Terraform workspaces provide isolation of state by environment, allowing separate state files for different environments within the same configuration.

• A. False
• B. They isolate state by environment
• C. They manage provider versions
• D. True

Answer: (D)

Terraform workspaces provide separate state for each workspace, meaning the same configuration can manage different environments (like dev, staging, prod) without mixing their resources. When you create or switch to another workspace, Terraform reads and writes to a distinct state file for that workspace while keeping the configuration identical. This allows you to apply changes to one environment without impacting the others, simply by selecting the appropriate workspace.

In practice, you’d initialize once, then create or switch workspaces (for example, dev or prod). The backend stores separate state per workspace, so the resources and their current state in dev are independent of prod, even though you’re using the same code. You can further differentiate resources by incorporating the workspace name into names or identifiers (such as bucket names or instance tags) using expressions like terraform.workspace, reinforcing the environment separation.

So, the statement is correct: Terraform workspaces provide isolation of state by environment, enabling separate state files for different environments within the same configuration.