diff --git a/src/browser/Terminal.ts b/src/browser/Terminal.ts
index 115ccce77..216b541ad 100644
--- a/src/browser/Terminal.ts
+++ b/src/browser/Terminal.ts
@@ -39,7 +39,7 @@ import { MouseZoneManager } from 'browser/MouseZoneManager';
 import { AccessibilityManager } from './AccessibilityManager';
 import { ITheme, IMarker, IDisposable, ISelectionPosition, ILinkProvider } from 'xterm';
 import { DomRenderer } from 'browser/renderer/dom/DomRenderer';
-import { IKeyboardEvent, KeyboardResultType, CoreMouseEventType, CoreMouseButton, CoreMouseAction, ITerminalOptions } from 'common/Types';
+import { IKeyboardEvent, KeyboardResultType, CoreMouseEventType, CoreMouseButton, CoreMouseAction, ITerminalOptions, IColorRGB } from 'common/Types';
 import { evaluateKeyboardEvent } from 'common/input/Keyboard';
 import { EventEmitter, IEvent, forwardEvent } from 'common/EventEmitter';
 import { DEFAULT_ATTR_DATA } from 'common/buffer/BufferLine';
@@ -53,7 +53,7 @@ import { Linkifier2 } from 'browser/Linkifier2';
 import { CoreBrowserService } from 'browser/services/CoreBrowserService';
 import { CoreTerminal } from 'common/CoreTerminal';
 import { ITerminalOptions as IInitializedTerminalOptions } from 'common/services/Services';
-import { css } from 'browser/Color';
+import { rgba } from 'browser/Color';
 
 // Let it work inside Node.js for automated testing purposes.
 const document: Document = (typeof window !== 'undefined') ? window.document : null as any;
@@ -151,7 +151,7 @@ export class Terminal extends CoreTerminal implements ITerminal {
     this.register(this._inputHandler.onRequestWindowsOptionsReport(type => this._reportWindowsOptions(type)));
     this.register(forwardEvent(this._inputHandler.onCursorMove, this._onCursorMove));
     this.register(forwardEvent(this._inputHandler.onTitleChange, this._onTitleChange));
-    this.register(this._inputHandler.onAnsiColorChange((index, color) => this.changeAnsiColor(index, color)));
+    this.register(this._inputHandler.onAnsiColorChange((index, color) => this._changeAnsiColor(index, color)));
     this.register(forwardEvent(this._inputHandler.onA11yChar, this._onA11yCharEmitter));
     this.register(forwardEvent(this._inputHandler.onA11yTab, this._onA11yTabEmitter));
 
@@ -159,17 +159,10 @@ export class Terminal extends CoreTerminal implements ITerminal {
     this.register(this._bufferService.onResize(e => this._afterResize(e.cols, e.rows)));
   }
 
-  private changeAnsiColor(colorIndex: number, colorValue: string): void {
-    // colorValue = rgb:xx/yy/zz
-    const r = colorValue.substring(4, 6);
-    const g = colorValue.substring(7, 9);
-    const b = colorValue.substring(10, 12);
-    const color = `#${r}${g}${b}`;
+  private _changeAnsiColor(colorIndex: number, colorRGB: IColorRGB): void {
+    const color = rgba.toColor(colorRGB[0], colorRGB[1], colorRGB[2]);
 
-    //TODO: remove debug
-    console.log(`Change ANSI color[${colorIndex}]=${colorValue} (${color})`);
-
-    this._colorManager!.colors.ansi[colorIndex] = css.toColor(color);
+    this._colorManager!.colors.ansi[colorIndex] = color;
     this._renderService?.setColors(this._colorManager!.colors);
     this.viewport?.onThemeChange(this._colorManager!.colors);
   }
diff --git a/src/common/InputHandler.ts b/src/common/InputHandler.ts
index 3dd0c11bf..46350a142 100644
--- a/src/common/InputHandler.ts
+++ b/src/common/InputHandler.ts
@@ -4,7 +4,7 @@
  * @license MIT
  */
 
-import { IInputHandler, IAttributeData, IDisposable, IWindowOptions } from 'common/Types';
+import { IInputHandler, IAttributeData, IDisposable, IWindowOptions, IColorRGB } from 'common/Types';
 import { C0, C1 } from 'common/data/EscapeSequences';
 import { CHARSETS, DEFAULT_CHARSET } from 'common/data/Charsets';
 import { EscapeSequenceParser } from 'common/parser/EscapeSequenceParser';
@@ -250,8 +250,8 @@ export class InputHandler extends Disposable implements IInputHandler {
   public get onScroll(): IEvent<number> { return this._onScroll.event; }
   private _onTitleChange = new EventEmitter<string>();
   public get onTitleChange(): IEvent<string> { return this._onTitleChange.event; }
-  private _onAnsiColorChange = new EventEmitter<number, string>();
-  public get onAnsiColorChange(): IEvent<number, string> { return this._onAnsiColorChange.event; }
+  private _onAnsiColorChange = new EventEmitter<number, IColorRGB>();
+  public get onAnsiColorChange(): IEvent<number, IColorRGB> { return this._onAnsiColorChange.event; }
 
   constructor(
     private readonly _bufferService: IBufferService,
@@ -374,12 +374,7 @@ export class InputHandler extends Disposable implements IInputHandler {
     this._parser.setOscHandler(2, new OscHandler((data: string) => this.setTitle(data)));
     //   3 - set property X in the form "prop=value"
     //   4 - Change Color Number
-    this._parser.setOscHandler(4, new OscHandler((data: string) => {
-      const ansiColor = data.split(';');
-      const colorIndex = parseInt(ansiColor[0]);
-      const colorValue = ansiColor[1];
-      this.setAnsiColor(colorIndex, colorValue);
-    }));
+    this._parser.setOscHandler(4, new OscHandler((data: string) => this.setAnsiColor(data)));
     //   5 - Change Special Color Number
     //   6 - Enable/disable Special Color Number c
     //   7 - current directory? (not in xterm spec, see https://gitlab.com/gnachman/iterm2/issues/3939)
@@ -2721,11 +2716,29 @@ export class InputHandler extends Disposable implements IInputHandler {
 
   /**
    * OSC 4; <num> ; <text> ST (set ANSI color <num> to <text>)
+   *
+   * The expected content of data is: <number>;rgb:<rr>/<gg>/<bb> where rr, gg, bb are hex numbers.
    */
-  public setAnsiColor(colorIndex: number, colorData: string): void {
-    //TODO: remove debug
-    console.log(`Setting ANSI color ${colorIndex} to value ${colorData}`);
-    this._onAnsiColorChange.fire(colorIndex, colorData);
+  public setAnsiColor(data: string): void {
+    // example data: 5;rgb:aa/bb/cc
+    const regex = /(\d+);rgb:([0-9a-fA-F]{2})\/([0-9a-fA-F]{2})\/([0-9a-fA-F]{2})/;
+    const match = data.match(regex);
+
+    if (match) {
+      const colorIndex = parseInt(match[1]);
+      const color: IColorRGB = [
+        parseInt(match[2], 16),
+        parseInt(match[3], 16),
+        parseInt(match[4], 16)
+      ];
+
+      //TODO: remove debug
+      console.log(`Setting ANSI color ${colorIndex} to RGB value ${color}`);
+      this._onAnsiColorChange.fire(colorIndex, color);
+    }
+    else {
+      this._logService.warn(`Expected format <num>;rgb:<rr>/<gg>/<bb> but got data: ${data}`);
+    }
   }
 
   /**
diff --git a/src/common/Types.d.ts b/src/common/Types.d.ts
index 004979321..4967da122 100644
--- a/src/common/Types.d.ts
+++ b/src/common/Types.d.ts
@@ -389,7 +389,7 @@ export interface IInputHandler {
   /** CSI ' ~ */ deleteColumns(params: IParams): void;
   /** OSC 0
       OSC 2 */ setTitle(data: string): void;
-  /** OSC 4 */ setAnsiColor(colorIndex: number, colorData: string): void;
+  /** OSC 4 */ setAnsiColor(data: string): void;
   /** ESC E */ nextLine(): void;
   /** ESC = */ keypadApplicationMode(): void;
   /** ESC > */ keypadNumericMode(): void;