The Terraform language uses configuration files that are named with the .tf file extension. There is also a JSON-based variant of the language that is named with the .tf.json file extension.

Configuration files must always use UTF-8 encoding, and by convention are usually maintained with Unix-style line endings (LF) rather than Windows-style line endings (CRLF), though both are accepted.

A module is a collection of .tf or .tf.json files kept together in a directory. The root module is built from the configuration files in the current working directory when Terraform is run, and this module may reference child modules in other directories, which can in turn reference other modules, etc.

The simplest Terraform configuration is a single root module containing only a single .tf file. A configuration can grow gradually as more resources are added, either by creating new configuration files within the root module or by organizing sets of resources into child modules.