Sensitive Data in State

Terraform state can contain sensitive data, depending on the resources in use and your definition of "sensitive." The state contains resource IDs and all resource attributes. For resources such as databases, this may contain initial passwords.

When using local state, state is stored in plain-text JSON files.

When using remote state, state is only ever held in memory when used by Terraform. It may be encrypted at rest, but this depends on the specific remote state backend.

Recommendations

If you manage any sensitive data with Terraform (like database passwords, user passwords, or private keys), treat the state itself as sensitive data.

Storing state remotely can provide better security. As of Terraform 0.9, Terraform does not persist state to the local disk when remote state is in use, and some backends can be configured to encrypt the state data at rest.

For example:

• HCP Terraform always encrypts state at rest and protects it with TLS in transit. HCP Terraform also knows the identity of the user requesting state and maintains a history of state changes. This can be used to control access and track activity. Terraform Enterprise also supports detailed audit logging.
• The S3 backend supports encryption at rest when the encrypt option is enabled. IAM policies and logging can be used to identify any invalid access. Requests for the state go over a TLS connection.
• The GCS (Google Cloud Storage) backend supports using customer-supplied or customer-managed (Cloud KMS) encryption keys.