diff --git a/src/vs/workbench/contrib/notebook/browser/notebookExecutionServiceImpl.ts b/src/vs/workbench/contrib/notebook/browser/notebookExecutionServiceImpl.ts
index b8877a553a2..2d4fe4cebe0 100644
--- a/src/vs/workbench/contrib/notebook/browser/notebookExecutionServiceImpl.ts
+++ b/src/vs/workbench/contrib/notebook/browser/notebookExecutionServiceImpl.ts
@@ -4,6 +4,8 @@
  *--------------------------------------------------------------------------------------------*/
 
 import * as nls from 'vs/nls';
+import { CancellationTokenSource } from 'vs/base/common/cancellation';
+import { IDisposable } from 'vs/base/common/lifecycle';
 import { ICommandService } from 'vs/platform/commands/common/commands';
 import { ILogService } from 'vs/platform/log/common/log';
 import { IWorkspaceTrustRequestService } from 'vs/platform/workspace/common/workspaceTrust';
@@ -14,8 +16,9 @@ import { INotebookExecutionService } from 'vs/workbench/contrib/notebook/common/
 import { INotebookExecutionStateService } from 'vs/workbench/contrib/notebook/common/notebookExecutionStateService';
 import { INotebookKernelService, NotebookKernelType } from 'vs/workbench/contrib/notebook/common/notebookKernelService';
 
-export class NotebookExecutionService implements INotebookExecutionService {
+export class NotebookExecutionService implements INotebookExecutionService, IDisposable {
 	declare _serviceBrand: undefined;
+	private _activeProxyKernelExecutionToken: CancellationTokenSource | undefined;
 
 	constructor(
 		@ICommandService private readonly _commandService: ICommandService,
@@ -46,9 +49,10 @@ export class NotebookExecutionService implements INotebookExecutionService {
 		}
 
 		if (kernel.type === NotebookKernelType.Proxy) {
-			// we should actually resolve the kernel
+			this._activeProxyKernelExecutionToken?.dispose(true);
+			const tokenSource = this._activeProxyKernelExecutionToken = new CancellationTokenSource();
 			const resolved = await kernel.resolveKernel(notebook.uri);
-			let kernels = this._notebookKernelService.getMatchingKernel(notebook);
+			const kernels = this._notebookKernelService.getMatchingKernel(notebook);
 			const newlyMatchedKernel = kernels.all.find(k => k.id === resolved);
 
 			if (!newlyMatchedKernel) {
@@ -56,6 +60,11 @@ export class NotebookExecutionService implements INotebookExecutionService {
 			}
 
 			kernel = newlyMatchedKernel;
+			if (tokenSource.token.isCancellationRequested) {
+				// execution was cancelled but we still need to update the active kernel
+				this._notebookKernelService.selectKernelForNotebook(kernel, notebook);
+				return;
+			}
 		}
 
 		if (kernel.type === NotebookKernelType.Proxy) {
@@ -93,15 +102,19 @@ export class NotebookExecutionService implements INotebookExecutionService {
 		const kernel = this._notebookKernelService.getSelectedOrSuggestedKernel(notebook);
 		if (kernel) {
 			if (kernel.type === NotebookKernelType.Proxy) {
-				// we should handle cancelling proxy kernel too
-				return;
+				this._activeProxyKernelExecutionToken?.dispose(true);
+			} else {
+				await kernel.cancelNotebookCellExecution(notebook.uri, cellsArr);
 			}
 
-			await kernel.cancelNotebookCellExecution(notebook.uri, cellsArr);
 		}
 	}
 
 	async cancelNotebookCells(notebook: INotebookTextModel, cells: Iterable<NotebookCellTextModel>): Promise<void> {
 		this.cancelNotebookCellHandles(notebook, Array.from(cells, cell => cell.handle));
 	}
+
+	dispose() {
+		this._activeProxyKernelExecutionToken?.dispose(true);
+	}
 }
diff --git a/src/vs/workbench/contrib/notebook/browser/viewParts/notebookKernelActionViewItem.ts b/src/vs/workbench/contrib/notebook/browser/viewParts/notebookKernelActionViewItem.ts
index a4060aaa62e..ed9098ad49d 100644
--- a/src/vs/workbench/contrib/notebook/browser/viewParts/notebookKernelActionViewItem.ts
+++ b/src/vs/workbench/contrib/notebook/browser/viewParts/notebookKernelActionViewItem.ts
@@ -68,7 +68,7 @@ export class NotebooKernelActionViewItem extends ActionViewItem {
 	private _updateActionFromKernelInfo(info: INotebookKernelMatchResult): void {
 		this._kernelDisposable.clear();
 		this._action.enabled = true;
-		const selectedOrSuggested = info.selected ?? ((info.all.length === 1 && info.suggestions.length === 1 && !('resolveKernel' in info.suggestions[0])) ? info.suggestions[0] : undefined);
+		const selectedOrSuggested = info.selected ?? ((info.all.length === 1 && info.suggestions.length === 1 && info.suggestions[0].type === NotebookKernelType.Resolved) ? info.suggestions[0] : undefined);
 		if (selectedOrSuggested) {
 			// selected or suggested kernel
 			this._action.label = selectedOrSuggested.label;
@@ -94,7 +94,6 @@ export class NotebooKernelActionViewItem extends ActionViewItem {
 					}
 				}));
 			}
-
 		} else {
 			// many kernels or no kernels
 			this._action.label = localize('select', "Select Kernel");