Terraform vs Terragrunt: When to Use Each

If you're managing infrastructure as code, you've likely used Terraform. But have you considered Terragrunt? In this guide, I'll explain the differences and help you choose the right tool for your needs.

What is Terraform?

Terraform is HashiCorp's infrastructure as code tool that lets you define and provision infrastructure using a declarative configuration language. It's become the industry standard for managing cloud resources across AWS, Azure, GCP, and hundreds of other providers.

resource "aws_instance" "web" {
  ami           = "ami-0c55b159cbfafe1f0"
  instance_type = "t3.micro"

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

What is Terragrunt?

Terragrunt is a thin wrapper around Terraform that provides extra tools for keeping your configurations DRY (Don't Repeat Yourself), working with multiple modules, and managing remote state.

Think of it as Terraform with batteries included for teams managing multiple environments or complex infrastructures.

Key Differences

1. DRY Configuration

Terraform requires you to repeat configuration across environments:

# dev/main.tf
terraform {
  backend "s3" {
    bucket = "my-terraform-state"
    key    = "dev/terraform.tfstate"
    region = "us-east-1"
  }
}

Terragrunt lets you define it once:

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

2. Multi-Environment Management

Terragrunt excels at managing multiple environments (dev, staging, prod) with minimal code duplication. You can create a hierarchy that inherits common configuration while allowing environment-specific overrides.

3. Dependency Management

Terragrunt can manage dependencies between modules automatically, ensuring they're applied in the correct order.

When to Use Terraform Alone

Use plain Terraform when:

• You have a simple infrastructure with one or two environments
• Your team is new to IaC and learning the basics
• You don't need complex module dependencies
• You prefer minimal tooling and dependencies

When to Add Terragrunt

Consider Terragrunt when:

• You manage multiple environments (dev, staging, prod)
• You're tired of copying backend configurations
• You have complex module dependencies
• You want better organization for large infrastructures
• Your team is comfortable with Terraform basics

My Recommendation

Start with Terraform. Learn the fundamentals, understand state management, and get comfortable with modules.

Once you're managing 3+ environments or find yourself copying the same configuration repeatedly, introduce Terragrunt. The learning curve is minimal if you already know Terraform, and the benefits compound quickly.

Real-World Example

I recently helped a client migrate from pure Terraform to Terragrunt. They were managing 5 environments across 3 AWS accounts. The migration:

• Reduced code duplication by 60%
• Eliminated backend configuration errors
• Made environment provisioning 10x faster
• Improved team confidence in infrastructure changes

Getting Started with Terragrunt

If you decide to try Terragrunt:

1. Install Terragrunt alongside Terraform
2. Start with a simple terragrunt.hcl for backend configuration
3. Gradually introduce module composition
4. Set up proper directory structure for environments

Conclusion

Both tools have their place. Terraform is essential and foundational. Terragrunt is a powerful addition when your infrastructure grows in complexity.

The good news? You don't have to choose forever. You can start with Terraform and add Terragrunt when you need it.

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Need help with your Terraform or Terragrunt setup? Get in touch for a free consultation.