Terragrunt vs. Terraform – Comparison & When to Use

Numerous DevOps tools are available to help streamline the process of infrastructure management and deployment. In this article, we will take a deep dive into two such tools: Terraform and Terragrunt.

Terraform is a widely used Infrastructure as Code (IaC) tool that enables users to define their infrastructure rather than manually configuring and managing it. Terraform allows for automation of infrastructure provisioning, configuration, and deployment not only across multiple cloud platforms, like AWS, GCP, and Azure but also for other products like Kubernetes, Datadog, VMware, etc.

Terragrunt, on the other hand, is a wrapper tool that was specifically developed to assist with the efficient maintenance and deployment of infrastructure. It provides a simple way to manage multiple Terraform modules and deployments, making it easier to manage complex infrastructures.

Throughout this article, we will explore both Terraform and Terragrunt individually to understand their purpose, features, and benefits. We will also compare and contrast the two tools, examining their similarities and differences. 

We will cover:

1. Terraform in a nutshell
2. Terragrunt in a nutshell
3. Why should I use Terragrunt?
4. Terragrunt and Terraform comparison
5. Is Terragrunt better than Terraform workspaces?
6. How to use Spacelift for Terraform and Terragrunt?

Terraform is an IaC tool developed by Hashicorp. Its primary function is to enable users to provision their infrastructure in a simple, efficient, and declarative manner through repeatable code. With Terraform, you can automate the process of infrastructure provisioning, configuration, and deployment, whether it be on cloud or on-premises environments.

Terraform features

Here a five key features that Terraform offers:

• Declarative language (HCL) — allows users to specify what should be the desired end state of the system using a declarative language that is easy to understand and write.
• State management — holds the current state of the infrastructure in a state file, making it easy to map real-world resources to your configuration.
• Modularity and reusability — with modules, you can encapsulate and reuse configurations for various parts of your infrastructure.
• Loops and conditionals — gives you the ability to write complex loops and conditionals, allowing you to create multiple resources of the same kind based on flags and other items while maintaining a clear declarative approach.
• Provide ecosystem — Terraform is cloud-agnostic and has a vast ecosystem of providers that allow you to manage services in your cloud provider (and other platforms).

Note: If you want to stay fully open-source, OpenTofu is the community-driven fork of Terraform that started from the last MPL-licensed version and continues to evolve independently. It aims to remain a drop-in replacement while adding features like built-in state encryption and early variable evaluation.

Terragrunt is an open-source orchestration tool developed by Gruntwork that sits on top of Terraform or OpenTofu. Its goal is to help you scale infrastructure-as-code by reducing repetition, standardizing patterns, and orchestrating complex, multi-module deployments.

Its primary goal is to reduce repetition in your Terraform code and simplify its structure, making it easier to manage and maintain. Terragrunt is based on the DRY (Do Not Repeat Yourself) concept, which involves reducing redundancy by using multiple Terraform modules and managing remote states.

Learn how to keep your configuration DRY with Terragrunt on Spacelift.

Terragrunt features

While Terraform does a great job on its own for most of the use cases, when it comes to respecting the DRY principle, modules will not be enough. With Terragrunt, you get:

• DRY configuration — gives you the ability to keep your code DRY by defining your configuration once and reusing it across multiple environments.
• Better remote state management — simplifies the overall management of your Terraform state files.
• Dependencies management — it can automatically manage dependencies between your Terraform modules, ensuring they are applied in the correct order.
• Before and after hooks — it supports before and after hooks, allowing you to execute custom actions and scripts before the Terraform commands.
• Stack-level orchestration – run OpenTofu/Terraform commands across multiple units/stacks, with automatic dependency ordering.
• Implicit and explicit stacks – directory-based organization vs blueprint-driven terragrunt.stack.hcl files for reusable patterns.
• Multi-engine support – choose OpenTofu or Terraform as the underlying engine, with compatibility guidance and versioning handled by your platform (e.g., Spacelift).

While working with Terraform, it is easy to write code for setting up an infrastructure limited to a single environment. However, if you are working on a project that involves multiple environments, you will need to duplicate the same code for each environment with different values, which can lead to code redundancy.

For instance, the below screenshot shows a typical Terraform project structure for deploying Azure storage account to various environments.

You can see that all the environments, including “int,” “staging,” and “prod,” have the same files. To write the code for each environment, you would copy and paste the same code from the .tf files and customize them based on the environment requirement.

In this scenario, the code for storageaccount.tf, variables.tf, and outputs.tf is replicated twice for every environment.

To deploy the code for the Int environment using Terraform, you need to take the following steps:

1. Change to the directory for the development environment by running cd '/Int'.
2. View the plan by running terraform plan.
3. Apply the plan by running terraform apply.

These steps need to be repeated for all other environments to provision them. Terragrunt can be incredibly useful in avoiding the repetition mentioned above. 

When using Terragrunt, .hcl files are utilized, and the Terraform code itself is structured into modules and kept in the modules folder.

The .hcl file refers to the actual module for the .tf file, while the actual Terraform code is stored in the modules folder along with its corresponding .tf file. Input values for the module are supplied in the relevant .hcl files, as shown below:

To deploy a storage account for the Dev environment in the folder structure mentioned above, you should execute the following commands:

1. Change to the ‘Dev’ environment directory by running cd /dev/1.dev.
2. Review the plan by running terragrunt plan.
3. Apply the plan by running terragrunt apply.

Terragrunt also offers the option to deploy resources for all environments at once by using the run-all switch. In the scenario mentioned above, if a storage account needs to be deployed to all environments, the following commands should be executed:

1. Change to the Terragrunt directory by running cd /Terragrunt.
2. Execute terragrunt run-all apply.

Terragrunt’s capability to deploy resources across multiple environments not only reduces code duplication but also aids in the efficient management of environment configurations. This is just one of the many use cases of Terragrunt.

Terragrunt is widely adopted and has a laundry list of use cases for users to leverage. The Gruntwork team has documented an official list of Terragrunt use cases, including managing multiple AWS accounts, handling dependencies between Terraform modules, and automating the deployment of Kubernetes clusters.

Recommended folder structure for organizing Terragrunt files can be found in the following GitHub repo.

Learn more with our Terragrunt tutorial.

Terraform and Terragrunt are complementary rather than competing tools. Terraform gives you the core IaC engine that talks to providers and creates resources. Terragrunt sits one layer above, focusing on how you structure, orchestrate, and reuse Terraform configurations across many modules, accounts, and environments.

Terraform is usually the right starting point: it’s the tool that actually provisions infrastructure, with a rich provider ecosystem and mature module story. Terragrunt becomes valuable once your Terraform estate starts to grow and you need stronger patterns for keeping things DRY, handling dependencies between stacks, and rolling out consistent changes across multiple environments.

Below you can find Terraform vs. Terragrunt table comparison.

Terragrunt and Terraform similarities

Both tools still have a lot in common:

1. Syntax and language – Both use HCL (HashiCorp Configuration Language) and a declarative model where you describe the desired state instead of writing step-by-step scripts.
2. Provider ecosystem – Terragrunt wraps Terraform, so you get access to the same providers and modules for AWS, Azure, Google Cloud, Kubernetes, Datadog, and many others.
3. Modularity – Both encourage breaking infrastructure into reusable modules so you can standardize patterns and share them across teams.
4. Version control and review – Configuration for both tools lives alongside your application code in Git, so you can use pull requests, code review, and CI/CD for infrastructure changes.
5. Multi-cloud support – Because Terragrunt orchestrates Terraform, both can be used to manage multi-cloud and hybrid setups through the same workflows.
6. Community – Both tools have a robust and active community of users, providing support, resources, and examples of how to use the tools effectively.

Differences between Terragrunt and Terraform

Where they diverge is in their focus and the problems they’re optimized to solve:

1. Purpose and abstraction level

Terraform is designed to build and configure infrastructure, while Terragrunt is an orchestration layer built on top of Terraform/OpenTofu, focused on managing multi-module, multi-environment architectures.

2. Project structure and DRY

Terraform gives you modules and workspaces, but on its own it’s easy to end up with duplicated folder structures per environment. Terragrunt adds opinionated patterns (shared configuration, hierarchical folder layouts, and programmatic stacks) so you can define values and patterns once and reuse them across multiple environments without copy/paste.

3. Dependencies and orchestration

Terraform can express dependencies between resources using references and the depends_on meta-argument, which works well inside a single state file. Terragrunt focuses on dependencies between modules and environments: it can model a dependency graph and ensure the right modules and environments are applied in the correct order, including fan-out and fan-in patterns for complex stacks.

Learn why and how to use Terraform’s depends_on meta-argument.

4. State and environment management

With Terraform alone, each workspace or folder typically has its own backend configuration and state file. Terragrunt centralizes and standardizes remote state configuration, so every environment follows the same pattern and state locations are generated for you instead of hand-crafted per project.

5. Stacks and large-scale rollouts

Modern Terragrunt introduces the concept of “stacks” and blueprints, allowing you to define environment patterns (for example, “dev”, “staging”, “prod”) and generate all the underlying units from a single stack file. You can then roll out those units with a single command. This is especially helpful when you want to codify standard environment topologies and reuse them in multiple places.

6. Learning curve and team maturity

Terraform alone is a good fit when you have a relatively small number of stacks or a single team managing infrastructure. Terragrunt tends to pay off as your estate grows. Multiple teams, many accounts and regions, a large module catalog, and the need for consistent patterns and orchestration. It adds an extra layer to learn, but it also gives platform teams more levers for standardization and reuse.

Terraform offers a feature called workspaces that helps reduce code redundancy and enables the provisioning of different environments. When using Terraform, a separate state file is created per workspace.

To illustrate this better, imagine the same folder structure described in the above examples for provisioning a storage account.

To create a new workspace and provision resources for dev environment, you would use following command:

1. terraform workspace new int – this creates a new workspace.
   To provision the resources, you would run the following command:
2. terraform plan – to run the plan
3. terraform apply – to apply the configuration

This creates a new state file for ‘dev’ workspace and maintains the infrastructure state. To provision another environment, we have to repeat the above steps per environment.

However, Terraform workspaces are a good option for local development and testing purposes. For production-grade deployments, it’s not a recommended feature. Terraform’s official documentation recommends avoiding using the workspaces feature for managing multiple environments.

Terragrunt handles the deployment of resources to different environments efficiently, not only by using a single command but also gives goods visibility and control over the source code for infrastructure provisioning. Hence, Terragrunt is an ideal tool when it comes to provisioning large-scale, complex infrastructure deployments.

Spacelift supports Terraform, OpenTofu, and Terragrunt out of the box and turns your infrastructure code into a secure, automated workflow. Instead of stitching together ad-hoc scripts and generic CI jobs, you get a dedicated platform for plans, applies, approvals, and visibility across all your stacks.

• Run Terraform, OpenTofu, and Terragrunt natively – choose the workflow tool per stack, and for Terragrunt stacks you can enable native run-all support and select whether Terragrunt should use Terraform or OpenTofu under the hood.
• Centralize state and detect drift automatically – import existing Terraform/OpenTofu state or let Spacelift manage it, schedule drift-detection runs, and use the Resources view to see exactly which resources have changed at stack or account level.
• Use dynamic cloud credentials – integrate with AWS, Azure, and GCP using short-lived credentials and OpenID Connect instead of long-lived access keys, so your Terragrunt and Terraform/OpenTofu runs stay secure by default.
• Enforce guardrails with policy as code – use Open Policy Agent (OPA) to define policies for plans, applies, and approvals, control which changes can be auto-applied, and standardize how notifications and escalations work across teams. 
• Reuse configuration safely – share environment variables, mounted files, and lifecycle hooks across many stacks using contexts, instead of duplicating configuration in each project.
• Offer secure self-service infrastructure – create Blueprints for your common architectures so engineers can spin up new environments or resources based on pre-approved Terraform / OpenTofu / Terragrunt templates, with guardrails baked in.
• Standardize internal building blocks – publish and consume your own modules and providers through Spacelift’s integrated module and provider registries, so teams use the same vetted components everywhere.

If you want to see how this looks in practice, create a free account today or book a demo with one of our engineers.

In this blog post, we explored two popular IaC tools – Terraform and Terragrunt. We have discussed how both of them are similar when it comes to handling infrastructure deployments and a few key differences between them. We have also touched upon how Terragrunt is better when compared to using Terraform workspaces for the deployment of resources to multiple environments.