Terraform Hands-On: Installation and AWS Setup for Beginners - Part 1

Introduction

You've learned about Infrastructure as Code concepts and Terraform's architecture. Now it's time to get your hands dirty with actual implementation! In this comprehensive, hands-on series, we'll walk through every step of setting up Terraform, configuring AWS, and deploying real infrastructure to the cloud.

By the end of this series, you'll have practical experience creating, modifying, and destroying AWS infrastructure using Terraform. More importantly, you'll understand what's happening at each step and why—knowledge you can apply to any cloud provider or infrastructure project.

Understanding Terraform Installation

Before installing Terraform, it's helpful to understand what you're installing and why different methods exist for different operating systems.

What is Terraform?

Terraform is a single binary application written in Go. This means:

• No complex dependencies or runtime environments needed
• Works the same across all operating systems
• Easy to install and update
• Lightweight and fast to execute

Installation Methods Overview

Installing Terraform on RHEL/CentOS/Rocky Linux

We'll start with RHEL-based distributions since that's what we're using in this tutorial. This method works for RHEL 7/8/9, CentOS 7/8/9, Rocky Linux, AlmaLinux, and Fedora.

Step 1: Install yum-utils

First, we need yum-utils, which provides the yum-config-manager utility for managing repository configurations.

sudo yum install -y yum-utils

What this command does:

• sudo: Runs the command with administrative privileges
• yum install: Package installation command for RHEL-based systems
• -y: Automatically answers "yes" to all prompts
• yum-utils: Package containing repository management utilities

Expected output:

Last metadata expiration check: 1:06:51 ago on Fri 17 Oct 2025 12:17:09 AM PKT.
Dependencies resolved.
==============================================================================================================
 Package                    Architecture           Version                    Repository                Size
==============================================================================================================
Installing:
 yum-utils                  noarch                 4.3.0-23.el9               baseos                   39 k

Transaction Summary
==============================================================================================================
Install  1 Package

Total download size: 39 k
Installed size: 23 k
Downloading Packages:
yum-utils-4.3.0-23.el9.noarch.rpm                                             37 kB/s |  39 kB     00:01
--------------------------------------------------------------------------------------------------------------
Total                                                                         17 kB/s |  39 kB     00:02
Running transaction check
Transaction check succeeded.
Running transaction test
Transaction test succeeded.
Running transaction
  Preparing        :                                                                                     1/1
  Installing       : yum-utils-4.3.0-23.el9.noarch                                                       1/1
  Running scriptlet: yum-utils-4.3.0-23.el9.noarch                                                       1/1
  Verifying        : yum-utils-4.3.0-23.el9.noarch                                                       1/1

Installed:
  yum-utils-4.3.0-23.el9.noarch

Complete!

Understanding the output:

• Dependencies resolved: YUM calculated all required packages
• Transaction Summary: Shows 1 package will be installed
• Download size: 39 KB needs to be downloaded
• Installed size: Will occupy 23 KB after installation
• Verifying: Package integrity check completed successfully

Step 2: Add HashiCorp Repository

Now we add HashiCorp's official repository to our system's package sources:

sudo yum-config-manager --add-repo https://rpm.releases.hashicorp.com/RHEL/hashicorp.repo

What this command does:

• yum-config-manager: Utility for managing YUM repository configuration
• --add-repo: Adds a new repository to the system
• URL points to HashiCorp's official RHEL repository configuration

Expected output:

Adding repo from: https://rpm.releases.hashicorp.com/RHEL/hashicorp.repo

Why we add a repository: Repositories are collections of software packages maintained by organizations. HashiCorp maintains their own repository to ensure:

• You get authentic, verified Terraform packages
• Easy updates when new versions are released
• Access to other HashiCorp tools (Vault, Consul, etc.)
• Cryptographic signatures for package verification

Step 3: Install Terraform

With the repository added, we can now install Terraform:

sudo yum -y install terraform

What this command does:

• Connects to the HashiCorp repository
• Downloads the latest stable Terraform package
• Verifies the package signature for security
• Installs Terraform to /usr/bin/terraform
• Makes Terraform available system-wide

Expected output:

Hashicorp Stable - x86_64                                                     3.6 MB/s | 2.0 MB     00:00
Dependencies resolved.
==============================================================================================================
 Package                    Architecture           Version                    Repository                Size
==============================================================================================================
Installing:
 terraform                  x86_64                 1.13.4-1                   hashicorp                 30 M

Transaction Summary
==============================================================================================================
Install  1 Package

Total download size: 30 M
Installed size: 96 M
Downloading Packages:
terraform-1.13.4-1.x86_64.rpm                                                 7.5 MB/s |  30 MB     00:04
--------------------------------------------------------------------------------------------------------------
Total                                                                         7.5 MB/s |  30 MB     00:04
Hashicorp Stable - x86_64                                                      35 kB/s | 3.9 kB     00:00
Importing GPG key 0xA621E701:
 Userid     : "HashiCorp Security (HashiCorp Package Signing) <security+packaging@hashicorp.com>"
 Fingerprint: 798A EC65 4E5C 1542 8C8E 42EE AA16 FCBC A621 E701
 From       : https://rpm.releases.hashicorp.com/gpg
Key imported successfully
Running transaction check
Transaction check succeeded.
Running transaction test
Transaction test succeeded.
Running transaction
  Preparing        :                                                                                     1/1
  Installing       : terraform-1.13.4-1.x86_64                                                           1/1
  Verifying        : terraform-1.13.4-1.x86_64                                                           1/1

Installed:
  terraform-1.13.4-1.x86_64

Complete!

Understanding the output:

• GPG key verification: Ensures package authenticity and hasn't been tampered with
• Version 1.13.4: The specific Terraform version being installed
• 96 M installed size: Terraform binary plus documentation
• Transaction succeeded: Installation completed without errors

Step 4: Verify Installation

Always verify that Terraform installed correctly:

terraform version

Expected output:

Terraform v1.13.4
on linux_amd64

What this tells us:

• v1.13.4: Terraform version number
• linux_amd64: Operating system (Linux) and architecture (64-bit AMD/Intel)
• This confirms Terraform is properly installed and accessible in your PATH

Installing Terraform on Other Operating Systems

Ubuntu/Debian Linux

# Update package index and install dependencies
sudo apt-get update && sudo apt-get install -y gnupg software-properties-common

# Add HashiCorp GPG key
wget -O- https://apt.releases.hashicorp.com/gpg | \
    gpg --dearmor | \
    sudo tee /usr/share/keyrings/hashicorp-archive-keyring.gpg

# Verify the key fingerprint
gpg --no-default-keyring \
    --keyring /usr/share/keyrings/hashicorp-archive-keyring.gpg \
    --fingerprint

# Add HashiCorp repository
echo "deb [signed-by=/usr/share/keyrings/hashicorp-archive-keyring.gpg] \
    https://apt.releases.hashicorp.com $(lsb_release -cs) main" | \
    sudo tee /etc/apt/sources.list.d/hashicorp.list

# Update and install Terraform
sudo apt-get update && sudo apt-get install terraform

Key differences from RHEL:

• Uses apt-get instead of yum
• Requires explicit GPG key management
• Uses lsb_release to detect Ubuntu/Debian version

macOS with Homebrew

# Install Homebrew (if not already installed)
/bin/bash -c "$(curl -fsSL https://raw.githubusercontent.com/Homebrew/install/HEAD/install.sh)"

# Install Terraform
brew tap hashicorp/tap
brew install hashicorp/tap/terraform

Why Homebrew:

• Most popular macOS package manager
• Handles updates automatically
• Integrates well with macOS development workflows
• Also works on Linux as an alternative

Windows with Chocolatey

# Install Chocolatey (if not already installed) - Run as Administrator
Set-ExecutionPolicy Bypass -Scope Process -Force
[System.Net.ServicePointManager]::SecurityProtocol = [System.Net.ServicePointManager]::SecurityProtocol -bor 3072
iex ((New-Object System.Net.WebClient).DownloadString('https://community.chocolatey.org/install.ps1'))

# Install Terraform
choco install terraform

Windows alternative - Manual installation:

1. Download from https://www.terraform.io/downloads
2. Extract the ZIP file
3. Add terraform.exe location to PATH environment variable
4. Restart PowerShell/Command Prompt

Installing AWS CLI

Terraform will interact with AWS through the AWS APIs, but we need the AWS CLI to configure credentials and occasionally verify our infrastructure. The AWS CLI is a unified tool for managing AWS services from the command line.

Why Install AWS CLI?

Installing AWS CLI v2 on Linux

AWS CLI v2 is the current version with improved performance and new features. We'll download and install it using the official installation script.

# Download AWS CLI v2 installer
curl "https://awscli.amazonaws.com/awscli-exe-linux-x86_64.zip" -o "awscliv2.zip"

# Extract the downloaded archive
unzip awscliv2.zip

# Run the installer
sudo ./aws/install

Command breakdown:

Command 1: curl

• curl: Tool for transferring data from/to servers
• URL: AWS's official download location for Linux 64-bit
• -o "awscliv2.zip": Saves downloaded file as awscliv2.zip

Command 2: unzip

• Extracts the ZIP archive
• Creates an aws/ directory with installation files

Command 3: sudo ./aws/install

• Runs the installation script with administrator privileges
• Installs AWS CLI to /usr/local/bin/aws
• Makes it available system-wide

Expected output:

  % Total    % Received % Xferd  Average Speed   Time    Time     Time  Current
                                 Dload  Upload   Total   Spent    Left  Speed
100 59.3M  100 59.3M    0     0  4711k      0  0:00:12  0:00:12 --:--:-- 5953k
Archive:  awscliv2.zip
   creating: aws/
   creating: aws/dist/
  inflating: aws/README.md
  inflating: aws/install
  inflating: aws/THIRD_PARTY_LICENSES
  [... many more files ...]
You can now run: /usr/local/bin/aws --version

Understanding the output:

• 59.3M downloaded: Size of the AWS CLI installer
• Archive extraction: Lists all extracted files
• Installation confirmation: Shows where AWS CLI was installed

Verify AWS CLI Installation

aws --version

Expected output:

aws-cli/2.31.17 Python/3.13.7 Linux/5.14.0-620.el9.x86_64 exe/x86_64.centos.9

Output breakdown:

• aws-cli/2.31.17: AWS CLI version
• Python/3.13.7: Python version bundled with installer
• Linux/5.14.0-620.el9.x86_64: Your kernel version
• exe/x86_64.centos.9: Architecture and distribution

Installing AWS CLI on Other Platforms

macOS:

# Download installer
curl "https://awscli.amazonaws.com/AWSCLIV2.pkg" -o "AWSCLIV2.pkg"

# Install
sudo installer -pkg AWSCLIV2.pkg -target /

Windows:

1. Download the MSI installer from https://awscli.amazonaws.com/AWSCLIV2.msi
2. Run the downloaded MSI installer
3. Follow the installation wizard
4. Restart Command Prompt/PowerShell after installation

Configuring AWS Credentials

Before Terraform can create AWS resources, it needs permission to access your AWS account. This requires proper credential configuration following security best practices.

Understanding AWS IAM (Identity and Access Management)

What is IAM? IAM is AWS's service for managing access to AWS resources. It allows you to control:

• Who can access your AWS account (authentication)
• What they can do (authorization/permissions)
• How they access resources (access keys, passwords, roles)

IAM Best Practices for Terraform

The proper approach:

1. Create an IAM Group with specific permissions
2. Create an IAM User and add them to the group
3. Generate Access Keys for programmatic access
4. Configure AWS CLI with these credentials
5. Rotate credentials periodically for security

Step-by-Step: Creating IAM User for Terraform

Step 1: Sign in to AWS Console

• Go to https://console.aws.amazon.com/
• Sign in with your root account or IAM admin user

Step 2: Navigate to IAM Service

• Search for "IAM" in the AWS services search bar
• Click on "IAM" to open the Identity and Access Management dashboard

Step 3: Create IAM Group

Step 4: Create IAM User

Step 5: Save Access Keys

After creating the user, AWS displays the access keys only once:

Configuring AWS CLI with Credentials

Now we'll configure the AWS CLI with the credentials we just created:

aws configure

This interactive command will prompt you for four pieces of information:

Expected interaction:

AWS Access Key ID [None]: AKIA4ZPZU833B3O5OM46
AWS Secret Access Key [None]: Xm3p77IWUH4AKtggeoyw9G6POhwAUnWt8jDt1sM/
Default region name [None]: us-east-1
Default output format [None]: json

What each field means:

Understanding AWS Regions

AWS regions are geographic locations where AWS has data centers. Choosing the right region affects:

Popular AWS Regions:

• us-east-1 (N. Virginia): Largest, most services, often cheapest
• us-west-2 (Oregon): Popular alternative, newer facility
• eu-west-1 (Ireland): Main European region
• ap-southeast-1 (Singapore): Main Asia Pacific region
• eu-central-1 (Frankfurt): GDPR-compliant European option

Where Credentials are Stored

AWS CLI stores your credentials in files:

# Credentials file
~/.aws/credentials

Content:

[default]
aws_access_key_id = AKIA4ZPZU833B3O5OM46
aws_secret_access_key = Xm3p77IWUH4AKtggeoyw9G6POhwAUnWt8jDt1sM/

# Configuration file
~/.aws/config

Content:

[default]
region = us-east-1
output = json

Creating Your First Terraform Project

Now that Terraform and AWS are configured, let's create a proper project structure. Good organization from the start prevents confusion and makes your infrastructure more maintainable.

Understanding Project Structure

A well-organized Terraform project separates concerns and uses a modular approach:

mkdir terraform-practice

What this does:

• Creates a new directory for your Terraform project
• This will be your working directory
• All Terraform files and state will live here

Expected output: None (silent success)

Creating Directory Structure

Professional Terraform projects often separate code into modules and environments:

mkdir -p {modules,environments/dev,environments/prod}

Command breakdown:

• mkdir -p: Creates directories and parent directories as needed
• {}: Bash brace expansion creates multiple directories
• Creates: modules/, environments/dev/, and environments/prod/

Verify the structure:

tree

Expected output:

.
├── environments
│   ├── dev
│   └── prod
└── modules

4 directories, 0 files

Understanding this structure:

For this tutorial: We'll work in the root directory to keep things simple, but this structure shows you how real projects are organized.

Initializing Terraform

Before creating any configuration files, let's initialize Terraform in our directory:

terraform init

What this command does:

• Initializes the current directory as a Terraform working directory
• Creates a .terraform/ directory for provider plugins
• Prepares the backend for state storage
• Validates the directory structure

Expected output:

Terraform initialized in an empty directory!

The directory has no Terraform configuration files. You may begin working
with Terraform immediately by creating Terraform configuration files.

What this tells us:

• Terraform successfully initialized
• Directory is ready for configuration files
• No providers installed yet (we haven't specified any)
• We can now create .tf configuration files

Best Practices Summary

Installation Best Practices

AWS Security Best Practices

Project Organization Best Practices

Command Reference Cheat Sheet

Terraform Commands

AWS CLI Commands

System Commands

What's Next?

Part 1 of 3 in the Terraform Hands-On series. Continue with Part 2 to start writing Terraform configuration files and defining AWS infrastructure.