What Problems Does Terragrunt Solve

Terragrunt enhances Terraform by introducing a hierarchical project layout and workflow automation. This structured approach helps you manage complexity, centralize state, eliminate duplication, and maintain consistency across environments—all while fostering better team collaboration.

At a Glance

Challenge	Impact	Terragrunt Feature
Configuration Complexity	Hard to scale and navigate large configs	Modular folder structure & nesting
Remote State Management	State drift and conflicts	Automated backend configuration (S3/Azure/GCS)
Code Duplication	Maintenance overhead	DRY inheritance with `include` & `dependency`
Environment Consistency	Drift between dev/staging/prod	Environment-specific folder layouts
Collaboration & Versioning	Merge conflicts & upgrade challenges	Isolated workflows & semantic versioning support

1. Configuration Complexity

As Terraform codebases grow, navigating dozens of .tf files and interdependent modules becomes challenging. Terragrunt enforces a clear directory hierarchy:

infrastructure/
├─ live/
│  ├─ dev/
│  │  └─ terragrunt.hcl
│  ├─ staging/
│  │  └─ terragrunt.hcl
│  └─ prod/
│     └─ terragrunt.hcl
└─ modules/
   ├─ vpc/
   │  └─ main.tf
   └─ app/
      └─ main.tf

This layout makes it easy to locate code, define dependencies, and scale as your team grows.

2. Remote State Management

Managing Terraform state across multiple environments and engineers introduces risk of state drift. Terragrunt automates backend setup in your terragrunt.hcl:

remote_state {
  backend = "s3"
  config = {
    bucket = "my-terraform-state"
    key    = "${path_relative_to_include()}/terraform.tfstate"
    region = "us-east-1"
  }
}

With a centralized and versioned state, everyone works from the same source of truth.

3. Code Duplication

Repeating provider, backend, and variable definitions for each environment leads to errors and maintenance pain. Terragrunt’s DRY approach allows you to share common configuration:

# live/common.hcl
include {
  path = find_in_parent_folders()
}

inputs = {
  project = "my-app"
}

Then inherit in each environment:

# live/dev/terragrunt.hcl
include { path = "../common.hcl" }
inputs = { environment = "dev" }

Tip

Use dependency blocks to pass outputs between modules, further reducing repetition.

4. Environment Consistency

Differences between dev, staging, and prod can cause unexpected behavior. By defining environment-specific variables and settings in separate folders, Terragrunt ensures each stage uses the intended configuration:

live/
└─ prod/
   └─ terragrunt.hcl  # Overrides common inputs with production values

5. Collaboration and Versioning

Multiple engineers working on the same Terraform code can collide on merges or apply the wrong versions of modules. Terragrunt addresses this by:

Isolated apply/plan contexts per environment
Support for semantic versioning of modules
Encouraging small, incremental changes

This leads to safer upgrades and clearer audit trails.

The image lists five problems that Terragrunt solves: configuration complexity, state management challenges, code duplication, consistency across platforms, and collaboration and versioning.

References

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