Terraform Infrastructure as Code Skill

Step 1: Project Structure

infra/
├── main.tf              # Main resource definitions
├── variables.tf         # Input variable declarations
├── outputs.tf           # Output values
├── versions.tf          # Required providers and Terraform version
├── locals.tf            # Local values (computed names, tags)
├── backend.tf           # Remote state configuration
├── terraform.tfvars     # Variable values (gitignored for secrets)
├── terraform.tfvars.example  # Template for required vars
└── modules/
    ├── networking/
    │   ├── main.tf
    │   ├── variables.tf
    │   └── outputs.tf
    └── compute/
        ├── main.tf
        ├── variables.tf
        └── outputs.tf

Step 2: Provider and Version Pinning

# versions.tf
terraform {
  required_version = ">= 1.7.0"

  required_providers {
    aws = {
      source  = "hashicorp/aws"
      version = "~> 5.0"
    }
    cloudflare = {
      source  = "cloudflare/cloudflare"
      version = "~> 4.0"
    }
  }
}

provider "aws" {
  region = var.aws_region

  default_tags {
    tags = local.common_tags
  }
}

Step 3: Variables and Locals

# variables.tf
variable "environment" {
  description = "Deployment environment (dev, staging, prod)"
  type        = string

  validation {
    condition     = contains(["dev", "staging", "prod"], var.environment)
    error_message = "environment must be dev, staging, or prod"
  }
}

variable "app_name" {
  description = "Application name used in resource naming"
  type        = string
}

variable "instance_type" {
  description = "EC2 instance type"
  type        = string
  default     = "t3.micro"
}

variable "database_password" {
  description = "Database master password"
  type        = string
  sensitive   = true  # never shown in plan/apply output
}

# locals.tf
locals {
  name_prefix  = "${var.app_name}-${var.environment}"
  is_prod      = var.environment == "prod"

  common_tags = {
    App         = var.app_name
    Environment = var.environment
    ManagedBy   = "Terraform"
  }
}

Step 4: Core Resources (AWS Examples)

# main.tf - VPC + Subnets + EC2 + RDS pattern

# VPC
resource "aws_vpc" "main" {
  cidr_block           = "10.0.0.0/16"
  enable_dns_hostnames = true
  enable_dns_support   = true

  tags = merge(local.common_tags, { Name = "${local.name_prefix}-vpc" })
}

# Public subnets (multi-AZ)
resource "aws_subnet" "public" {
  count                   = length(var.availability_zones)
  vpc_id                  = aws_vpc.main.id
  cidr_block              = "10.0.${count.index}.0/24"
  availability_zone       = var.availability_zones[count.index]
  map_public_ip_on_launch = true

  tags = merge(local.common_tags, { Name = "${local.name_prefix}-public-${count.index + 1}" })
}

# S3 bucket
resource "aws_s3_bucket" "assets" {
  bucket = "${local.name_prefix}-assets-${random_id.suffix.hex}"
  tags   = local.common_tags
}

resource "aws_s3_bucket_versioning" "assets" {
  bucket = aws_s3_bucket.assets.id
  versioning_configuration { status = "Enabled" }
}

resource "aws_s3_bucket_server_side_encryption_configuration" "assets" {
  bucket = aws_s3_bucket.assets.id
  rule {
    apply_server_side_encryption_by_default {
      sse_algorithm = "AES256"
    }
  }
}

# RDS PostgreSQL
resource "aws_db_instance" "main" {
  identifier        = "${local.name_prefix}-db"
  engine            = "postgres"
  engine_version    = "16.2"
  instance_class    = local.is_prod ? "db.t3.small" : "db.t3.micro"
  allocated_storage = local.is_prod ? 100 : 20

  db_name  = var.app_name
  username = "admin"
  password = var.database_password

  multi_az               = local.is_prod
  deletion_protection    = local.is_prod
  skip_final_snapshot    = !local.is_prod

  vpc_security_group_ids = [aws_security_group.database.id]
  db_subnet_group_name   = aws_db_subnet_group.main.name

  backup_retention_period = local.is_prod ? 7 : 1
  storage_encrypted       = true

  tags = local.common_tags

  lifecycle {
    prevent_destroy       = false  # set true in prod
    ignore_changes        = [password]  # manage via Secrets Manager
  }
}

Step 5: Outputs

# outputs.tf
output "vpc_id" {
  description = "VPC ID"
  value       = aws_vpc.main.id
}

output "database_endpoint" {
  description = "RDS endpoint (host:port)"
  value       = "${aws_db_instance.main.endpoint}"
}

output "s3_bucket_name" {
  description = "S3 bucket name for assets"
  value       = aws_s3_bucket.assets.bucket
}

Step 6: Remote State Backend

# backend.tf
terraform {
  backend "s3" {
    bucket         = "my-terraform-state-bucket"
    key            = "myapp/prod/terraform.tfstate"
    region         = "us-east-1"
    encrypt        = true
    dynamodb_table = "terraform-locks"  # for state locking
  }
}

# Create the backend resources first (bootstrap):
# aws s3api create-bucket --bucket my-terraform-state-bucket --region us-east-1
# aws dynamodb create-table --table-name terraform-locks \
#   --attribute-definitions AttributeName=LockID,AttributeType=S \
#   --key-schema AttributeName=LockID,KeyType=HASH \
#   --billing-mode PAY_PER_REQUEST

Step 7: Reusable Modules

# modules/networking/main.tf - reusable VPC module
variable "name_prefix" { type = string }
variable "vpc_cidr"    { type = string; default = "10.0.0.0/16" }
variable "tags"        { type = map(string); default = {} }

resource "aws_vpc" "this" {
  cidr_block           = var.vpc_cidr
  enable_dns_hostnames = true
  tags                 = merge(var.tags, { Name = "${var.name_prefix}-vpc" })
}

output "vpc_id"   { value = aws_vpc.this.id }
output "vpc_cidr" { value = aws_vpc.this.cidr_block }

# Calling the module:
# root main.tf
module "networking" {
  source      = "./modules/networking"
  name_prefix = local.name_prefix
  vpc_cidr    = "10.0.0.0/16"
  tags        = local.common_tags
}

# Public module from Terraform Registry:
module "vpc" {
  source  = "terraform-aws-modules/vpc/aws"
  version = "~> 5.0"
  name    = local.name_prefix
  cidr    = "10.0.0.0/16"
}

Step 8: Essential Commands

# Workflow
terraform init          # download providers, init backend
terraform fmt           # format all .tf files
terraform validate      # check syntax
terraform plan          # preview changes
terraform apply         # apply changes (prompts for confirmation)
terraform destroy       # tear down all resources

# State management
terraform state list                      # list all resources in state
terraform state show aws_vpc.main         # inspect a resource
terraform import aws_vpc.main vpc-12345   # import existing resource
terraform state rm aws_s3_bucket.old      # remove from state (not from cloud)

# Workspaces (simple environment isolation)
terraform workspace new staging
terraform workspace select prod
terraform workspace list

# Targeted apply (use sparingly)
terraform apply -target=aws_db_instance.main

Step 9: CI/CD with GitHub Actions

# .github/workflows/terraform.yml
name: Terraform

on:
  pull_request:
    paths: ['infra/**']
  push:
    branches: [main]
    paths: ['infra/**']

jobs:
  plan:
    runs-on: ubuntu-latest
    defaults:
      run:
        working-directory: infra

    steps:
      - uses: actions/checkout@v4

      - uses: hashicorp/setup-terraform@v3
        with:
          terraform_version: '1.7.0'
          cli_config_credentials_token: ${{ secrets.TF_API_TOKEN }}

      - name: Terraform Init
        run: terraform init

      - name: Terraform Format Check
        run: terraform fmt -check

      - name: Terraform Plan
        env:
          AWS_ACCESS_KEY_ID: ${{ secrets.AWS_ACCESS_KEY_ID }}
          AWS_SECRET_ACCESS_KEY: ${{ secrets.AWS_SECRET_ACCESS_KEY }}
        run: terraform plan -no-color -out=tfplan
        
      - name: Post plan to PR
        uses: actions/github-script@v7
        # ... post plan output as PR comment

  apply:
    needs: plan
    if: github.ref == 'refs/heads/main'
    runs-on: ubuntu-latest
    environment: production  # requires manual approval
    steps:
      - name: Terraform Apply
        run: terraform apply -auto-approve tfplan

Common Mistakes

• Not pinning provider versions - always use version = "~> 5.0" to prevent breaking changes
• Storing state locally - always use remote state (S3 + DynamoDB) for team environments
• Missing state locking - DynamoDB table prevents concurrent applies that corrupt state
• Sensitive values in tfvars committed to git - use .gitignore for *.tfvars, use environment variables or Vault for secrets
• Using `count` for resources with changing order - use for_each with a map/set of unique keys instead
• Forgetting `deletion_protection` in prod - set on databases, critical buckets, etc.
• `terraform destroy` in CI without protection - use environment with approval gates for destructive operations
• Not running `terraform fmt` in CI - add format check to fail fast on unformatted code