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Testing Custom Terraform Providers with Atmos Components

· 3 min read
Erik Osterman
Erik Osterman
Founder @ Cloud Posse

If you develop Terraform providers, you can now test them locally with Atmos-managed components using Terraform's development overrides feature. This enables rapid iteration without publishing development versions to a registry.

Overview​

When developing Terraform providers, you need to test them with real infrastructure code. Terraform's development overrides let you point to locally-built provider binaries instead of downloading from a registry. This works with Atmos components.

How It Works​

Development overrides use two separate mechanisms that work together:

1. Provider Binary Location (Terraform CLI Config)​

Create a .terraformrc file in your component directory:

provider_installation {
  dev_overrides {
    "registry.terraform.io/myorg/myprovider" = "/absolute/path/to/provider/bin"
  }
  direct {}
}

This tells Terraform where to find your locally-built provider binary instead of downloading it from a registry.

2. Provider Configuration (Atmos Stack Manifests)​

Configure provider behavior using the providers section in your stack manifests as usual:

components:
  terraform:
    myapp:
      providers:
        myprovider:
          endpoint: "https://api.example.com"
          api_token: "{{ .settings.api_token }}"

      env:
        TF_CLI_CONFIG_FILE: ".terraformrc"

Atmos continues to generate providers_override.tf.json for provider configuration, while Terraform uses your local binary via dev_overrides.

Setup​

1. Create .terraformrc in your component directory

Place the file in your component folder (e.g., components/terraform/myapp/.terraformrc):

provider_installation {
  dev_overrides {
    "registry.terraform.io/myorg/myprovider" = "/absolute/path/to/provider/bin"
  }
  direct {}
}

Atmos executes Terraform from the component directory, so the file must be there.

2. Configure the environment variable

In your stack manifest:

components:
  terraform:
    myapp:
      env:
        TF_CLI_CONFIG_FILE: ".terraformrc"

3. Build and test your provider

# Build provider
cd providers/terraform-provider-myprovider
go build -o bin/terraform-provider-myprovider

# Test with Atmos
cd ../../
atmos terraform plan myapp -s dev

Terraform uses your local binary. Atmos handles configuration.

Workflow​

# Edit provider code
vim providers/terraform-provider-myprovider/provider.go

# Rebuild
cd providers/terraform-provider-myprovider
go build -o bin/terraform-provider-myprovider

# Test with Atmos
cd ../../
atmos terraform plan myapp -s dev

Changes are available immediately without publishing.

Key Points​

File location: The .terraformrc file goes in the component directory (e.g., components/terraform/myapp/.terraformrc), not the repository root. Add it to your component's .gitignore.

Template for teams: Provide .terraformrc.example with placeholder paths that team members update for their environment.

CLI configuration only: The provider_installation block must be in a Terraform CLI config file, not in .tf files.

Absolute paths: Use absolute paths to the directory containing the provider binary.

Warning message: Terraform shows "Warning: Provider development overrides are in effect" when using local providers.

Documentation​

Full documentation includes setup instructions, team collaboration patterns, and troubleshooting:

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