How does Terraform handle sensitive variables?

Terraform handles sensitive variables by managing them securely through environment variables. This approach helps ensure that sensitive data, such as API keys or passwords, are not hard-coded into configuration files or logged in plain text. By using environment variables, you can access these sensitive values without exposing them in your codebase, thus maintaining a higher level of security and reducing the risk of accidental leaks.

This method is part of Terraform's best practices for managing sensitive information. By externalizing sensitive data through environment variables, teams can control access to this information more effectively and align with security compliance requirements. This prevents sensitive values from being stored in version control systems or included in state files, which could lead to unintentional exposure.

Utilizing environment variables to manage sensitive information supports good security hygiene in infrastructure management, which is crucial in contemporary DevOps practices where infrastructure as code is prevalent.