The present invention extends to methods, systems, and computer program products for establishing and utilizing terminal server dynamic virtual channels. In some embodiments, a terminal server sends a new channel request to a terminal server. The client receives the new channel request and forwards the new channel request to a listener for a plug-in. The listener creates an instance of the client side plug-in and sends a channel accept to the terminal server. The terminal server receives the channel accept and creates an instance of a server side plug-in. The server and the client agree to use a unique identifier for identifying the established dynamic virtual channel. In other embodiments, data for a dynamic virtual channel is tunneled between computers over a static virtual channel.