-guess hides /usr/share/emacs/25.0.50/lisp/progmodes/cc-guess ~/.emacs.d/cc-mode/cc-vars hides /usr/share/emacs/25.0.50/lisp/progmodes/cc-vars ~/.emacs.d/cc-mode/cc-mode hides /usr/share/emacs/25.0.50/lisp/progmodes/cc-mode ~/.emacs.d/cc-mode/cc-bytecomp hides /usr/share/emacs/25.0.50/lisp/progmodes/cc-bytecomp ~/.emacs.d/cc-mode/cc-styles hides /usr/share/emacs/25.0.50/lisp/progmodes/cc-styles ~/.emacs.d/cc-mode/cc-fonts hides /usr/share/emacs/25.0.50/lisp/progmodes/cc-fonts ~/.emacs.d/cc-mode/cc-menus hides /usr/share/emacs/25.0.50/lisp/progmodes/cc-menus ~/.emacs.d/cc-mode/cc-cmds hides /usr/share/emacs/25.0.50/lisp/progmodes/cc-cmds ~/.emacs.d/cc-mode/cc-align hides /usr/share/emacs/25.0.50/lisp/progmodes/cc-align ~/.emacs.d/cc-mode/cc-engine hides /usr/share/emacs/25.0.50/lisp/progmodes/cc-engine ~/.emacs.d/cc-mode/cc-defs hides /usr/share/emacs/25.0.50/lisp/progmodes/cc-defs ~/.emacs.d/cc-mode/cc-awk hides /usr/share/emacs/25.0.50/lisp/progmodes/cc-awk ~/.emacs.d/cc-mode/cc-langs hides /usr/share/emacs/25.0.50/lisp/progmodes/cc-langs /usr/share/emacs/site-lisp/latex-cjk-thai/thai-word hides /usr/share/emacs/25.0.50/lisp/language/thai-word ~/.emacs.d/cc-mode/cc-compat hides /usr/share/emacs/25.0.50/lisp/obsolete/cc-compat Features: (uudecode uce supercite regi spam-report spam spam-stat gnus-uu yenc gnus-msg gnus-art mm-uu mml2015 mm-view mml-smime smime dig smtpmail sieve-manage rmail pop3 mspools mh-e mh-compat mh-acros mh-buffers mh-loaddefs mairix mailclient browse-url mailalias 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