diff --git a/install/functions b/install/functions
index 86e7a6f..343085b 100644
--- a/install/functions
+++ b/install/functions
@@ -243,5 +243,6 @@ deploy_zsh() {
     link "$DOTFILES/zsh/aliases" "$ZDOTDIR/aliases"
     link "$DOTFILES/zsh/prompt" "$ZDOTDIR/prompt"
     link "$DOTFILES/zsh/solarized" "$ZDOTDIR/solarized"
+    link "$DOTFILES/zsh/vi-mode" "$ZDOTDIR/vi-mode"
 }
 
diff --git a/zsh/vi-mode b/zsh/vi-mode
new file mode 100644
index 0000000..0ecfc51
--- /dev/null
+++ b/zsh/vi-mode
@@ -0,0 +1,35 @@
+#!/bin/zsh
+
+# Use vi mode for line editing.
+bindkey -v
+export KEYTIMEOUT=1
+
+set_cursor_shape() {
+    if [ -n ITERM_SESSION_ID ]; then
+        local block='\e]1337;CursorShape=0\a'
+        local bar='\e]1337;CursorShape=1\a'
+        local underline='\e]1337;CursorShape=2\a'
+    else
+        local block='\e[1 q' beam='\e[3 q' underline='\e[5 q'
+    fi
+
+    case "$1" in
+        block)      echo -ne "$block"     ;;
+        bar)        echo -ne "$bar"       ;;
+        underline)  echo -ne "$underline" ;;
+    esac
+}
+
+# Switch cursor shape depending on editing mode.
+zle-keymap-select() {
+    case $KEYMAP in
+        vicmd)      set_cursor_shape block ;;
+        viins|main) set_cursor_shape bar   ;;
+    esac
+}
+zle -N zle-keymap-select
+
+# Start new prompts with bar shaped cursor.
+zle-line-init() { set_cursor_shape bar; }
+zle -N zle-line-init
+
diff --git a/zsh/zshrc b/zsh/zshrc
index e8405e9..f4537f7 100644
--- a/zsh/zshrc
+++ b/zsh/zshrc
@@ -6,6 +6,7 @@ while read -r f; do [ -f "$f" ] && source "$f"; done <<EOL
     $ZDOTDIR/aliases
     $ZDOTDIR/prompt
     $ZDOTDIR/solarized
+    $ZDOTDIR/vi-mode
 EOL
 unset f
 
@@ -17,20 +18,8 @@ HISTFILE="${XDG_DATA_HOME:-$HOME/.local/share}/zsh/history"
 HISTSIZE=1000000
 SAVEHIST=1000000
 
-# Use vi mode for line editing.
-bindkey -v
 
-# Use beam cursor on each new prompt
-precmd() { echo -ne '\e[5 q'; }
 
-# Switch cursor shape depending on editing mode.
-zle-keymap-select() {
-    case $KEYMAP in
-        vicmd)      echo -ne '\e[1 q';;  # block cursor for command mode
-        viins|main) echo -ne '\e[5 q';;  # beam cursor for insert mode
-    esac
-}
-zle -N zle-keymap-select
 
 #autoload -U compinit
 zstyle ':completion:*' menu select