diff --git a/src/bootstrap-fork.ts b/src/bootstrap-fork.ts
index b87e855ba85fe5..73dd8665d546dc 100644
--- a/src/bootstrap-fork.ts
+++ b/src/bootstrap-fork.ts
@@ -19,7 +19,7 @@ function pipeLoggingToParent(): void {
 	 * Prevent circular stringify and convert arguments to real array
 	 */
 	function safeToString(args: ArrayLike<unknown>): string {
-		const seen: unknown[] = [];
+		const ancestors: unknown[] = [];
 		const argsArray: unknown[] = [];
 
 		// Massage some arguments with special treatment
@@ -50,15 +50,20 @@ function pipeLoggingToParent(): void {
 		}
 
 		try {
-			const res = JSON.stringify(argsArray, function (key, value: unknown) {
+			const res = JSON.stringify(argsArray, function (this: unknown, key, value: unknown) {
 
-				// Objects get special treatment to prevent circles
-				if (isObject(value) || Array.isArray(value)) {
-					if (seen.indexOf(value) !== -1) {
+				// Track only current ancestors so shared references are serialized in full.
+				if (typeof value === 'object' && value !== null) {
+					// `this` is the object holding `key`, pop the subtrees that are already done
+					while (ancestors.length > 0 && ancestors[ancestors.length - 1] !== this) {
+						ancestors.pop();
+					}
+
+					if (ancestors.indexOf(value) !== -1) {
 						return '[Circular]';
 					}
 
-					seen.push(value);
+					ancestors.push(value);
 				}
 
 				return value;
@@ -84,14 +89,6 @@ function pipeLoggingToParent(): void {
 		}
 	}
 
-	function isObject(obj: unknown): boolean {
-		return typeof obj === 'object'
-			&& obj !== null
-			&& !Array.isArray(obj)
-			&& !(obj instanceof RegExp)
-			&& !(obj instanceof Date);
-	}
-
 	function safeSendConsoleMessage(severity: 'log' | 'warn' | 'error', args: string): void {
 		safeSend({ type: '__$console', severity, arguments: args });
 	}
diff --git a/src/vs/base/test/node/processes/fixtures/fork_console.ts b/src/vs/base/test/node/processes/fixtures/fork_console.ts
new file mode 100644
index 00000000000000..c979fc7e30c932
--- /dev/null
+++ b/src/vs/base/test/node/processes/fixtures/fork_console.ts
@@ -0,0 +1,11 @@
+/*---------------------------------------------------------------------------------------------
+ *  Copyright (c) Microsoft Corporation. All rights reserved.
+ *  Licensed under the MIT License. See License.txt in the project root for license information.
+ *--------------------------------------------------------------------------------------------*/
+
+const sharedValue = { value: 1 };
+
+const circularValue: { name: string; self?: unknown } = { name: 'circular' };
+circularValue.self = circularValue;
+
+console.log(sharedValue, { a: sharedValue, b: sharedValue }, circularValue);
diff --git a/src/vs/base/test/node/processes/processes.integrationTest.ts b/src/vs/base/test/node/processes/processes.integrationTest.ts
index 3f30e931271d56..0c726f4744627b 100644
--- a/src/vs/base/test/node/processes/processes.integrationTest.ts
+++ b/src/vs/base/test/node/processes/processes.integrationTest.ts
@@ -59,6 +59,34 @@ suite('Processes', () => {
 		});
 	});
 
+	test('console forwarding - shared references are not reported as circular', function (done: (err?: unknown) => void) {
+		if (process.env['VSCODE_PID']) {
+			return done(); // this test fails when run from within VS Code
+		}
+
+		const child = fork('vs/base/test/node/processes/fixtures/fork_console');
+
+		child.on('message', msgFromChild => {
+			const msg = msgFromChild as { type?: string; arguments?: string };
+			if (msg.type !== '__$console') {
+				return;
+			}
+
+			child.kill();
+
+			try {
+				assert.deepStrictEqual(JSON.parse(msg.arguments!), [
+					{ value: 1 },
+					{ a: { value: 1 }, b: { value: 1 } },
+					{ name: 'circular', self: '[Circular]' }
+				]);
+				done();
+			} catch (error) {
+				done(error);
+			}
+		});
+	});
+
 	(!platform.isWindows || process.env['VSCODE_PID'] ? test.skip : test)('buffered sending - lots of data (potential deadlock on win32)', function (done: () => void) { // test is only relevant for Windows and seems to crash randomly on some Linux builds
 		const child = fork('vs/base/test/node/processes/fixtures/fork_large');
 		const sender = processes.createQueuedSender(child);