Setting Variables

Now that you understand what variables are and why they’re useful in Terraform, this guide shows how to provide concrete values at runtime. Declaring a variable in Terraform creates a placeholder; a value must be supplied by one of several supported methods. Below we walk through each method—from interactive prompts to production-ready CI/CD approaches—and explain precedence so there’s no confusion when multiple sources supply the same variable. Quick overview of methods:

Interactive prompts
Command-line flags (-var / -var-file)
Variable definition files (.tfvars / .auto.tfvars)
Environment variables (TF_VAR_*)

1) Interactive prompts

If a variable is declared without a default and no other source provides a value, Terraform prompts you at runtime. This is convenient for demos and learning but unsuitable for automation. Example declarations:

# ---- variables.tf ----
variable "resource_group_name" {
}

variable "location" {
}

Running terraform plan without supplying values triggers an interactive prompt:

$ terraform plan
var.location
  Enter a value: eastus

var.resource_group_name
  Enter a value: my-workshop-rg

Pros:

Simple and immediate for ad-hoc runs or demos.

Cons:

Requires human input.
Not suitable for automated pipelines.

2) Command-line flags (-var)

You can provide variable values at runtime with the -var flag, which overrides values from files and defaults and bypasses interactive prompts. Example:

$ terraform plan -var "location=eastus" -var "resource_group_name=my-workshop-rg"

Terraform will then generate a plan immediately:

Terraform used the selected providers to generate the following execution plan.
Resource actions are indicated with the following symbols:
  + create

Terraform will perform the following actions:

  # azurerm_storage_account.storage will be created
  + resource "azurerm_storage_account" "storage" {
      + access_tier                = (known after apply)
      + account_kind               = "StorageV2"
      + account_replication_type   = "LRS"
    }

Pros:

Quick for testing and one-off overrides.

Cons:

Values appear in shell history.
Commands become long and error-prone.
Not ideal for secrets or repeatable workflows.

3) Variable definition files (tfvars)

Separating variable declarations from variable values is a common best practice. Place values in a .tfvars file:

# ---- variables.tf ----
variable "resource_group_name" {}
variable "location" {}

# ---- terraform.tfvars ----
resource_group_name = "my-workshop-rg"
location            = "eastus"

Behavior:

terraform.tfvars is loaded automatically when you run terraform plan or terraform apply.
Any file ending in .auto.tfvars is also auto-loaded.
JSON equivalents (terraform.tfvars.json, *.auto.tfvars.json) are supported when valid JSON.

If you prefer explicit loading, use -var-file:

$ terraform plan -var-file="variable.tfvars"

This is useful when switching environments manually (e.g., dev.tfvars, staging.tfvars, prod.tfvars). Example plan output when using a var file:

Terraform used the selected providers to generate the following execution plan.
Resource actions are indicated with the following symbols:
  + create

Terraform will perform the following actions:

  # azurerm_storage_account.storage will be created
  + resource "azurerm_storage_account" "storage" {
      + access_tier              = (known after apply)
      + account_kind             = "StorageV2"
      + account_replication_type = "LRS"
      + account_tier             = "Standard"
    }

Pros:

Keeps values out of Terraform source files.
Easy to version-control non-sensitive defaults (but don’t commit secrets).
Convenient for single primary environments.

Cons:

Requires care to avoid committing secrets to VCS.

4) Environment variables (TF_VAR_*)

Environment variables are widely used in CI/CD to inject secrets and other runtime values without checking them into source control. Terraform maps any environment variable named TF_VAR_<variable_name> to the corresponding input variable. Example:

$ export TF_VAR_resource_group_name="rg-01"
$ export TF_VAR_location="eastus"
$ terraform plan -var-file="variable.tfvars"

Notes:

Environment variables are often used for sensitive values because CI/CD systems provide secure ways to store them.
Treat any mechanism that exposes environment variables with care—environment values can leak into logs or process listings in some cases.

Pros:

Good for CI/CD secrets when your pipeline manager stores secrets securely.
Not persisted in project files.

Cons:

Potential exposure in logs or process listings if misused.

Variable precedence (lowest → highest)

Understanding precedence ensures you know which value Terraform will use when the same variable is defined in multiple places. Precedence (lowest to highest):

Default value in variable declaration.
terraform.tfvars (auto-loaded).
terraform.tfvars.json (auto-loaded).
Auto-loaded files ending in .auto.tfvars or .auto.tfvars.json (alphabetical order; later files override earlier ones).
Environment variables: TF_VAR_*.
Command-line flags: -var and -var-file (last flag wins if multiple).

For readability, here’s the same precedence in a compact table:

Priority	Source
1 (lowest)	Default in `variable` block
2	`terraform.tfvars` (auto-loaded)
3	`terraform.tfvars.json` (auto-loaded)
4	`.auto.tfvars` / `.auto.tfvars.json` (auto-loaded; processed alphabetically)
5	Environment variables: `TF_VAR_*`
6 (highest)	Command-line: `-var` / `-var-file`

Note: If a variable has no default and hasn’t been set by any of the above, Terraform will prompt you interactively as a last resort—unsuitable for automation.

Organize variables according to this hierarchy. Use environment variables for secrets in CI/CD, terraform.tfvars for project defaults, .auto.tfvars for per-environment variables, and -var/-var-file for temporary or manual overrides.

When to use each method

Use this quick reference to choose the right approach for your workflow:

Method	Best for	Notes
`terraform.tfvars`	Default reusable variables for a project	Auto-loaded and simple for a primary environment
`.auto.tfvars`	Per-environment values where you want auto-load behavior	Files are processed alphabetically; later files override earlier ones
`-var` / `-var-file`	One-off overrides or scripted runs	Highest precedence; avoid for long-term secret management
Environment `TF_VAR_*`	CI/CD secrets and runtime injection	Store securely in pipeline secret stores; avoid logging them
JSON (`*.tfvars.json`)	Machine-generated variable files	Useful when values are produced by scripts or external systems

Terraform gives you flexible options; apply consistent conventions to scale and secure your deployments.

Example: prompts, env vars, and tfvars combined

This example demonstrates variable declarations with description and validation—helpful for interactive prompts and improving UX for other contributors.

variable "rg" {
  description = "Name of the resource group"
  type        = string

  validation {
    condition     = length(var.rg) >= 10
    error_message = "The resource group name cannot be less than 10 characters."
  }
}

variable "region" {
  description = "Azure region to deploy the resources"
  type        = string

  validation {
    condition     = contains(["eastus", "westus", "centralus"], var.region)
    error_message = "The region must be one of the following: eastus, westus, centralus."
  }
}

Interactive prompt example:

variables
variables terraform plan
Azure region to deploy the resources
Enter a value: eastus

var.rg
Name of the resource group
Enter a value: rg-kodekloud-tf-01

Environment variable example:

$ export TF_VAR_region="eastus"
$ terraform plan

Output (excerpt):

  + id       = (known after apply)
  + location = "eastus"
  + name     = "rg-kodekloud-tf-01"

Plan: 1 to add, 0 to change, 0 to destroy.

Using a terraform.tfvars file (one variable from tfvars, one from environment):

# terraform.tfvars
rg = "rg-kodekloud-tf-01"

With TF_VAR_region set in the environment and rg in terraform.tfvars, Terraform will use values from both sources:

$ export TF_VAR_region="eastus"
$ terraform plan

Plan output (excerpt):

Terraform will perform the following actions:

# azurerm_resource_group.rg will be created
+ resource "azurerm_resource_group" "rg" {
    + id       = (known after apply)
    + location = "eastus"
    + name     = "rg-kodekloud-tf-01"
}

Plan: 1 to add, 0 to change, 0 to destroy.

Always remember the precedence rules when values are defined in multiple places. Use the simplest method that still scales and follow security best practices for secrets.

Links and References

Terraform: Variables documentation — https://www.terraform.io/language/values/variables
Terraform: Input variable precedence — https://www.terraform.io/cli/config/variables
Terraform: Variable files and JSON syntax — https://www.terraform.io/language/values/variables#variable-definitions-files

Introduction

Infrastructure as Code Fundamentals

Terraform Cloud

Setting up environment

Azure Context for Terraform

HashiCorp Configuration Language

Terraform Providers

Variables

Outputs and Dependencies

Iteration and Logic

Advanced Constructs

Terraform State Fundamentals

Remote State

Terraform Workspaces

Terraform CLI

Lifecycle Meta-Arguments

Data Sources

Provisioners

Debugging Terraform

Terraform Modules

Azure DevOps Integration

Azure Pipelines for Terraform

1) Interactive prompts

2) Command-line flags (-var)

3) Variable definition files (tfvars)

4) Environment variables (TF_VAR_*)

Variable precedence (lowest → highest)

When to use each method

Example: prompts, env vars, and tfvars combined

Links and References

Watch Video

​1) Interactive prompts

​2) Command-line flags (-var)

​3) Variable definition files (tfvars)

​4) Environment variables (TF_VAR_*)

​Variable precedence (lowest → highest)

​When to use each method

​Example: prompts, env vars, and tfvars combined

​Links and References

Watch Video

1) Interactive prompts

2) Command-line flags (-var)

3) Variable definition files (tfvars)

4) Environment variables (TF_VAR_*)

Variable precedence (lowest → highest)

When to use each method

Example: prompts, env vars, and tfvars combined

Links and References