Terraform Style Guide

Terraform Style Guide

Adopting and adhering to a style guide keeps your Terraform code legible, scalable, and maintainable. This guide is based on HashiCorp's official Terraform style conventions and best practices, enhanced with Azure Verified Modules (AVM) requirements for Azure-specific Terraform development.

> Note on AVM Requirements: The Azure Verified Modules section provides requirements specific to Azure module development. While these requirements are mandatory for AVM certification, many of the patterns and practices have broader applicability to Terraform module development across all cloud providers and can be adopted to improve code quality, consistency, and maintainability in any Terraform project.

Table of Contents

• [Code Style Fundamentals](#code-style-fundamentals)
• [Code Formatting Standards](#code-formatting-standards)
• [File Organization](#file-organization)
• [Naming Conventions](#naming-conventions)
• [Resource Organization](#resource-organization)
• [Variables and Outputs](#variables-and-outputs)
• [Local Values](#local-values)
• [Provider Configuration and Aliasing](#provider-configuration-and-aliasing)
• [Dynamic Resource Creation](#dynamic-resource-creation)
• [Version Control](#version-control)
• [Workflow Standards](#workflow-standards)
• [Multi-Environment Management](#multi-environment-management)
• [State and Secrets Management](#state-and-secrets-management)
• [Testing and Policy](#testing-and-policy)
• [Azure Verified Modules (AVM) Requirements](#azure-verified-modules-avm-requirements)
• [Module Cross-Referencing](#module-cross-referencing)
• [Azure Provider Requirements](#azure-provider-requirements)
• [AVM Code Style Standards](#avm-code-style-standards)
• [AVM Variable Requirements](#avm-variable-requirements)
• [AVM Output Requirements](#avm-output-requirements)
• [AVM Testing Requirements](#avm-testing-requirements)
• [Breaking Changes & Feature Management](#breaking-changes--feature-management)

---

Code Style Fundamentals

Core Principles

Always follow these fundamental practices:

• Execute terraform fmt before committing code to version control
• Execute terraform validate to catch syntax and configuration errors
• Use # for comments (avoid // and /* */ style comments)
• Name resources with descriptive nouns using underscores, excluding the resource type
• Define dependent resources after their dependencies for better readability
• Include type and description for all variables
• Include descriptions for all outputs
• Use count and for_each judiciously with clear intent

Automation with Git Hooks

Consider using Git pre-commit hooks to automatically run terraform fmt and terraform validate:

#!/bin/bash
# .git/hooks/pre-commit

terraform fmt -recursive
terraform validate

---

Code Formatting Standards

Terraform has specific formatting conventions that the terraform fmt command automates.

Indentation

• Use two spaces per nesting level
• Never use tabs

resource "aws_instance" "example" {
  ami           = "ami-0c55b159cbfafe1f0"
  instance_type = "t2.micro"

  tags = {
    Name = "example-instance"
  }
}

Alignment

• Align equals signs for consecutive single-line arguments at the same nesting level
• Separate different argument groups with blank lines

# Good - aligned equals signs
resource "aws_instance" "web" {
  ami           = "ami-0c55b159cbfafe1f0"
  instance_type = "t2.micro"
  subnet_id     = "subnet-12345678"

  tags = {
    Name        = "web-server"
    Environment = "production"
  }
}

# Bad - unaligned
resource "aws_instance" "web" {
  ami = "ami-0c55b159cbfafe1f0"
  instance_type = "t2.micro"
  subnet_id = "subnet-12345678"
}

Block Organization

• Arguments precede blocks within a resource
• Separate with one blank line between arguments and blocks
• Meta-arguments come first, followed by standard arguments, then blocks

resource "aws_instance" "example" {
  # Meta-arguments first
  count = 3

  # Standard arguments
  ami           = "ami-0c55b159cbfafe1f0"
  instance_type = "t2.micro"

  # Blocks last
  root_block_device {
    volume_size = 20
  }
}

Spacing

• Use single blank lines to separate logical groups of arguments
• Top-level blocks (resources, data sources, modules) require blank lines between them
• Do not use excessive blank lines

variable "instance_count" {
  description = "Number of instances to create"
  type        = number
  default     = 1
}

variable "instance_type" {
  description = "EC2 instance type"
  type        = string
  default     = "t2.micro"
}

---

File Organization

Standard File Structure

Organize your Terraform code into these standard files:

| File | Purpose | |------|---------| | terraform.tf | Terraform and provider version requirements | | providers.tf | Provider configurations | | main.tf | Primary resources and data sources | | variables.tf | Input variable declarations (alphabetical order) | | outputs.tf | Output value declarations (alphabetical order) | | locals.tf | Local value declarations |

Example terraform.tf:

terraform {
  required_version = ">= 1.7"

  required_providers {
    aws = {
      source  = "hashicorp/aws"
      version = "~> 5.34.0"
    }
  }
}

Example providers.tf:

provider "aws" {
  region = var.aws_region

  default_tags {
    tags = {
      ManagedBy = "Terraform"
      Project   = "MyProject"
    }
  }
}

---

Naming Conventions

General Rules

• Use descriptive nouns and underscores to separate multiple words
• Exclude the resource type from the resource name (redundant)
• Use lowercase for all names
• Be specific and meaningful

Examples

# ❌ Bad - includes resource type, uses hyphens, mixed case
resource "aws_instance" "webAPI-aws-instance" {
  # ...
}

# ✅ Good - descriptive noun, underscores, lowercase
resource "aws_instance" "web_api" {
  # ...
}

# ❌ Bad - too generic
variable "name" {
  type = string
}

# ✅ Good - specific and clear
variable "application_name" {
  type = string
}

Variable Naming

Variables should clearly indicate their purpose:

variable "vpc_cidr_block" {
  description = "CIDR block for the VPC"
  type        = string
}

variable "enable_dns_hostnames" {
  description = "Enable DNS hostnames in the VPC"
  type        = bool
  default     = true
}

---

Resource Organization

Dependency Order

Define a data source before the resource that references it for better readability:

# Data source first
data "aws_ami" "ubuntu" {
  most_recent = true
  owners      = ["099720109477"]

  filter {
    name   = "name"
    values = ["ubuntu/images/hvm-ssd/ubuntu-focal-20.04-amd64-server-*"]
  }
}

# Resource that uses it second
resource "aws_instance" "web" {
  ami           = data.aws_ami.ubuntu.id
  instance_type = "t2.micro"
}

Parameter Order Within Resources

Follow this standard ordering for resource parameters:

1. count or for_each (meta-arguments)
2. Resource-specific non-block parameters (alphabetically or logically grouped)
3. Resource-specific block parameters
4. lifecycle block (if needed)
5. depends_on (if required, as last resort)

resource "aws_instance" "web" {
  # 1. Meta-arguments
  count = var.instance_count

  # 2. Non-block parameters
  ami           = data.aws_ami.ubuntu.id
  instance_type = var.instance_type
  subnet_id     = aws_subnet.public.id

  # 3. Block parameters
  root_block_device {
    volume_size = 20
    volume_type = "gp3"
  }

  tags = {
    Name = "web-${count.index}"
  }

  # 4. Lifecycle
  lifecycle {
    create_before_destroy = true
  }

  # 5. depends_on (avoid if possible)
  # depends_on = [aws_iam_role_policy.example]
}

---

Variables and Outputs

Variable Declaration Standards

Every variable must include:

• type - the data type
• description - clear explanation of purpose

Optional but recommended:

• default - default value if applicable
• sensitive - mark as true for secrets
• validation - for uniquely restrictive requirements

variable "instance_type" {
  description = "EC2 instance type for the web server"
  type        = string
  default     = "t2.micro"

  validation {
    condition     = contains(["t2.micro", "t2.small", "t2.medium"], var.instance_type)
    error_message = "Instance type must be t2.micro, t2.small, or t2.medium."
  }
}

variable "database_password" {
  description = "Password for the database admin user"
  type        = string
  sensitive   = true
}

variable "availability_zones" {
  description = "List of availability zones for resource placement"
  type        = list(string)
}

variable "tags" {
  description = "Common tags to apply to all resources"
  type        = map(string)
  default     = {}
}

Output Declaration Standards

Every output must include:

• description - clear explanation of the value

Optional attributes:

• sensitive - mark as true to hide from console output
• depends_on - explicit dependencies if needed

output "instance_id" {
  description = "ID of the EC2 instance"
  value       = aws_instance.web.id
}

output "instance_public_ip" {
  description = "Public IP address of the EC2 instance"
  value       = aws_instance.web.public_ip
}

output "database_password" {
  description = "Database administrator password"
  value       = aws_db_instance.main.password
  sensitive   = true
}

Variable Files Organization

Organize variables alphabetically in variables.tf and use .tfvars files for environment-specific values:

# terraform.tfvars (or dev.tfvars, prod.tfvars)
instance_type      = "t2.micro"
instance_count     = 3
availability_zones = ["us-west-2a", "us-west-2b"]

---

Local Values

Usage Guidelines

Use local values sparingly to avoid unnecessary complexity. Locals are appropriate when:

• Avoiding repetition of complex expressions
• Giving meaningful names to intermediate values
• Computing values used multiple times

locals {
  # Good use case - computing a reusable value
  common_tags = merge(
    var.tags,
    {
      Environment = var.environment
      ManagedBy   = "Terraform"
      Project     = var.project_name
    }
  )

  # Good use case - naming a complex expression
  vpc_id = var.create_vpc ? aws_vpc.main[0].id : data.aws_vpc.existing[0].id
}

resource "aws_instance" "web" {
  ami           = data.aws_ami.ubuntu.id
  instance_type = var.instance_type

  tags = local.common_tags
}

Anti-patterns to Avoid

# ❌ Bad - unnecessary local for a simple reference
locals {
  instance_type = var.instance_type
}

# ✅ Good - use the variable directly
resource "aws_instance" "web" {
  instance_type = var.instance_type
}

---

Provider Configuration and Aliasing

Default Provider First

Always define a default provider configuration first, then aliases:

# Default provider
provider "aws" {
  region = "us-west-2"
}

# Aliased provider for another region
provider "aws" {
  alias  = "east"
  region = "us-east-1"
}

# Using the aliased provider
resource "aws_instance" "east_web" {
  provider = aws.east

  ami           = "ami-0c55b159cbfafe1f0"
  instance_type = "t2.micro"
}

Module Provider Configuration

For modules that use multiple providers, specify via the providers meta-argument:

module "vpc_replication" {
  source = "./modules/vpc"

  providers = {
    aws.primary   = aws
    aws.secondary = aws.east
  }
}

---

Dynamic Resource Creation

count vs for_each

Choose the appropriate meta-argument based on your use case:

Use for_each when:

• Resources need distinct argument values
• You want to reference resources by key instead of index
• Resources are based on a map or set
• Preference for_each over count

Use count when:

• Conditional resource creation (0 or 1)

Avoid count for:

• Simple numeric repetition (use for_each with a set or map instead)

for_each Examples

# Using for_each with a map
variable "instances" {
  type = map(object({
    instance_type = string
    ami           = string
  }))
  default = {
    web = {
      instance_type = "t2.micro"
      ami           = "ami-0c55b159cbfafe1f0"
    }
    api = {
      instance_type = "t2.small"
      ami           = "ami-0c55b159cbfafe1f0"
    }
  }
}

resource "aws_instance" "servers" {
  for_each = var.instances

  ami           = each.value.ami
  instance_type = each.value.instance_type

  tags = {
    Name = each.key
  }
}

# Reference: aws_instance.servers["web"].id

# Using for_each with a set
variable "subnet_cidrs" {
  type    = set(string)
  default = ["10.0.1.0/24", "10.0.2.0/24", "10.0.3.0/24"]
}

resource "aws_subnet" "private" {
  for_each = var.subnet_cidrs

  vpc_id     = aws_vpc.main.id
  cidr_block = each.value

  tags = {
    Name = "private-${each.key}"
  }
}

count Examples

# Conditional resource creation
variable "enable_monitoring" {
  type    = bool
  default = false
}

resource "aws_cloudwatch_metric_alarm" "cpu" {
  count = var.enable_monitoring ? 1 : 0

  alarm_name          = "high-cpu-usage"
  comparison_operator = "GreaterThanThreshold"
  evaluation_periods  = 2
  metric_name         = "CPUUtilization"
  namespace           = "AWS/EC2"
  period              = 300
  statistic           = "Average"
  threshold           = 80
}

# Reference (when created): aws_cloudwatch_metric_alarm.cpu[0].id

Anti-pattern: count for Numeric Repetition

❌ Avoid this pattern - Using count for simple numeric repetition:

# BAD: Don't use count for numeric repetition
variable "instance_count" {
  type    = number
  default = 3
}

resource "aws_instance" "web" {
  count = var.instance_count

  ami           = "ami-0c55b159cbfafe1f0"
  instance_type = "t2.micro"

  tags = {
    Name = "web-${count.index}"
  }
}

✅ Better approach - Use for_each with a set instead:

# GOOD: Use for_each for multiple similar resources
variable "instance_names" {
  type    = set(string)
  default = ["web-1", "web-2", "web-3"]
}

resource "aws_instance" "web" {
  for_each = var.instance_names

  ami           = "ami-0c55b159cbfafe1f0"
  instance_type = "t2.micro"

  tags = {
    Name = each.key
  }
}

# Reference: aws_instance.web["web-1"].id

Why? Using for_each provides stable resource addresses that don't change when you add or remove instances from the middle of the list.

---

Version Control

.gitignore Configuration

Never commit to version control:

• State files (terraform.tfstate, terraform.tfstate.backup)
• Lock info files (.terraform.tfstate.lock.info)
• .terraform directory (provider plugins and modules)
• Saved plan files (*.tfplan, plan.out)
• .tfvars files containing sensitive data

Always commit:

• All .tf configuration files
• .terraform.lock.hcl (dependency lock file)
• .gitignore file
• README and documentation files

---

Workflow Standards

Version Pinning

Always pin versions explicitly to ensure reproducible deployments:

terraform {
  required_version = ">= 1.7"

  required_providers {
    aws = {
      source  = "hashicorp/aws"
      version = "5.34.0"  # Pin to exact version for stability
    }
    random = {
      source  = "hashicorp/random"
      version = "~> 3.6"  # Allow patch updates only
    }
  }
}

Version constraint operators:

• = 1.0.0 - Exact version only
• >= 1.0.0 - Greater than or equal to
• ~> 1.0 - Allow rightmost version component to increment (1.0, 1.1, but not 2.0)
• >= 1.0, -

Examples:

• terraform-aws-vpc
• terraform-azurerm-virtual-network
• terraform-google-kubernetes-engine

Repository Strategy

Three common approaches:

1. Separate Module Repositories (Reco

…

Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

• Author: hashi-demo-lab
• Source: hashi-demo-lab/claude-skill-hcp-terraform
• License: MIT

Install and usage instructions live in the source repository linked above.