We're thrilled to announce a suite of powerful new features from the Terraform on Azure Team that will revolutionize how you build, manage, and deploy infrastructure. These enhancements deliver an unprecedented end-to-end experience that makes Terraform on Azure more accessible, intelligent, and comprehensive than ever before.

Seamless Code Generation to Deployment Experience

Public Preview: October 2025

Say goodbye to starting from scratch. Our new integrated workflow transforms how you create and deploy Terraform configurations through a streamlined journey that begins right in the Azure portal.

With Copilot in Azure, you can now describe your infrastructure requirements in natural language and watch as production-ready Terraform code materializes before your eyes. This AI-powered assistant understands your intent and generates optimized HCL code that follows best practices—no more hunting through documentation or wrestling with syntax.

The experience seamlessly transitions to VS Code for the web, where you can view, refine, and iterate on your generated code in a familiar development environment. Make adjustments, test configurations, and collaborate with your team—all without leaving your browser. When you're satisfied with your infrastructure definition, deploy with confidence using either HCP Terraform or Azure for state management, ensuring your infrastructure remains consistent and trackable.

Unified VS Code Extension: Your Complete Terraform Toolkit

Public Preview: Available Now

We've consolidated the Terraform development experience into a single, powerful VS Code extension from Microsoft that serves as your command center for all things Terraform from Microsoft.

IntelliSense support for all Microsoft providers brings intelligent code completion, parameter hints, and inline documentation directly to your fingertips, dramatically reducing errors and accelerating development. No more context switching to check resource schemas or argument names—everything you need appears as you type.

Jump-start your projects with Code Samples that provide fully functional, production-ready templates for common Azure architectures. Whether you're building a microservices platform, data pipeline, or enterprise network, these samples give you a solid foundation to build upon.

The game-changing Export Terraform feature allows you to reverse-engineer your existing Azure infrastructure into clean HCL code directly from VS Code. This bridges the gap between manually created resources and Infrastructure as Code, making it easier than ever to adopt Terraform for existing environments.

Perhaps most importantly, the Policy/Preflight validation capability goes beyond traditional terraform plan by leveraging Azure's preflight system. This advanced validation catches configuration issues, policy violations, and potential deployment problems before they impact your environment. Validate against organizational policies, compliance requirements, and Azure best practices—all before a single resource is created.

MS Graph Provider: Extending Terraform Beyond Infrastructure

Public Preview: Available Now

Infrastructure doesn't exist in isolation, and neither should your Terraform configurations. The new MS Graph provider brings the same declarative power you love about the Azure provider to the entire Microsoft ecosystem.

Built with an AzAPI-like architecture for day-zero support of new features, this provider enables you to manage resources across the Microsoft platform including Microsoft 365 configurations, Windows settings, Enterprise Mobility + Security policies, and Dynamics 365 customizations. Manage users, groups, applications, and security policies alongside your Azure infrastructure—all in the same Terraform configuration.

This unified approach means you can now define your entire organizational IT landscape as code, from the Azure resources powering your applications to the Microsoft 365 settings governing user productivity and security policies protecting your data.

Ready to Transform Your Infrastructure Journey?

These features represent our commitment to making Terraform a first class tool for managing Azure and Microsoft resources. Whether you're new to Infrastructure as Code or a seasoned practitioner, these enhancements will accelerate your workflow and expand what's possible with Terraform.

Get started today by updating your VS Code extension and exploring the new Copilot experience in the Azure portal. The future of infrastructure automation on Azure is here—and it's more powerful than ever.

Visit our documentation to learn more and join our community to share feedback and connect with other Terraform on Azure users. Together, we're building the future of cloud infrastructure.

Terraform on Azure Product Group