OpenTofu vs Terraform

OpenTofu is a fork of Terraform created in response to HashiCorp's August 2023 license change from MPL 2.0 to BSL (Business Source License). OpenTofu maintains the MPL 2.0 license and is governed by the Linux Foundation. Both tools are functionally similar, but they are diverging over time.

Why OpenTofu Exists

HashiCorp changed Terraform's license to BSL, which restricts using Terraform in products that compete with HashiCorp's commercial offerings. This alarmed companies building Terraform-based SaaS products (Spacelift, env0, Scalr) and organizations with open-source-only policies. The community forked Terraform 1.6 as OpenTofu, placing it under Linux Foundation governance.

Compatibility

OpenTofu started as a direct fork of Terraform 1.6 and maintains broad compatibility. Existing Terraform code, state files, providers, and modules work with OpenTofu with minimal changes. The CLI commands are identical (replacing terraform with tofu). Migration is straightforward for most projects.

Diverging Features

OpenTofu has added features not in Terraform:

• Client-side state encryption: Encrypt sensitive values in state files before they reach the backend. Terraform only supports backend-level encryption.
• Early variable/locals evaluation: Evaluate variables and locals before the main plan phase.

Terraform continues adding features under HashiCorp's roadmap that may not appear in OpenTofu, and vice versa. Over time, the two projects will diverge further.

Choosing Between Them

If licensing matters (you are a HashiCorp competitor, have open-source-only policies, or want community governance), choose OpenTofu. If you want HashiCorp's enterprise support, the latest HashiCorp features, and the largest community, stay with Terraform. Both are production-ready for IaC.

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