Both Terraform Workspaces and Terragrunt promise an easier way to manage multiple environments, but they solve different problems. This guide explains where workspaces stop being helpful and Terragrunt starts adding real value.
1. Where Workspaces Fall Short (and Terragrunt Shines)
| Need | Why Workspaces Struggle | What Terragrunt Adds |
|---|---|---|
| Strong environment isolation(dev / stage / prod, multi-account) | All workspaces share one backend. HashiCorp themselves warn they’re “not a suitable isolation mechanism” for production-grade separation. | Each environment lives in its own folder with its own backend block, credentials, and state. Isolation is enforced by directory boundaries, not your memory of which workspace is active. |
| Don’t repeat yourself (DRY) across many stacks | You end up duplicating backend blocks and variable wiring in every root module. | terragrunt.hcl files can inherit settings (include, locals) so common config is written once and re-used everywhere. |
| Backend & state bootstrapping | Every module needs a handcrafted backend block plus terraform init -reconfigure. |
remote_state and generate blocks write that backend config for you—complete with locking and versioning. |
| Cross-module dependencies & orchestration | Workspaces can’t express “run networking before databases.” | dependency blocks + terragrunt run-all build a DAG and apply modules in the right order (in parallel when safe). |
| Version pinning & promotion | One workspace can’t point the same module at two different git/S3 versions. | Each env sets its own module source (?ref=v1.2.0), enabling immutable, version-based promotions (dev → stage → prod). |
| Safety & discoverability | Forgetting workspace select can destroy the wrong env; workspaces are invisible in code review. |
The folder path is the environment, so it’s obvious in PRs and CI can lint “no prod changes on feature branches.” |
| Hooks & glue logic | Terraform CLI has no pre/post hooks. | Terragrunt’s before_hook / after_hook run tests, notify Slack, rotate secrets, etc. |
2. Quick Decision Matrix
| Use Terraform Workspaces when… | Use Terragrunt when… |
|---|---|
| You’re a single team spinning up short-lived copies (e.g., PR previews) of one stack in the same backend. | You manage multiple long-lived environments or AWS accounts, need DRY config, or orchestrate dozens–hundreds of modules. |
3. Caveats of Adopting Terragrunt
- Extra layer & learning curve – Your team must grok both Terraform and Terragrunt HCL.
- CI/CD integration – Terraform Cloud/Enterprise doesn’t natively run Terragrunt; you’ll need an agent or wrapper script.
- Repo bloat – A folder-per-env layout grows quickly; good automation and code-owners keep it tidy.
4. Bottom Line
If you only juggle a handful of modules and environments, plain Terraform—possibly with separate directories—remains the simpler choice.
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