Terraform Variables - Complete Guide (Input, Output, Local, Environment)

Name: Ansible Automation Platform By Example
Author: Luca Berton

Complete guide to all Terraform variable types: input variables, output values, locals, and environment variables.

Terraform Variables - Complete Guide (Input, Output, Local, Environment)

February 7, 2026
2 min read
Posted by Luca Berton
variables, input, output, locals

Terraform Variable Types

Terraform has four ways to handle dynamic values: input variables, output values, local values, and environment variables.

Input Variables

Declared with variable blocks, used to parameterize configurations:

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

  validation {
    condition     = contains(["t3.micro", "t3.small", "t3.medium"], var.instance_type)
    error_message = "Instance type must be t3.micro, t3.small, or t3.medium."
  }
}

Setting Variable Values (Priority Order)

-var flag (highest): terraform apply -var="instance_type=t3.small"
-var-file: terraform apply -var-file="prod.tfvars"
*.auto.tfvars files (alphabetical order)
terraform.tfvars file
TF_VAR_ environment variables: export TF_VAR_instance_type=t3.small
Default value in variable declaration
Interactive prompt (lowest)

Complex Types

variable "tags" {
  type = map(string)
  default = {
    Environment = "dev"
    Team        = "platform"
  }
}

variable "subnets" {
  type = list(object({
    cidr = string
    az   = string
  }))
}

Output Values

Expose information from your configuration:

output "instance_ip" {
  value       = aws_instance.web.public_ip
  description = "Public IP of the web server"
}

output "db_password" {
  value     = random_password.db.result
  sensitive = true
}

Access module outputs: module.networking.vpc_id

Local Values

Computed values for use within a module — reduce repetition:

locals {
  common_tags = {
    Project     = var.project
    Environment = var.environment
    ManagedBy   = "terraform"
  }
  name_prefix = "${var.project}-${var.environment}"
}

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

When to Use Each

Type	Use When
Input variable	Value differs between environments or users
Output	Exposing values to parent modules or CLI
Local	Computed values used multiple times in same module
Environment	CI/CD pipelines, secrets, overrides