File functions (file, templatefile) in Terraform - Step-by-Step Execution

Process Flow - File functions (file, templatefile)

Start Terraform config

↓

Call file() function

↓

Read file content as string

↓

Call templatefile() function

↓

Read template file

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Replace placeholders with variables

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Return final string

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Use string in resource or output

Terraform reads a file as a string with file(), or reads a template file and replaces variables with templatefile(), then uses the result in configuration.

Execution Sample

Terraform

locals {
  content = file("example.txt")
  message = templatefile("greeting.tpl", { name = "Alice" })
}

Reads a text file into 'content' and processes a template file replacing 'name' with 'Alice' into 'message'.

Process Table

Step	Function Called	Input	Action	Output
1	file()	"example.txt"	Reads entire file content as string	"Hello from example.txt\n"
2	templatefile()	"greeting.tpl", {name="Alice"}	Reads template and replaces ${name} with 'Alice'	"Hello, Alice! Welcome!\n"
3	Use outputs	locals.content, locals.message	Assigns strings to variables for later use	Variables hold file content and rendered template

💡 All file reads complete, variables hold final string values for use in Terraform

Status Tracker

Variable	Start	After file()	After templatefile()	Final
locals.content	""	"Hello from example.txt\n"	"Hello from example.txt\n"	"Hello from example.txt\n"
locals.message	""	""	"Hello, Alice! Welcome!\n"	"Hello, Alice! Welcome!\n"

Key Moments - 3 Insights

Why does file() return the whole file content as one string?

Because file() reads the entire file as plain text without processing, as shown in step 1 of the execution_table.

How does templatefile() replace variables inside the template?

templatefile() reads the template and substitutes placeholders like ${name} with provided values, as shown in step 2 of the execution_table.

Can file() process variables inside the file content?

No, file() only reads raw text. To process variables, use templatefile(), as shown by the difference between steps 1 and 2.

Visual Quiz - 3 Questions

Look at the execution_table, what is the output of file() at step 1?

A "Hello, Alice! Welcome!\n"

B "Hello from example.txt\n"

C "${name}"

D ""

💡 Hint

Check the Output column in row with Step 1 in execution_table

At which step does templatefile() replace variables in the template?

A Step 2

B Step 1

C Step 3

D No replacement occurs

💡 Hint

Look at the Function Called and Action columns in execution_table

If you want to read a file without variable substitution, which function should you use?

A templatefile()

B jsondecode()

C file()

D terraform()

💡 Hint

Refer to key_moments where file() reads raw text without processing

Concept Snapshot

file(path) reads entire file content as a string
templatefile(path, vars) reads a template file and replaces placeholders with vars
Use file() for raw text, templatefile() for variable substitution
Both return strings usable in Terraform configs
Files must exist and be readable for success

Full Transcript

This visual execution shows how Terraform's file() function reads a file's full content as a string, while templatefile() reads a template file and replaces variables inside it. First, file() reads example.txt and returns its text. Then, templatefile() reads greeting.tpl and replaces the placeholder ${name} with 'Alice'. The results are stored in local variables for use in Terraform resources or outputs. file() returns raw text without changes, while templatefile() processes variables. This helps beginners understand when to use each function and how Terraform handles file content.