diff --git a/src/remote.ts b/src/remote.ts
index 2f2678cd..fbc31a51 100644
--- a/src/remote.ts
+++ b/src/remote.ts
@@ -19,7 +19,8 @@ import prettyBytes from "pretty-bytes"
 import * as semver from "semver"
 import * as vscode from "vscode"
 import * as ws from "ws"
-import { SSHConfig, defaultSSHConfigResponse, mergeSSHConfigValues } from "./sshConfig"
+import { SSHConfig, SSHValues, defaultSSHConfigResponse, mergeSSHConfigValues } from "./sshConfig"
+import { sshSupportsSetEnv } from "./sshSupport"
 import { Storage } from "./storage"
 
 export class Remote {
@@ -509,7 +510,7 @@ export class Remote {
     }
 
     const escape = (str: string): string => `"${str.replace(/"/g, '\\"')}"`
-    const sshValues = {
+    const sshValues: SSHValues = {
       Host: `${Remote.Prefix}*`,
       ProxyCommand: `${escape(binaryPath)} vscodessh --network-info-dir ${escape(
         this.storage.getNetworkInfoPath(),
@@ -520,9 +521,11 @@ export class Remote {
       StrictHostKeyChecking: "no",
       UserKnownHostsFile: "/dev/null",
       LogLevel: "ERROR",
+    }
+    if (sshSupportsSetEnv()) {
       // This allows for tracking the number of extension
       // users connected to workspaces!
-      SetEnv: "CODER_SSH_SESSION_TYPE=vscode",
+      sshValues.SetEnv = " CODER_SSH_SESSION_TYPE=vscode"
     }
 
     await sshConfig.update(sshValues, sshConfigOverrides)
diff --git a/src/sshConfig.ts b/src/sshConfig.ts
index 63b55f51..7430659e 100644
--- a/src/sshConfig.ts
+++ b/src/sshConfig.ts
@@ -1,5 +1,4 @@
-import { SSHConfigResponse } from "coder/site/src/api/typesGenerated"
-import { writeFile, readFile } from "fs/promises"
+import { readFile, writeFile } from "fs/promises"
 import { ensureDir } from "fs-extra"
 import path from "path"
 
@@ -9,13 +8,14 @@ interface Block {
   raw: string
 }
 
-interface SSHValues {
+export interface SSHValues {
   Host: string
   ProxyCommand: string
   ConnectTimeout: string
   StrictHostKeyChecking: string
   UserKnownHostsFile: string
   LogLevel: string
+  SetEnv?: string
 }
 
 // Interface for the file system to make it easier to test
diff --git a/src/sshSupport.test.ts b/src/sshSupport.test.ts
new file mode 100644
index 00000000..f4db7831
--- /dev/null
+++ b/src/sshSupport.test.ts
@@ -0,0 +1,18 @@
+import { it, expect } from "vitest"
+import { sshSupportsSetEnv, sshVersionSupportsSetEnv } from "./sshSupport"
+
+const supports = {
+  "OpenSSH_8.9p1 Ubuntu-3ubuntu0.1, OpenSSL 3.0.2 15 Mar 2022": true,
+  "OpenSSH_7.6p1 Ubuntu-4ubuntu0.7, OpenSSL 1.0.2n 7 Dec 2017": false,
+  "OpenSSH_7.4p1, OpenSSL 1.0.2k-fips  26 Jan 2017": false,
+}
+
+Object.entries(supports).forEach(([version, expected]) => {
+  it(version, () => {
+    expect(sshVersionSupportsSetEnv(version)).toBe(expected)
+  })
+})
+
+it("current shell supports ssh", () => {
+  expect(sshSupportsSetEnv()).toBeTruthy()
+})
diff --git a/src/sshSupport.ts b/src/sshSupport.ts
new file mode 100644
index 00000000..0100b04f
--- /dev/null
+++ b/src/sshSupport.ts
@@ -0,0 +1,36 @@
+import * as childProcess from "child_process"
+
+export function sshSupportsSetEnv(): boolean {
+  try {
+    // Run `ssh -V` to get the version string.
+    const spawned = childProcess.spawnSync("ssh", ["-V"])
+    // The version string outputs to stderr.
+    return sshVersionSupportsSetEnv(spawned.stderr.toString().trim())
+  } catch (error) {
+    return false
+  }
+}
+
+// sshVersionSupportsSetEnv ensures that the version string from the SSH
+// command line supports the `SetEnv` directive.
+//
+// It was introduced in SSH 7.8 and not all versions support it.
+export function sshVersionSupportsSetEnv(sshVersionString: string): boolean {
+  const match = sshVersionString.match(/OpenSSH_([\d.]+)[^,]*/)
+  if (match && match[1]) {
+    const installedVersion = match[1]
+    const parts = installedVersion.split(".")
+    if (parts.length < 2) {
+      return false
+    }
+    // 7.8 is the first version that supports SetEnv
+    if (Number.parseInt(parts[0], 10) < 7) {
+      return false
+    }
+    if (Number.parseInt(parts[1], 10) < 8) {
+      return false
+    }
+    return true
+  }
+  return false
+}