diff --git a/backend/local/backend_apply_test.go b/backend/local/backend_apply_test.go
index 303f92969..3e692ea24 100644
--- a/backend/local/backend_apply_test.go
+++ b/backend/local/backend_apply_test.go
@@ -53,6 +53,7 @@ func TestLocal_applyBasic(t *testing.T) {
 	checkState(t, b.StateOutPath, `
 test_instance.foo:
   ID = yes
+  provider = provider.test
 	`)
 }
 
@@ -160,6 +161,7 @@ func TestLocal_applyError(t *testing.T) {
 	checkState(t, b.StateOutPath, `
 test_instance.foo:
   ID = foo
+  provider = provider.test
 	`)
 }
 
@@ -211,6 +213,7 @@ func TestLocal_applyBackendFail(t *testing.T) {
 	checkState(t, "errored.tfstate", `
 test_instance.foo:
   ID = yes
+  provider = provider.test
 	`)
 }
 
diff --git a/backend/local/backend_plan_test.go b/backend/local/backend_plan_test.go
index b8698e8a4..de71555a7 100644
--- a/backend/local/backend_plan_test.go
+++ b/backend/local/backend_plan_test.go
@@ -199,48 +199,6 @@ func TestLocal_planDestroy(t *testing.T) {
 	}
 }
 
-func TestLocal_planDestroyNoConfig(t *testing.T) {
-	b := TestLocal(t)
-	p := TestLocalProvider(t, b, "test")
-	terraform.TestStateFile(t, b.StatePath, testPlanState())
-
-	outDir := testTempDir(t)
-	defer os.RemoveAll(outDir)
-	planPath := filepath.Join(outDir, "plan.tfplan")
-
-	op := testOperationPlan()
-	op.Destroy = true
-	op.PlanRefresh = true
-	op.Module = nil
-	op.PlanOutPath = planPath
-
-	run, err := b.Operation(context.Background(), op)
-	if err != nil {
-		t.Fatalf("bad: %s", err)
-	}
-	<-run.Done()
-	if run.Err != nil {
-		t.Fatalf("err: %s", err)
-	}
-
-	if !p.RefreshCalled {
-		t.Fatal("refresh should be called")
-	}
-
-	if run.PlanEmpty {
-		t.Fatal("plan should not be empty")
-	}
-
-	plan := testReadPlan(t, planPath)
-	for _, m := range plan.Diff.Modules {
-		for _, r := range m.Resources {
-			if !r.Destroy {
-				t.Fatalf("bad: %#v", r)
-			}
-		}
-	}
-}
-
 func TestLocal_planOutPathNoChange(t *testing.T) {
 	b := TestLocal(t)
 	TestLocalProvider(t, b, "test")
diff --git a/backend/local/backend_refresh_test.go b/backend/local/backend_refresh_test.go
index c6cc0bc0a..1d7a6f1cc 100644
--- a/backend/local/backend_refresh_test.go
+++ b/backend/local/backend_refresh_test.go
@@ -37,6 +37,7 @@ func TestLocal_refresh(t *testing.T) {
 	checkState(t, b.StateOutPath, `
 test_instance.foo:
   ID = yes
+  provider = provider.test
 	`)
 }
 
@@ -64,6 +65,7 @@ func TestLocal_refreshNilModule(t *testing.T) {
 	checkState(t, b.StateOutPath, `
 test_instance.foo:
   ID = yes
+  provider = provider.test
 	`)
 }
 
@@ -94,6 +96,7 @@ func TestLocal_refreshNilModuleWithInput(t *testing.T) {
 	checkState(t, b.StateOutPath, `
 test_instance.foo:
   ID = yes
+  provider = provider.test
 	`)
 }
 
@@ -137,6 +140,7 @@ func TestLocal_refreshInput(t *testing.T) {
 	checkState(t, b.StateOutPath, `
 test_instance.foo:
   ID = yes
+  provider = provider.test
 	`)
 }
 
@@ -170,6 +174,7 @@ func TestLocal_refreshValidate(t *testing.T) {
 	checkState(t, b.StateOutPath, `
 test_instance.foo:
   ID = yes
+  provider = provider.test
 	`)
 }
 
diff --git a/backend/local/backend_test.go b/backend/local/backend_test.go
index c22b92cd6..df71469ae 100644
--- a/backend/local/backend_test.go
+++ b/backend/local/backend_test.go
@@ -27,6 +27,7 @@ func TestLocal_backend(t *testing.T) {
 }
 
 func checkState(t *testing.T, path, expected string) {
+	t.Helper()
 	// Read the state
 	f, err := os.Open(path)
 	if err != nil {
diff --git a/command/import_test.go b/command/import_test.go
index 9f0f2d992..a75997fab 100644
--- a/command/import_test.go
+++ b/command/import_test.go
@@ -663,11 +663,11 @@ func TestImport_pluginDir(t *testing.T) {
 const testImportStr = `
 test_instance.foo:
   ID = yay
-  provider = test
+  provider = provider.test
 `
 
 const testImportCustomProviderStr = `
 test_instance.foo:
   ID = yay
-  provider = test.alias
+  provider = provider.test.alias
 `
diff --git a/command/refresh_test.go b/command/refresh_test.go
index 6106e53c5..bb04f39f5 100644
--- a/command/refresh_test.go
+++ b/command/refresh_test.go
@@ -802,8 +802,10 @@ foo = "bar"
 const testRefreshStr = `
 test_instance.foo:
   ID = yes
+  provider = provider.test
 `
 const testRefreshCwdStr = `
 test_instance.foo:
   ID = yes
+  provider = provider.test
 `
diff --git a/config/config.go b/config/config.go
index 96d63bf43..ebf30e0cd 100644
--- a/config/config.go
+++ b/config/config.go
@@ -69,15 +69,6 @@ type ProviderConfig struct {
 	Alias     string
 	Version   string
 	RawConfig *RawConfig
-
-	// Path records where the Provider was declared in a module tree, so that
-	// it can be copied into child module providers yet still interpolated in
-	// the correct scope.
-	Path []string
-
-	// Inherited is used to skip validation of this config, since any
-	// interpolated variables won't be declared at this level.
-	Inherited bool
 }
 
 // A resource represents a single Terraform resource in the configuration.
@@ -270,7 +261,9 @@ func (r *Resource) ProviderFullName() string {
 // the provider name is inferred from the resource type name.
 func ResourceProviderFullName(resourceType, explicitProvider string) string {
 	if explicitProvider != "" {
-		return explicitProvider
+		// check for an explicit provider name, or return the original
+		parts := strings.SplitAfter(explicitProvider, "provider.")
+		return parts[len(parts)-1]
 	}
 
 	idx := strings.IndexRune(resourceType, '_')
@@ -817,10 +810,6 @@ func (c *Config) rawConfigs() map[string]*RawConfig {
 	}
 
 	for _, pc := range c.ProviderConfigs {
-		// this was an inherited config, so we don't validate it at this level.
-		if pc.Inherited {
-			continue
-		}
 		source := fmt.Sprintf("provider config '%s'", pc.Name)
 		result[source] = pc.RawConfig
 	}
diff --git a/config/loader_test.go b/config/loader_test.go
index 0bc3b8b55..e1ba75c96 100644
--- a/config/loader_test.go
+++ b/config/loader_test.go
@@ -851,7 +851,6 @@ func TestLoadFile_ignoreChanges(t *testing.T) {
 	}
 
 	actual := resourcesStr(c.Resources)
-	print(actual)
 	if actual != strings.TrimSpace(ignoreChangesResourcesStr) {
 		t.Fatalf("bad:\n%s", actual)
 	}
@@ -943,7 +942,6 @@ func TestLoad_hclAttributes(t *testing.T) {
 	}
 
 	actual := resourcesStr(c.Resources)
-	print(actual)
 	if actual != strings.TrimSpace(jsonAttributeStr) {
 		t.Fatalf("bad:\n%s", actual)
 	}
@@ -988,7 +986,6 @@ func TestLoad_jsonAttributes(t *testing.T) {
 	}
 
 	actual := resourcesStr(c.Resources)
-	print(actual)
 	if actual != strings.TrimSpace(jsonAttributeStr) {
 		t.Fatalf("bad:\n%s", actual)
 	}
diff --git a/config/module/test-fixtures/basic-parent-providers/a/a.tf b/config/module/test-fixtures/basic-parent-providers/a/a.tf
deleted file mode 100644
index 8451bb1f9..000000000
--- a/config/module/test-fixtures/basic-parent-providers/a/a.tf
+++ /dev/null
@@ -1,13 +0,0 @@
-provider "top" {}
-
-provider "bottom" {
-    alias = "foo"
-    value = "from bottom"
-}
-
-module "c" {
-    source = "../c"
-    providers = {
-        "bottom" = "bottom.foo"
-    }
-}
diff --git a/config/module/test-fixtures/basic-parent-providers/c/c.tf b/config/module/test-fixtures/basic-parent-providers/c/c.tf
deleted file mode 100644
index d1e2809ce..000000000
--- a/config/module/test-fixtures/basic-parent-providers/c/c.tf
+++ /dev/null
@@ -1,2 +0,0 @@
-# Hello
-provider "bottom" {}
diff --git a/config/module/test-fixtures/basic-parent-providers/main.tf b/config/module/test-fixtures/basic-parent-providers/main.tf
deleted file mode 100644
index b9009b6c6..000000000
--- a/config/module/test-fixtures/basic-parent-providers/main.tf
+++ /dev/null
@@ -1,11 +0,0 @@
-provider "top" {
-    alias = "foo"
-    value = "from top"
-}
-
-module "a" {
-    source = "./a"
-    providers = {
-        "top" = "top.foo"
-    }
-}
diff --git a/config/module/tree.go b/config/module/tree.go
index c649a4663..0bf6b93f7 100644
--- a/config/module/tree.go
+++ b/config/module/tree.go
@@ -188,11 +188,6 @@ func (t *Tree) Load(s *Storage) error {
 	// Set our tree up
 	t.children = children
 
-	// if we're the root module, we can now set the provider inheritance
-	if len(t.path) == 0 {
-		t.inheritProviderConfigs(nil)
-	}
-
 	return nil
 }
 
@@ -348,93 +343,6 @@ func (t *Tree) getChildren(s *Storage) (map[string]*Tree, error) {
 	return children, nil
 }
 
-// inheritProviderConfig resolves all provider config inheritance after the
-// tree is loaded.
-//
-// If there is a provider block without a config, look in the parent's Module
-// block for a provider, and fetch that provider's configuration. If that
-// doesn't exist, assume a default empty config. Implicit providers can still
-// inherit their config all the way up from the root, so walk up the tree and
-// copy the first matching provider into the module.
-func (t *Tree) inheritProviderConfigs(stack []*Tree) {
-	// the recursive calls only append, so we don't need to worry about copying
-	// this slice.
-	stack = append(stack, t)
-	for _, c := range t.children {
-		c.inheritProviderConfigs(stack)
-	}
-
-	if len(stack) == 1 {
-		return
-	}
-
-	providers := make(map[string]*config.ProviderConfig)
-	missingProviders := make(map[string]bool)
-
-	for _, p := range t.config.ProviderConfigs {
-		providers[p.FullName()] = p
-	}
-
-	for _, r := range t.config.Resources {
-		p := r.ProviderFullName()
-		if _, ok := providers[p]; !(ok || strings.Contains(p, ".")) {
-			missingProviders[p] = true
-		}
-	}
-
-	// get our parent's module config block
-	parent := stack[len(stack)-2]
-	var parentModule *config.Module
-	for _, m := range parent.config.Modules {
-		if m.Name == t.name {
-			parentModule = m
-			break
-		}
-	}
-
-	if parentModule == nil {
-		panic("can't be a module without a parent module config")
-	}
-
-	// now look for providers that need a config
-	for p, pc := range providers {
-		if len(pc.RawConfig.RawMap()) > 0 {
-			log.Printf("[TRACE] provider %q has a config, continuing", p)
-			continue
-		}
-
-		// this provider has no config yet, check for one being passed in
-		parentProviderName, ok := parentModule.Providers[p]
-		if !ok {
-			continue
-		}
-
-		var parentProvider *config.ProviderConfig
-		// there's a config for us in the parent module
-		for _, pp := range parent.config.ProviderConfigs {
-			if pp.FullName() == parentProviderName {
-				parentProvider = pp
-				break
-			}
-		}
-
-		if parentProvider == nil {
-			// no config found, assume defaults
-			continue
-		}
-
-		// Copy it in, but set an interpolation Scope.
-		// An interpolation Scope always need to have "root"
-		pc.Path = append([]string{RootName}, parent.path...)
-		pc.RawConfig = parentProvider.RawConfig
-		log.Printf("[TRACE] provider %q inheriting config from %q",
-			strings.Join(append(t.Path(), pc.FullName()), "."),
-			strings.Join(append(parent.Path(), parentProvider.FullName()), "."),
-		)
-	}
-
-}
-
 // Path is the full path to this tree.
 func (t *Tree) Path() []string {
 	return t.path
diff --git a/config/module/tree_test.go b/config/module/tree_test.go
index acc622c3f..5e9abba4b 100644
--- a/config/module/tree_test.go
+++ b/config/module/tree_test.go
@@ -3,7 +3,6 @@ package module
 import (
 	"fmt"
 	"io/ioutil"
-	"log"
 	"os"
 	"path/filepath"
 	"reflect"
@@ -548,69 +547,6 @@ func TestTreeValidate_unknownModule(t *testing.T) {
 	}
 }
 
-func TestTreeProviders_basic(t *testing.T) {
-	storage := testStorage(t, nil)
-	tree := NewTree("", testConfig(t, "basic-parent-providers"))
-
-	storage.Mode = GetModeGet
-	if err := tree.Load(storage); err != nil {
-		t.Fatalf("err: %s", err)
-	}
-
-	var a, b *Tree
-	for _, child := range tree.Children() {
-		if child.Name() == "a" {
-			a = child
-		}
-	}
-
-	rootProviders := tree.config.ProviderConfigsByFullName()
-	topRaw := rootProviders["top.foo"]
-
-	if a == nil {
-		t.Fatal("could not find module 'a'")
-	}
-
-	for _, child := range a.Children() {
-		if child.Name() == "c" {
-			b = child
-		}
-	}
-
-	if b == nil {
-		t.Fatal("could not find module 'c'")
-	}
-
-	aProviders := a.config.ProviderConfigsByFullName()
-	bottomRaw := aProviders["bottom.foo"]
-	bProviders := b.config.ProviderConfigsByFullName()
-	bBottom := bProviders["bottom"]
-
-	// compare the configs
-	// top.foo should have been copied to a.top
-	aTop := aProviders["top"]
-	if !reflect.DeepEqual(aTop.RawConfig.RawMap(), topRaw.RawConfig.RawMap()) {
-		log.Fatalf("expected config %#v, got %#v",
-			topRaw.RawConfig.RawMap(),
-			aTop.RawConfig.RawMap(),
-		)
-	}
-
-	if !reflect.DeepEqual(aTop.Path, []string{RootName}) {
-		log.Fatalf(`expected scope for "top": {"root"}, got %#v`, aTop.Path)
-	}
-
-	if !reflect.DeepEqual(bBottom.RawConfig.RawMap(), bottomRaw.RawConfig.RawMap()) {
-		t.Fatalf("expected config %#v, got %#v",
-			bottomRaw.RawConfig.RawMap(),
-			bBottom.RawConfig.RawMap(),
-		)
-	}
-	if !reflect.DeepEqual(bBottom.Path, []string{RootName, "a"}) {
-		t.Fatalf(`expected scope for "bottom": {"root", "a"}, got %#v`, bBottom.Path)
-	}
-}
-
 func TestTreeLoad_conflictingSubmoduleNames(t *testing.T) {
 	storage := testStorage(t, nil)
 	tree := NewTree("", testConfig(t, "conficting-submodule-names"))
diff --git a/terraform/context_apply_test.go b/terraform/context_apply_test.go
index c2e23dffb..094029044 100644
--- a/terraform/context_apply_test.go
+++ b/terraform/context_apply_test.go
@@ -129,6 +129,7 @@ func TestContext2Apply_escape(t *testing.T) {
 	checkStateString(t, state, `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   foo = "bar"
   type = aws_instance
 `)
@@ -160,6 +161,7 @@ func TestContext2Apply_resourceCountOneList(t *testing.T) {
 	actual := strings.TrimSpace(state.String())
 	expected := strings.TrimSpace(`null_resource.foo:
   ID = foo
+  provider = provider.null
 
 Outputs:
 
@@ -578,6 +580,7 @@ amis_from_module = {eu-west-1:ami-789012 eu-west-2:ami-989484 us-west-1:ami-1234
 module.test:
   null_resource.noop:
     ID = foo
+    provider = provider.null
 
   Outputs:
 
@@ -745,6 +748,7 @@ func TestContext2Apply_providerWarning(t *testing.T) {
 	expected := strings.TrimSpace(`
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
 	`)
 	if actual != expected {
 		t.Fatalf("got: \n%s\n\nexpected:\n%s", actual, expected)
@@ -1032,11 +1036,13 @@ func TestContext2Apply_createBeforeDestroy_dependsNonCBD(t *testing.T) {
 	checkStateString(t, state, `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   require_new = yes
   type = aws_instance
   value = foo
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   require_new = yes
   type = aws_instance
 	`)
@@ -1170,10 +1176,12 @@ func TestContext2Apply_createBeforeDestroy_deposedCount(t *testing.T) {
 	checkStateString(t, state, `
 aws_instance.bar.0:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 aws_instance.bar.1:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 	`)
@@ -1233,6 +1241,7 @@ func TestContext2Apply_createBeforeDestroy_deposedOnly(t *testing.T) {
 	checkStateString(t, state, `
 aws_instance.bar:
   ID = bar
+  provider = provider.aws
 	`)
 }
 
@@ -2007,6 +2016,7 @@ func TestContext2Apply_cancelBlock(t *testing.T) {
 	checkStateString(t, state, `
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
 	`)
 }
 
@@ -2066,6 +2076,7 @@ func TestContext2Apply_cancelProvisioner(t *testing.T) {
 	checkStateString(t, state, `
 aws_instance.foo: (tainted)
   ID = foo
+  provider = provider.aws
   num = 2
   type = aws_instance
 	`)
@@ -2448,10 +2459,12 @@ func TestContext2Apply_mapVariableOverride(t *testing.T) {
 	expected := strings.TrimSpace(`
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   ami = overridden
   type = aws_instance
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   ami = image-1234
   type = aws_instance
 	`)
@@ -2619,7 +2632,7 @@ func TestContext2Apply_moduleInheritAlias(t *testing.T) {
 module.child:
   aws_instance.foo:
     ID = foo
-    provider = aws.eu
+    provider = provider.aws.eu
 	`)
 }
 
@@ -3140,6 +3153,7 @@ func TestContext2Apply_moduleTarget(t *testing.T) {
 module.A:
   aws_instance.foo:
     ID = foo
+    provider = provider.aws
     foo = bar
     type = aws_instance
 
@@ -3149,6 +3163,7 @@ module.A:
 module.B:
   aws_instance.bar:
     ID = foo
+    provider = provider.aws
     foo = foo
     type = aws_instance
 	`)
@@ -3929,6 +3944,7 @@ func TestContext2Apply_outputDependsOn(t *testing.T) {
 		checkStateString(t, state, `
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
 
 Outputs:
 
@@ -4560,6 +4576,7 @@ func TestContext2Apply_multiDepose_createBeforeDestroy(t *testing.T) {
 	checkStateString(t, state, `
 aws_instance.web: (1 deposed)
   ID = bar
+  provider = provider.aws
   Deposed ID 1 = foo
 	`)
 
@@ -4584,6 +4601,7 @@ aws_instance.web: (1 deposed)
 	checkStateString(t, state, `
 aws_instance.web: (2 deposed)
   ID = baz
+  provider = provider.aws
   Deposed ID 1 = foo
   Deposed ID 2 = bar
 	`)
@@ -4611,6 +4629,7 @@ aws_instance.web: (2 deposed)
 	checkStateString(t, state, `
 aws_instance.web: (1 deposed)
   ID = qux
+  provider = provider.aws
   Deposed ID 1 = bar
 	`)
 
@@ -4632,6 +4651,7 @@ aws_instance.web: (1 deposed)
 	checkStateString(t, state, `
 aws_instance.web:
   ID = quux
+  provider = provider.aws
 	`)
 }
 
@@ -4672,6 +4692,7 @@ func TestContext2Apply_provisionerFailContinue(t *testing.T) {
 	checkStateString(t, state, `
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
   `)
@@ -5067,6 +5088,7 @@ func TestContext2Apply_provisionerDestroyTainted(t *testing.T) {
 	checkStateString(t, state, `
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 	`)
@@ -5935,12 +5957,13 @@ func TestContext2Apply_destroyOrder(t *testing.T) {
 
 	t.Logf("State 1: %s", state)
 
-	// Next, plan and apply config-less to force a destroy with "apply"
+	// Next, plan and apply a destroy
 	h.Active = true
 	ctx = testContext2(t, &ContextOpts{
-		State:  state,
-		Module: module.NewEmptyTree(),
-		Hooks:  []Hook{h},
+		Destroy: true,
+		State:   state,
+		Module:  m,
+		Hooks:   []Hook{h},
 		ProviderResolver: ResourceProviderResolverFixed(
 			map[string]ResourceProviderFactory{
 				"aws": testProviderFuncFixed(p),
@@ -7370,6 +7393,7 @@ func TestContext2Apply_targeted(t *testing.T) {
 	checkStateString(t, state, `
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   num = 2
   type = aws_instance
 	`)
@@ -7402,10 +7426,13 @@ func TestContext2Apply_targetedCount(t *testing.T) {
 	checkStateString(t, state, `
 aws_instance.foo.0:
   ID = foo
+  provider = provider.aws
 aws_instance.foo.1:
   ID = foo
+  provider = provider.aws
 aws_instance.foo.2:
   ID = foo
+  provider = provider.aws
 	`)
 }
 
@@ -7436,6 +7463,7 @@ func TestContext2Apply_targetedCountIndex(t *testing.T) {
 	checkStateString(t, state, `
 aws_instance.foo.1:
   ID = foo
+  provider = provider.aws
 	`)
 }
 
@@ -7673,10 +7701,12 @@ func TestContext2Apply_targetedModule(t *testing.T) {
 module.child:
   aws_instance.bar:
     ID = foo
+    provider = provider.aws
     num = 2
     type = aws_instance
   aws_instance.foo:
     ID = foo
+    provider = provider.aws
     num = 2
     type = aws_instance
 	`)
@@ -7712,6 +7742,7 @@ func TestContext2Apply_targetedModuleDep(t *testing.T) {
 	checkStateString(t, state, `
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   foo = foo
   type = aws_instance
 
@@ -7721,6 +7752,7 @@ aws_instance.foo:
 module.child:
   aws_instance.mod:
     ID = foo
+    provider = provider.aws
 
   Outputs:
 
@@ -7795,6 +7827,7 @@ module.child1:
 module.child2:
   aws_instance.foo:
     ID = foo
+    provider = provider.aws
 
   Outputs:
 
@@ -7836,6 +7869,7 @@ func TestContext2Apply_targetedModuleResource(t *testing.T) {
 module.child:
   aws_instance.foo:
     ID = foo
+    provider = provider.aws
     num = 2
     type = aws_instance
 	`)
@@ -8289,6 +8323,7 @@ func TestContext2Apply_issue5254(t *testing.T) {
 	expected := strings.TrimSpace(`
 template_file.child:
   ID = foo
+  provider = provider.template
   template = Hi
   type = template_file
 
@@ -8296,6 +8331,7 @@ template_file.child:
     template_file.parent.*
 template_file.parent:
   ID = foo
+  provider = provider.template
   template = Hi
   type = template_file
 		`)
@@ -8371,6 +8407,7 @@ func TestContext2Apply_targetedWithTaintedInState(t *testing.T) {
 	expected := strings.TrimSpace(`
 aws_instance.iambeingadded:
   ID = foo
+  provider = provider.aws
 aws_instance.ifailedprovisioners: (tainted)
   ID = ifailedprovisioners
 		`)
@@ -8416,6 +8453,7 @@ func TestContext2Apply_ignoreChangesCreate(t *testing.T) {
 	expected := strings.TrimSpace(`
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   required_field = set
   type = aws_instance
 `)
@@ -8560,6 +8598,7 @@ func TestContext2Apply_ignoreChangesWildcard(t *testing.T) {
 	expected := strings.TrimSpace(`
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   required_field = set
   type = aws_instance
 `)
@@ -8820,6 +8859,7 @@ func TestContext2Apply_targetedModuleRecursive(t *testing.T) {
 module.child.subchild:
   aws_instance.foo:
     ID = foo
+    provider = provider.aws
     num = 2
     type = aws_instance
 	`)
@@ -8868,7 +8908,6 @@ func TestContext2Apply_destroyWithLocals(t *testing.T) {
 	p.ApplyFn = testApplyFn
 	p.DiffFn = func(info *InstanceInfo, s *InstanceState, c *ResourceConfig) (*InstanceDiff, error) {
 		d, err := testDiffFn(info, s, c)
-		fmt.Println("DIFF:", d)
 		return d, err
 	}
 
@@ -8977,10 +9016,79 @@ func TestContext2Apply_providerWithLocals(t *testing.T) {
 		t.Fatal("expected no state, got:", state)
 	}
 
-	// Destroy won't work because the local value is removed before the
-	// provider.  Once this is fixed this test will start to fail, and we
-	// can remove the invalid interpolation string;
 	if providerRegion != "bar" {
 		t.Fatalf("expected region %q, got: %q", "bar", providerRegion)
 	}
 }
+
+func TestContext2Apply_destroyWithProviders(t *testing.T) {
+	m := testModule(t, "destroy-module-with-provider")
+	p := testProvider("aws")
+	p.ApplyFn = testApplyFn
+	p.DiffFn = testDiffFn
+
+	s := &State{
+		Modules: []*ModuleState{
+			&ModuleState{
+				Path: rootModulePath,
+			},
+			&ModuleState{
+				Path: []string{"root", "child"},
+			},
+			&ModuleState{
+				Path: []string{"root", "mod", "removed"},
+				Resources: map[string]*ResourceState{
+					"aws_instance.child": &ResourceState{
+						Type: "aws_instance",
+						Primary: &InstanceState{
+							ID: "bar",
+						},
+						// this provider doesn't exist
+						Provider: "provider.aws.baz",
+					},
+				},
+			},
+		},
+	}
+
+	ctx := testContext2(t, &ContextOpts{
+		Module: m,
+		ProviderResolver: ResourceProviderResolverFixed(
+			map[string]ResourceProviderFactory{
+				"aws": testProviderFuncFixed(p),
+			},
+		),
+		State:   s,
+		Destroy: true,
+	})
+
+	// test that we can't destroy if the provider is missing
+	if _, err := ctx.Plan(); err == nil {
+		t.Fatal("expected plan error, provider.aws.baz doesn't exist")
+	}
+
+	// correct the state
+	s.Modules[2].Resources["aws_instance.child"].Provider = "provider.aws.bar"
+
+	if _, err := ctx.Plan(); err != nil {
+		t.Fatal(err)
+	}
+	state, err := ctx.Apply()
+	if err != nil {
+		t.Fatalf("error during apply: %s", err)
+	}
+
+	got := strings.TrimSpace(state.String())
+
+	// This should fail once modules are removed from the state entirely.
+	want := strings.TrimSpace(`
+<no state>
+module.child:
+  <no state>
+module.mod.removed:
+  <no state>`)
+
+	if got != want {
+		t.Fatalf("wrong final state\ngot:\n%s\nwant:\n%s", got, want)
+	}
+}
diff --git a/terraform/context_import_test.go b/terraform/context_import_test.go
index 7a57f5a31..2a258392b 100644
--- a/terraform/context_import_test.go
+++ b/terraform/context_import_test.go
@@ -801,13 +801,13 @@ func TestContextImport_customProvider(t *testing.T) {
 const testImportStr = `
 aws_instance.foo:
   ID = foo
-  provider = aws
+  provider = provider.aws
 `
 
 const testImportCountIndexStr = `
 aws_instance.foo.0:
   ID = foo
-  provider = aws
+  provider = provider.aws
 `
 
 const testImportCollisionStr = `
@@ -820,7 +820,7 @@ const testImportModuleStr = `
 module.foo:
   aws_instance.foo:
     ID = foo
-    provider = aws
+    provider = provider.aws
 `
 
 const testImportModuleDepth2Str = `
@@ -828,7 +828,7 @@ const testImportModuleDepth2Str = `
 module.a.b:
   aws_instance.foo:
     ID = foo
-    provider = aws
+    provider = provider.aws
 `
 
 const testImportModuleDiffStr = `
@@ -838,7 +838,7 @@ module.bar:
 module.foo:
   aws_instance.foo:
     ID = foo
-    provider = aws
+    provider = provider.aws
 `
 
 const testImportModuleExistingStr = `
@@ -847,39 +847,39 @@ module.foo:
     ID = bar
   aws_instance.foo:
     ID = foo
-    provider = aws
+    provider = provider.aws
 `
 
 const testImportMultiStr = `
 aws_instance.foo:
   ID = foo
-  provider = aws
+  provider = provider.aws
 aws_instance_thing.foo:
   ID = bar
-  provider = aws
+  provider = provider.aws
 `
 
 const testImportMultiSameStr = `
 aws_instance.foo:
   ID = foo
-  provider = aws
+  provider = provider.aws
 aws_instance_thing.foo:
   ID = bar
-  provider = aws
+  provider = provider.aws
 aws_instance_thing.foo-1:
   ID = qux
-  provider = aws
+  provider = provider.aws
 `
 
 const testImportRefreshStr = `
 aws_instance.foo:
   ID = foo
-  provider = aws
+  provider = provider.aws
   foo = bar
 `
 
 const testImportCustomProviderStr = `
 aws_instance.foo:
   ID = foo
-  provider = aws.alias
+  provider = provider.aws.alias
 `
diff --git a/terraform/context_input_test.go b/terraform/context_input_test.go
index 8c2099855..0e94bf3c9 100644
--- a/terraform/context_input_test.go
+++ b/terraform/context_input_test.go
@@ -564,6 +564,7 @@ func TestContext2Input_varWithDefault(t *testing.T) {
 	expectedStr := strings.TrimSpace(`
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   foo = 123
   type = aws_instance
 	`)
diff --git a/terraform/context_plan_test.go b/terraform/context_plan_test.go
index 3eb213028..8240e435f 100644
--- a/terraform/context_plan_test.go
+++ b/terraform/context_plan_test.go
@@ -3527,28 +3527,34 @@ STATE:
 
 aws_instance.bar.0:
   ID = bar0
+  provider = provider.aws
 
   Dependencies:
     aws_instance.foo.*
 aws_instance.bar.1:
   ID = bar1
+  provider = provider.aws
 
   Dependencies:
     aws_instance.foo.*
 aws_instance.baz.0:
   ID = baz0
+  provider = provider.aws
 
   Dependencies:
     aws_instance.bar.*
 aws_instance.baz.1:
   ID = baz1
+  provider = provider.aws
 
   Dependencies:
     aws_instance.bar.*
 aws_instance.foo.0:
   ID = foo0
+  provider = provider.aws
 aws_instance.foo.1:
   ID = foo1
+  provider = provider.aws
 `)
 	if actual != expected {
 		t.Fatalf("bad:\n%s\n\nexpected\n\n%s", actual, expected)
diff --git a/terraform/context_refresh_test.go b/terraform/context_refresh_test.go
index 0065a458c..53e5534cd 100644
--- a/terraform/context_refresh_test.go
+++ b/terraform/context_refresh_test.go
@@ -1110,3 +1110,53 @@ func TestContext2Refresh_noDiffHookOnScaleOut(t *testing.T) {
 		t.Fatal("PostDiff should not have been called")
 	}
 }
+
+func TestContext2Refresh_updateProviderInState(t *testing.T) {
+	m := testModule(t, "update-resource-provider")
+	p := testProvider("aws")
+
+	p.DiffFn = testDiffFn
+	p.ApplyFn = testApplyFn
+
+	s := &State{
+		Modules: []*ModuleState{
+			&ModuleState{
+				Path: rootModulePath,
+				Resources: map[string]*ResourceState{
+					"aws_instance.bar": &ResourceState{
+						Type: "aws_instance",
+						Primary: &InstanceState{
+							ID: "foo",
+						},
+						Provider: "provider.aws.baz",
+					},
+				},
+			},
+		},
+	}
+
+	ctx := testContext2(t, &ContextOpts{
+		Module: m,
+		ProviderResolver: ResourceProviderResolverFixed(
+			map[string]ResourceProviderFactory{
+				"aws": testProviderFuncFixed(p),
+			},
+		),
+		State: s,
+	})
+
+	expected := strings.TrimSpace(`
+aws_instance.bar:
+  ID = foo
+  provider = provider.aws.foo`)
+
+	state, err := ctx.Refresh()
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	actual := state.String()
+	if actual != expected {
+		t.Fatalf("expected:\n%s\n\ngot:\n%s", expected, actual)
+	}
+}
diff --git a/terraform/context_test.go b/terraform/context_test.go
index b7064bef0..7ef9245d7 100644
--- a/terraform/context_test.go
+++ b/terraform/context_test.go
@@ -147,6 +147,7 @@ func TestNewContextState(t *testing.T) {
 }
 
 func testContext2(t *testing.T, opts *ContextOpts) *Context {
+	t.Helper()
 	// Enable the shadow graph
 	opts.Shadow = true
 
@@ -360,6 +361,7 @@ func testProvisioner() *MockResourceProvisioner {
 }
 
 func checkStateString(t *testing.T, state *State, expected string) {
+	t.Helper()
 	actual := strings.TrimSpace(state.String())
 	expected = strings.TrimSpace(expected)
 
@@ -380,6 +382,7 @@ func resourceState(resourceType, resourceID string) *ResourceState {
 // Test helper that gives a function 3 seconds to finish, assumes deadlock and
 // fails test if it does not.
 func testCheckDeadlock(t *testing.T, f func()) {
+	t.Helper()
 	timeout := make(chan bool, 1)
 	done := make(chan bool, 1)
 	go func() {
@@ -413,15 +416,18 @@ root
 const testContextRefreshModuleStr = `
 aws_instance.web: (tainted)
   ID = bar
+  provider = provider.aws
 
 module.child:
   aws_instance.web:
     ID = new
+    provider = provider.aws
 `
 
 const testContextRefreshOutputStr = `
 aws_instance.web:
   ID = foo
+  provider = provider.aws
   foo = bar
 
 Outputs:
@@ -436,4 +442,5 @@ const testContextRefreshOutputPartialStr = `
 const testContextRefreshTaintedStr = `
 aws_instance.web: (tainted)
   ID = foo
+  provider = provider.aws
 `
diff --git a/terraform/eval_context_builtin.go b/terraform/eval_context_builtin.go
index 193421b78..1b6ee5a62 100644
--- a/terraform/eval_context_builtin.go
+++ b/terraform/eval_context_builtin.go
@@ -262,13 +262,8 @@ func (ctx *BuiltinEvalContext) InterpolateProvider(
 	var cfg *config.RawConfig
 
 	if pc != nil && pc.RawConfig != nil {
-		path := pc.Path
-		if len(path) == 0 {
-			path = ctx.Path()
-		}
-
 		scope := &InterpolationScope{
-			Path:     path,
+			Path:     ctx.Path(),
 			Resource: r,
 		}
 
diff --git a/terraform/graph_walk_context.go b/terraform/graph_walk_context.go
index c2cca1499..89f376e54 100644
--- a/terraform/graph_walk_context.go
+++ b/terraform/graph_walk_context.go
@@ -66,13 +66,12 @@ func (w *ContextGraphWalker) EnterPath(path []string) EvalContext {
 	w.interpolaterVarLock.Unlock()
 
 	ctx := &BuiltinEvalContext{
-		StopContext:   w.StopContext,
-		PathValue:     path,
-		Hooks:         w.Context.hooks,
-		InputValue:    w.Context.uiInput,
-		Components:    w.Context.components,
-		ProviderCache: w.providerCache,
-		//ProviderConfigCache: w.providerConfigCache,
+		StopContext:         w.StopContext,
+		PathValue:           path,
+		Hooks:               w.Context.hooks,
+		InputValue:          w.Context.uiInput,
+		Components:          w.Context.components,
+		ProviderCache:       w.providerCache,
 		ProviderInputConfig: w.Context.providerInputConfig,
 		ProviderLock:        &w.providerLock,
 		ProvisionerCache:    w.provisionerCache,
@@ -150,7 +149,6 @@ func (w *ContextGraphWalker) ExitEvalTree(
 func (w *ContextGraphWalker) init() {
 	w.contexts = make(map[string]*BuiltinEvalContext, 5)
 	w.providerCache = make(map[string]ResourceProvider, 5)
-	//w.providerConfigCache = make(map[string]*ResourceConfig, 5)
 	w.provisionerCache = make(map[string]ResourceProvisioner, 5)
 	w.interpolaterVars = make(map[string]map[string]interface{}, 5)
 }
diff --git a/terraform/node_data_refresh.go b/terraform/node_data_refresh.go
index 15d9b8f9c..d5ca641a6 100644
--- a/terraform/node_data_refresh.go
+++ b/terraform/node_data_refresh.go
@@ -108,7 +108,9 @@ func (n *NodeRefreshableDataResourceInstance) EvalTree() EvalNode {
 	// Get the state if we have it, if not we build it
 	rs := n.ResourceState
 	if rs == nil {
-		rs = &ResourceState{}
+		rs = &ResourceState{
+			Provider: n.ResolvedProvider,
+		}
 	}
 
 	// If the config isn't empty we update the state
@@ -146,7 +148,7 @@ func (n *NodeRefreshableDataResourceInstance) EvalTree() EvalNode {
 			&EvalWriteState{
 				Name:         stateId,
 				ResourceType: rs.Type,
-				Provider:     rs.Provider,
+				Provider:     n.ResolvedProvider,
 				Dependencies: rs.Dependencies,
 				State:        &state, // state is nil here
 			},
@@ -208,7 +210,7 @@ func (n *NodeRefreshableDataResourceInstance) EvalTree() EvalNode {
 			&EvalWriteState{
 				Name:         stateId,
 				ResourceType: rs.Type,
-				Provider:     rs.Provider,
+				Provider:     n.ResolvedProvider,
 				Dependencies: rs.Dependencies,
 				State:        &state,
 			},
diff --git a/terraform/node_provider_abstract.go b/terraform/node_provider_abstract.go
index 3230558e8..9e490f7b4 100644
--- a/terraform/node_provider_abstract.go
+++ b/terraform/node_provider_abstract.go
@@ -2,6 +2,7 @@ package terraform
 
 import (
 	"fmt"
+	"strings"
 
 	"github.com/hashicorp/terraform/config"
 	"github.com/hashicorp/terraform/dag"
@@ -25,8 +26,13 @@ type NodeAbstractProvider struct {
 }
 
 func ResolveProviderName(name string, path []string) string {
+	if strings.Contains(name, "provider.") {
+		// already resolved
+		return name
+	}
+
 	name = fmt.Sprintf("provider.%s", name)
-	if len(path) > 1 {
+	if len(path) >= 1 {
 		name = fmt.Sprintf("%s.%s", modulePrefixStr(path), name)
 	}
 
diff --git a/terraform/node_resource_apply.go b/terraform/node_resource_apply.go
index 807b1f416..9f6d69fd3 100644
--- a/terraform/node_resource_apply.go
+++ b/terraform/node_resource_apply.go
@@ -158,7 +158,7 @@ func (n *NodeApplyableResource) evalTreeDataResource(
 			&EvalWriteState{
 				Name:         stateId,
 				ResourceType: n.Config.Type,
-				Provider:     n.Config.Provider,
+				Provider:     n.ResolvedProvider,
 				Dependencies: stateDeps,
 				State:        &state,
 			},
@@ -308,7 +308,7 @@ func (n *NodeApplyableResource) evalTreeManagedResource(
 			&EvalWriteState{
 				Name:         stateId,
 				ResourceType: n.Config.Type,
-				Provider:     n.Config.Provider,
+				Provider:     n.ResolvedProvider,
 				Dependencies: stateDeps,
 				State:        &state,
 			},
@@ -332,7 +332,7 @@ func (n *NodeApplyableResource) evalTreeManagedResource(
 				Else: &EvalWriteState{
 					Name:         stateId,
 					ResourceType: n.Config.Type,
-					Provider:     n.Config.Provider,
+					Provider:     n.ResolvedProvider,
 					Dependencies: stateDeps,
 					State:        &state,
 				},
diff --git a/terraform/node_resource_destroy.go b/terraform/node_resource_destroy.go
index cffb9ae60..657bbee7f 100644
--- a/terraform/node_resource_destroy.go
+++ b/terraform/node_resource_destroy.go
@@ -149,7 +149,9 @@ func (n *NodeDestroyResource) EvalTree() EvalNode {
 	// Get our state
 	rs := n.ResourceState
 	if rs == nil {
-		rs = &ResourceState{}
+		rs = &ResourceState{
+			Provider: n.ResolvedProvider,
+		}
 	}
 
 	var diffApply *InstanceDiff
@@ -273,7 +275,7 @@ func (n *NodeDestroyResource) EvalTree() EvalNode {
 				&EvalWriteState{
 					Name:         stateId,
 					ResourceType: n.Addr.Type,
-					Provider:     rs.Provider,
+					Provider:     n.ResolvedProvider,
 					Dependencies: rs.Dependencies,
 					State:        &state,
 				},
diff --git a/terraform/node_resource_plan_instance.go b/terraform/node_resource_plan_instance.go
index 25a76a99f..7d9fcddb5 100644
--- a/terraform/node_resource_plan_instance.go
+++ b/terraform/node_resource_plan_instance.go
@@ -112,7 +112,7 @@ func (n *NodePlannableResourceInstance) evalTreeDataResource(
 			&EvalWriteState{
 				Name:         stateId,
 				ResourceType: n.Config.Type,
-				Provider:     n.Config.Provider,
+				Provider:     n.ResolvedProvider,
 				Dependencies: stateDeps,
 				State:        &state,
 			},
@@ -177,7 +177,7 @@ func (n *NodePlannableResourceInstance) evalTreeManagedResource(
 			&EvalWriteState{
 				Name:         stateId,
 				ResourceType: n.Config.Type,
-				Provider:     n.Config.Provider,
+				Provider:     n.ResolvedProvider,
 				Dependencies: stateDeps,
 				State:        &state,
 			},
diff --git a/terraform/node_resource_refresh.go b/terraform/node_resource_refresh.go
index d504e7de4..dbb64edae 100644
--- a/terraform/node_resource_refresh.go
+++ b/terraform/node_resource_refresh.go
@@ -166,7 +166,7 @@ func (n *NodeRefreshableManagedResourceInstance) evalTreeManagedResource() EvalN
 			&EvalWriteState{
 				Name:         stateId,
 				ResourceType: n.ResourceState.Type,
-				Provider:     n.ResourceState.Provider,
+				Provider:     n.ResolvedProvider,
 				Dependencies: n.ResourceState.Dependencies,
 				State:        &state,
 			},
@@ -251,7 +251,7 @@ func (n *NodeRefreshableManagedResourceInstance) evalTreeManagedResourceNoState(
 			&EvalWriteState{
 				Name:         stateID,
 				ResourceType: n.Config.Type,
-				Provider:     n.Config.Provider,
+				Provider:     n.ResolvedProvider,
 				Dependencies: stateDeps,
 				State:        &state,
 			},
diff --git a/terraform/terraform_test.go b/terraform/terraform_test.go
index 15e920796..0a84e34e6 100644
--- a/terraform/terraform_test.go
+++ b/terraform/terraform_test.go
@@ -220,11 +220,13 @@ func (h *HookRecordApplyOrder) PreApply(
 const testTerraformInputProviderStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   bar = override
   foo = us-east-1
   type = aws_instance
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   bar = baz
   num = 2
   type = aws_instance
@@ -233,6 +235,7 @@ aws_instance.foo:
 const testTerraformInputProviderOnlyStr = `
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   foo = us-west-2
   type = aws_instance
 `
@@ -240,6 +243,7 @@ aws_instance.foo:
 const testTerraformInputVarOnlyStr = `
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   foo = us-east-1
   type = aws_instance
 `
@@ -247,6 +251,7 @@ aws_instance.foo:
 const testTerraformInputVarOnlyUnsetStr = `
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   bar = baz
   foo = foovalue
   type = aws_instance
@@ -255,11 +260,13 @@ aws_instance.foo:
 const testTerraformInputVarsStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   bar = override
   foo = us-east-1
   type = aws_instance
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   bar = baz
   num = 2
   type = aws_instance
@@ -268,10 +275,12 @@ aws_instance.foo:
 const testTerraformApplyStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   num = 2
   type = aws_instance
 `
@@ -279,11 +288,13 @@ aws_instance.foo:
 const testTerraformApplyDataBasicStr = `
 data.null_data_source.testing:
   ID = yo
+  provider = provider.null
 `
 
 const testTerraformApplyRefCountStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   foo = 3
   type = aws_instance
 
@@ -291,20 +302,24 @@ aws_instance.bar:
     aws_instance.foo
 aws_instance.foo.0:
   ID = foo
+  provider = provider.aws
 aws_instance.foo.1:
   ID = foo
+  provider = provider.aws
 aws_instance.foo.2:
   ID = foo
+  provider = provider.aws
 `
 
 const testTerraformApplyProviderAliasStr = `
 aws_instance.bar:
   ID = foo
-  provider = aws.bar
+  provider = provider.aws.bar
   foo = bar
   type = aws_instance
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   num = 2
   type = aws_instance
 `
@@ -312,9 +327,10 @@ aws_instance.foo:
 const testTerraformApplyProviderAliasConfigStr = `
 another_instance.bar:
   ID = foo
-  provider = another.two
+  provider = provider.another.two
 another_instance.foo:
   ID = foo
+  provider = provider.another
 `
 
 const testTerraformApplyEmptyModuleStr = `
@@ -335,6 +351,7 @@ aws_secret_key = ZZZZ
 const testTerraformApplyDependsCreateBeforeStr = `
 aws_instance.lb:
   ID = foo
+  provider = provider.aws
   instance = foo
   type = aws_instance
 
@@ -342,6 +359,7 @@ aws_instance.lb:
     aws_instance.web
 aws_instance.web:
   ID = foo
+  provider = provider.aws
   require_new = ami-new
   type = aws_instance
 `
@@ -349,6 +367,7 @@ aws_instance.web:
 const testTerraformApplyCreateBeforeStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   require_new = xyz
   type = aws_instance
 `
@@ -356,6 +375,7 @@ aws_instance.bar:
 const testTerraformApplyCreateBeforeUpdateStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   foo = baz
   type = aws_instance
 `
@@ -363,12 +383,14 @@ aws_instance.bar:
 const testTerraformApplyCancelStr = `
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   num = 2
 `
 
 const testTerraformApplyComputeStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   foo = computed_dynamical
   type = aws_instance
 
@@ -376,6 +398,7 @@ aws_instance.bar:
     aws_instance.foo
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   dynamical = computed_dynamical
   num = 2
   type = aws_instance
@@ -429,10 +452,12 @@ const testTerraformApplyCountTaintedStr = `
 const testTerraformApplyCountVariableStr = `
 aws_instance.foo.0:
   ID = foo
+  provider = provider.aws
   foo = foo
   type = aws_instance
 aws_instance.foo.1:
   ID = foo
+  provider = provider.aws
   foo = foo
   type = aws_instance
 `
@@ -440,6 +465,7 @@ aws_instance.foo.1:
 const testTerraformApplyCountVariableRefStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   foo = 2
   type = aws_instance
 
@@ -447,30 +473,37 @@ aws_instance.bar:
     aws_instance.foo
 aws_instance.foo.0:
   ID = foo
+  provider = provider.aws
 aws_instance.foo.1:
   ID = foo
+  provider = provider.aws
 `
 
 const testTerraformApplyMinimalStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
 `
 
 const testTerraformApplyModuleStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   num = 2
   type = aws_instance
 
 module.child:
   aws_instance.baz:
     ID = foo
+    provider = provider.aws
     foo = bar
     type = aws_instance
 `
@@ -478,6 +511,7 @@ module.child:
 const testTerraformApplyModuleBoolStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   foo = 1
   type = aws_instance
 
@@ -500,10 +534,12 @@ module.child:
 const testTerraformApplyMultiProviderStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 do_instance.foo:
   ID = foo
+  provider = provider.do
   num = 2
   type = do_instance
 `
@@ -513,8 +549,10 @@ const testTerraformApplyModuleOnlyProviderStr = `
 module.child:
   aws_instance.foo:
     ID = foo
+    provider = provider.aws
   test_instance.foo:
     ID = foo
+    provider = provider.test
 `
 
 const testTerraformApplyModuleProviderAliasStr = `
@@ -522,7 +560,7 @@ const testTerraformApplyModuleProviderAliasStr = `
 module.child:
   aws_instance.foo:
     ID = foo
-    provider = aws.eu
+    provider = module.child.provider.aws.eu
 `
 
 const testTerraformApplyModuleVarRefExistingStr = `
@@ -533,6 +571,7 @@ aws_instance.foo:
 module.child:
   aws_instance.foo:
     ID = foo
+    provider = provider.aws
     type = aws_instance
     value = bar
 `
@@ -555,11 +594,13 @@ module.child:
 const testTerraformApplyProvisionerStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
 
   Dependencies:
     aws_instance.foo
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   dynamical = computed_dynamical
   num = 2
   type = aws_instance
@@ -570,13 +611,16 @@ const testTerraformApplyProvisionerModuleStr = `
 module.child:
   aws_instance.bar:
     ID = foo
+    provider = provider.aws
 `
 
 const testTerraformApplyProvisionerFailStr = `
 aws_instance.bar: (tainted)
   ID = foo
+  provider = provider.aws
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   num = 2
   type = aws_instance
 `
@@ -584,6 +628,7 @@ aws_instance.foo:
 const testTerraformApplyProvisionerFailCreateStr = `
 aws_instance.bar: (tainted)
   ID = foo
+  provider = provider.aws
 `
 
 const testTerraformApplyProvisionerFailCreateNoIdStr = `
@@ -593,6 +638,7 @@ const testTerraformApplyProvisionerFailCreateNoIdStr = `
 const testTerraformApplyProvisionerFailCreateBeforeDestroyStr = `
 aws_instance.bar: (1 deposed)
   ID = bar
+  provider = provider.aws
   require_new = abc
   Deposed ID 1 = foo (tainted)
 `
@@ -600,6 +646,7 @@ aws_instance.bar: (1 deposed)
 const testTerraformApplyProvisionerResourceRefStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   num = 2
   type = aws_instance
 `
@@ -607,6 +654,7 @@ aws_instance.bar:
 const testTerraformApplyProvisionerSelfRefStr = `
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 `
@@ -614,14 +662,17 @@ aws_instance.foo:
 const testTerraformApplyProvisionerMultiSelfRefStr = `
 aws_instance.foo.0:
   ID = foo
+  provider = provider.aws
   foo = number 0
   type = aws_instance
 aws_instance.foo.1:
   ID = foo
+  provider = provider.aws
   foo = number 1
   type = aws_instance
 aws_instance.foo.2:
   ID = foo
+  provider = provider.aws
   foo = number 2
   type = aws_instance
 `
@@ -629,10 +680,12 @@ aws_instance.foo.2:
 const testTerraformApplyProvisionerMultiSelfRefSingleStr = `
 aws_instance.foo.0:
   ID = foo
+  provider = provider.aws
   foo = number 0
   type = aws_instance
 aws_instance.foo.1:
   ID = foo
+  provider = provider.aws
   foo = number 1
   type = aws_instance
 
@@ -640,6 +693,7 @@ aws_instance.foo.1:
     aws_instance.foo.0
 aws_instance.foo.2:
   ID = foo
+  provider = provider.aws
   foo = number 2
   type = aws_instance
 
@@ -650,6 +704,7 @@ aws_instance.foo.2:
 const testTerraformApplyProvisionerDiffStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 `
@@ -666,40 +721,47 @@ module.child.subchild:
 const testTerraformApplyErrorStr = `
 aws_instance.bar:
   ID = bar
+  provider = provider.aws
 
   Dependencies:
     aws_instance.foo
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   num = 2
 `
 
 const testTerraformApplyErrorCreateBeforeDestroyStr = `
 aws_instance.bar:
   ID = bar
+  provider = provider.aws
   require_new = abc
 `
 
 const testTerraformApplyErrorDestroyCreateBeforeDestroyStr = `
 aws_instance.bar: (1 deposed)
   ID = foo
+  provider = provider.aws
   Deposed ID 1 = bar
 `
 
 const testTerraformApplyErrorPartialStr = `
 aws_instance.bar:
   ID = bar
+  provider = provider.aws
 
   Dependencies:
     aws_instance.foo
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   num = 2
 `
 
 const testTerraformApplyResourceDependsOnModuleStr = `
 aws_instance.a:
   ID = foo
+  provider = provider.aws
 
   Dependencies:
     module.child
@@ -707,11 +769,13 @@ aws_instance.a:
 module.child:
   aws_instance.child:
     ID = foo
+    provider = provider.aws
 `
 
 const testTerraformApplyResourceDependsOnModuleDeepStr = `
 aws_instance.a:
   ID = foo
+  provider = provider.aws
 
   Dependencies:
     module.child
@@ -719,6 +783,7 @@ aws_instance.a:
 module.child.grandchild:
   aws_instance.c:
     ID = foo
+    provider = provider.aws
 `
 
 const testTerraformApplyResourceDependsOnModuleInModuleStr = `
@@ -726,17 +791,20 @@ const testTerraformApplyResourceDependsOnModuleInModuleStr = `
 module.child:
   aws_instance.b:
     ID = foo
+    provider = provider.aws
 
     Dependencies:
       module.grandchild
 module.child.grandchild:
   aws_instance.c:
     ID = foo
+    provider = provider.aws
 `
 
 const testTerraformApplyTaintStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   num = 2
   type = aws_instance
 `
@@ -744,6 +812,7 @@ aws_instance.bar:
 const testTerraformApplyTaintDepStr = `
 aws_instance.bar:
   ID = bar
+  provider = provider.aws
   foo = foo
   num = 2
   type = aws_instance
@@ -752,6 +821,7 @@ aws_instance.bar:
     aws_instance.foo
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   num = 2
   type = aws_instance
 `
@@ -759,6 +829,7 @@ aws_instance.foo:
 const testTerraformApplyTaintDepRequireNewStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   foo = foo
   require_new = yes
   type = aws_instance
@@ -767,6 +838,7 @@ aws_instance.bar:
     aws_instance.foo
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   num = 2
   type = aws_instance
 `
@@ -774,10 +846,12 @@ aws_instance.foo:
 const testTerraformApplyOutputStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   num = 2
   type = aws_instance
 
@@ -789,10 +863,12 @@ foo_num = 2
 const testTerraformApplyOutputAddStr = `
 aws_instance.test.0:
   ID = foo
+  provider = provider.aws
   foo = foo0
   type = aws_instance
 aws_instance.test.1:
   ID = foo
+  provider = provider.aws
   foo = foo1
   type = aws_instance
 
@@ -805,18 +881,22 @@ secondOutput = foo1
 const testTerraformApplyOutputListStr = `
 aws_instance.bar.0:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 aws_instance.bar.1:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 aws_instance.bar.2:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   num = 2
   type = aws_instance
 
@@ -828,18 +908,22 @@ foo_num = [bar,bar,bar]
 const testTerraformApplyOutputMultiStr = `
 aws_instance.bar.0:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 aws_instance.bar.1:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 aws_instance.bar.2:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   num = 2
   type = aws_instance
 
@@ -851,18 +935,22 @@ foo_num = bar,bar,bar
 const testTerraformApplyOutputMultiIndexStr = `
 aws_instance.bar.0:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 aws_instance.bar.1:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 aws_instance.bar.2:
   ID = foo
+  provider = provider.aws
   foo = bar
   type = aws_instance
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   num = 2
   type = aws_instance
 
@@ -874,6 +962,7 @@ foo_num = bar
 const testTerraformApplyUnknownAttrStr = `
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   num = 2
   type = aws_instance
 `
@@ -881,12 +970,14 @@ aws_instance.foo:
 const testTerraformApplyVarsStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   bar = foo
   baz = override
   foo = us-west-2
   type = aws_instance
 aws_instance.foo:
   ID = foo
+  provider = provider.aws
   bar = baz
   list = Hello,World
   map = Baz,Foo,Hello
@@ -897,6 +988,7 @@ aws_instance.foo:
 const testTerraformApplyVarsEnvStr = `
 aws_instance.bar:
   ID = foo
+  provider = provider.aws
   bar = Hello,World
   baz = Baz,Foo,Hello
   foo = baz
@@ -1650,6 +1742,7 @@ STATE:
 const testTerraformInputHCL = `
 hcl_instance.hcltest:
   ID = foo
+  provider = provider.hcl
   bar.w = z
   bar.x = y
   foo.# = 2
@@ -1661,6 +1754,7 @@ hcl_instance.hcltest:
 const testTerraformRefreshDataRefDataStr = `
 data.null_data_source.bar:
   ID = foo
+  provider = provider.null
   bar = yes
   type = null_data_source
 
@@ -1668,6 +1762,7 @@ data.null_data_source.bar:
     data.null_data_source.foo
 data.null_data_source.foo:
   ID = foo
+  provider = provider.null
   foo = yes
   type = null_data_source
 `
diff --git a/terraform/test-fixtures/destroy-module-with-provider/main.tf b/terraform/test-fixtures/destroy-module-with-provider/main.tf
new file mode 100644
index 000000000..5c7c70331
--- /dev/null
+++ b/terraform/test-fixtures/destroy-module-with-provider/main.tf
@@ -0,0 +1,11 @@
+// this is the provider that should actually be used by orphaned resources
+provider "aws" {
+  alias = "bar"
+}
+
+module "mod" {
+  source = "./mod"
+  providers = {
+    "aws.foo" = "aws.bar"
+  }
+}
diff --git a/terraform/test-fixtures/destroy-module-with-provider/mod/main.tf b/terraform/test-fixtures/destroy-module-with-provider/mod/main.tf
new file mode 100644
index 000000000..3e360ee46
--- /dev/null
+++ b/terraform/test-fixtures/destroy-module-with-provider/mod/main.tf
@@ -0,0 +1,6 @@
+provider "aws" {
+  alias = "foo"
+}
+
+// removed module configuration referencing aws.foo, which was passed in by the
+// root module
diff --git a/terraform/test-fixtures/transform-provider-grandchild-inherit/child/grandchild/main.tf b/terraform/test-fixtures/transform-provider-grandchild-inherit/child/grandchild/main.tf
new file mode 100644
index 000000000..58363ef0c
--- /dev/null
+++ b/terraform/test-fixtures/transform-provider-grandchild-inherit/child/grandchild/main.tf
@@ -0,0 +1,7 @@
+provider "aws" {
+  alias = "baz"
+}
+
+resource "aws_instance" "baz" {
+  provider = "aws.baz"
+}
diff --git a/terraform/test-fixtures/transform-provider-grandchild-inherit/child/main.tf b/terraform/test-fixtures/transform-provider-grandchild-inherit/child/main.tf
new file mode 100644
index 000000000..6c1285513
--- /dev/null
+++ b/terraform/test-fixtures/transform-provider-grandchild-inherit/child/main.tf
@@ -0,0 +1,10 @@
+provider "aws" {
+  alias = "bar"
+}
+
+module "grandchild" {
+  source = "./grandchild"
+  providers = {
+    "aws.baz" = "aws.bar"
+  }
+}
diff --git a/terraform/test-fixtures/transform-provider-grandchild-inherit/main.tf b/terraform/test-fixtures/transform-provider-grandchild-inherit/main.tf
new file mode 100644
index 000000000..b9d39e9c7
--- /dev/null
+++ b/terraform/test-fixtures/transform-provider-grandchild-inherit/main.tf
@@ -0,0 +1,11 @@
+provider "aws" {
+  alias = "foo"
+  value = "config"
+}
+
+module "child" {
+  source = "child"
+  providers = {
+    "aws.bar" = "aws.foo"
+  }
+}
diff --git a/terraform/test-fixtures/transform-provider-inherit/child/main.tf b/terraform/test-fixtures/transform-provider-inherit/child/main.tf
new file mode 100644
index 000000000..fc598d7fc
--- /dev/null
+++ b/terraform/test-fixtures/transform-provider-inherit/child/main.tf
@@ -0,0 +1,7 @@
+provider "aws" {
+    alias = "bar"
+}
+
+resource "aws_instance" "thing" {
+    provider = "aws.bar"
+}
diff --git a/terraform/test-fixtures/transform-provider-inherit/main.tf b/terraform/test-fixtures/transform-provider-inherit/main.tf
new file mode 100644
index 000000000..b9d39e9c7
--- /dev/null
+++ b/terraform/test-fixtures/transform-provider-inherit/main.tf
@@ -0,0 +1,11 @@
+provider "aws" {
+  alias = "foo"
+  value = "config"
+}
+
+module "child" {
+  source = "child"
+  providers = {
+    "aws.bar" = "aws.foo"
+  }
+}
diff --git a/terraform/test-fixtures/update-resource-provider/main.tf b/terraform/test-fixtures/update-resource-provider/main.tf
new file mode 100644
index 000000000..6c082d540
--- /dev/null
+++ b/terraform/test-fixtures/update-resource-provider/main.tf
@@ -0,0 +1,7 @@
+provider "aws" {
+  alias = "foo"
+}
+
+resource "aws_instance" "bar" {
+  provider = "aws.foo"
+}
diff --git a/terraform/transform_attach_config_provider.go b/terraform/transform_attach_config_provider.go
index 10506ea06..39cf097ae 100644
--- a/terraform/transform_attach_config_provider.go
+++ b/terraform/transform_attach_config_provider.go
@@ -1,10 +1,7 @@
 package terraform
 
 import (
-	"log"
-
 	"github.com/hashicorp/terraform/config"
-	"github.com/hashicorp/terraform/config/module"
 )
 
 // GraphNodeAttachProvider is an interface that must be implemented by nodes
@@ -19,62 +16,3 @@ type GraphNodeAttachProvider interface {
 	// Sets the configuration
 	AttachProvider(*config.ProviderConfig)
 }
-
-// AttachProviderConfigTransformer goes through the graph and attaches
-// provider configuration structures to nodes that implement the interfaces
-// above.
-//
-// The attached configuration structures are directly from the configuration.
-// If they're going to be modified, a copy should be made.
-type AttachProviderConfigTransformer struct {
-	Module *module.Tree // Module is the root module for the config
-}
-
-func (t *AttachProviderConfigTransformer) Transform(g *Graph) error {
-	if err := t.attachProviders(g); err != nil {
-		return err
-	}
-
-	return nil
-}
-
-func (t *AttachProviderConfigTransformer) attachProviders(g *Graph) error {
-	// Go through and find GraphNodeAttachProvider
-	for _, v := range g.Vertices() {
-		// Only care about GraphNodeAttachProvider implementations
-		apn, ok := v.(GraphNodeAttachProvider)
-		if !ok {
-			continue
-		}
-
-		// Determine what we're looking for
-		path := normalizeModulePath(apn.Path())
-		path = path[1:]
-		name := apn.ProviderName()
-		log.Printf("[TRACE] Attach provider request: %#v %s", path, name)
-
-		// Get the configuration.
-		tree := t.Module.Child(path)
-		if tree == nil {
-			continue
-		}
-
-		// Go through the provider configs to find the matching config
-		for _, p := range tree.Config().ProviderConfigs {
-			// Build the name, which is "name.alias" if an alias exists
-			current := p.Name
-			if p.Alias != "" {
-				current += "." + p.Alias
-			}
-
-			// If the configs match then attach!
-			if current == name {
-				log.Printf("[TRACE] Attaching provider config: %#v", p)
-				apn.AttachProvider(p)
-				break
-			}
-		}
-	}
-
-	return nil
-}
diff --git a/terraform/transform_config.go b/terraform/transform_config.go
index 7ec7744a7..61bce8532 100644
--- a/terraform/transform_config.go
+++ b/terraform/transform_config.go
@@ -133,78 +133,3 @@ func (t *ConfigTransformer) transformSingle(g *Graph, m *module.Tree) error {
 
 	return nil
 }
-
-type ProviderConfigTransformer struct {
-	Providers []string
-	Concrete  ConcreteProviderNodeFunc
-
-	// Module is the module to add resources from.
-	Module *module.Tree
-}
-
-func (t *ProviderConfigTransformer) Transform(g *Graph) error {
-	// If no module is given, we don't do anything
-	if t.Module == nil {
-		return nil
-	}
-
-	// If the module isn't loaded, that is simply an error
-	if !t.Module.Loaded() {
-		return errors.New("module must be loaded for ProviderConfigTransformer")
-	}
-
-	// Start the transformation process
-	return t.transform(g, t.Module)
-}
-
-func (t *ProviderConfigTransformer) transform(g *Graph, m *module.Tree) error {
-	// If no config, do nothing
-	if m == nil {
-		return nil
-	}
-
-	// Add our resources
-	if err := t.transformSingle(g, m); err != nil {
-		return err
-	}
-
-	// Transform all the children.
-	for _, c := range m.Children() {
-		if err := t.transform(g, c); err != nil {
-			return err
-		}
-	}
-
-	return nil
-}
-
-func (t *ProviderConfigTransformer) transformSingle(g *Graph, m *module.Tree) error {
-	log.Printf("[TRACE] ProviderConfigTransformer: Starting for path: %v", m.Path())
-
-	// Get the configuration for this module
-	conf := m.Config()
-
-	// Build the path we're at
-	path := m.Path()
-	if len(path) > 0 {
-		path = append([]string{RootModuleName}, path...)
-	}
-
-	// Write all the resources out
-	for _, p := range conf.ProviderConfigs {
-		name := p.Name
-		if p.Alias != "" {
-			name += "." + p.Alias
-		}
-
-		v := t.Concrete(&NodeAbstractProvider{
-			NameValue: name,
-			PathValue: path,
-		}).(dag.Vertex)
-
-		// Add it to the graph
-		g.Add(v)
-	}
-
-	return nil
-}
diff --git a/terraform/transform_deposed.go b/terraform/transform_deposed.go
index c3c87a299..87a1f9c98 100644
--- a/terraform/transform_deposed.go
+++ b/terraform/transform_deposed.go
@@ -108,7 +108,7 @@ func (n *graphNodeDeposedResource) EvalTree() EvalNode {
 				&EvalWriteStateDeposed{
 					Name:         n.ResourceName,
 					ResourceType: n.ResourceType,
-					Provider:     n.ProviderName,
+					Provider:     n.ResolvedProvider,
 					State:        &state,
 					Index:        n.Index,
 				},
@@ -157,7 +157,7 @@ func (n *graphNodeDeposedResource) EvalTree() EvalNode {
 				&EvalWriteStateDeposed{
 					Name:         n.ResourceName,
 					ResourceType: n.ResourceType,
-					Provider:     n.ProviderName,
+					Provider:     n.ResolvedProvider,
 					State:        &state,
 					Index:        n.Index,
 				},
diff --git a/terraform/transform_import_state.go b/terraform/transform_import_state.go
index abac3fd24..fcbff653f 100644
--- a/terraform/transform_import_state.go
+++ b/terraform/transform_import_state.go
@@ -240,7 +240,7 @@ func (n *graphNodeImportStateSub) EvalTree() EvalNode {
 			&EvalWriteState{
 				Name:         key.String(),
 				ResourceType: info.Type,
-				Provider:     resourceProvider(info.Type, n.ProviderName),
+				Provider:     n.ResolvedProvider,
 				State:        &state,
 			},
 		},
diff --git a/terraform/transform_provider.go b/terraform/transform_provider.go
index 38821bae3..6d7ab28e9 100644
--- a/terraform/transform_provider.go
+++ b/terraform/transform_provider.go
@@ -1,11 +1,13 @@
 package terraform
 
 import (
+	"errors"
 	"fmt"
 	"log"
 	"strings"
 
 	"github.com/hashicorp/go-multierror"
+	"github.com/hashicorp/terraform/config"
 	"github.com/hashicorp/terraform/config/module"
 	"github.com/hashicorp/terraform/dag"
 )
@@ -18,10 +20,6 @@ func TransformProviders(providers []string, concrete ConcreteProviderNodeFunc, m
 			Providers: providers,
 			Concrete:  concrete,
 		},
-		// Attach configuration to each provider instance
-		&AttachProviderConfigTransformer{
-			Module: mod,
-		},
 		// Add any remaining missing providers
 		&MissingProviderTransformer{
 			Providers: providers,
@@ -29,8 +27,8 @@ func TransformProviders(providers []string, concrete ConcreteProviderNodeFunc, m
 		},
 		// Connect the providers
 		&ProviderTransformer{},
-		// Disable unused providers
-		&DisableProviderTransformer{},
+		// Remove unused providers and proxies
+		&PruneProviderTransformer{},
 		// Connect provider to their parent provider nodes
 		&ParentProviderTransformer{},
 	)
@@ -54,7 +52,8 @@ type GraphNodeCloseProvider interface {
 
 // GraphNodeProviderConsumer is an interface that nodes that require
 // a provider must implement. ProvidedBy must return the name of the provider
-// to use.
+// to use. This may be a provider by type, type.alias or a fully resolved
+// provider name
 type GraphNodeProviderConsumer interface {
 	ProvidedBy() string
 	// Set the resolved provider address for this resource.
@@ -107,6 +106,13 @@ func (t *ProviderTransformer) Transform(g *Graph) error {
 				break
 			}
 
+			// see if this in  an inherited provider
+			if p, ok := target.(*graphNodeProxyProvider); ok {
+				g.Remove(p)
+				target = p.Target()
+				key = target.(GraphNodeProvider).Name()
+			}
+
 			log.Printf("[DEBUG] resource %s using provider %s", dag.VertexName(pv), key)
 			pv.SetProvider(key)
 			g.Connect(dag.BasicEdge(v, target))
@@ -122,7 +128,6 @@ func (t *ProviderTransformer) Transform(g *Graph) error {
 // in the graph are evaluated.
 type CloseProviderTransformer struct{}
 
-// FIXME: this doesn't close providers if the root provider is disabled
 func (t *CloseProviderTransformer) Transform(g *Graph) error {
 	pm := providerVertexMap(g)
 	cpm := make(map[string]*graphNodeCloseProvider)
@@ -248,22 +253,29 @@ func (t *ParentProviderTransformer) Transform(g *Graph) error {
 	return nil
 }
 
-// PruneProviderTransformer is a GraphTransformer that prunes all the
-// providers that aren't needed from the graph. A provider is unneeded if
-// no resource or module is using that provider.
+// PruneProviderTransformer removes any providers that are not actually used by
+// anything, and provider proxies. This avoids the provider being initialized
+// and configured.  This both saves resources but also avoids errors since
+// configuration may imply initialization which may require auth.
 type PruneProviderTransformer struct{}
 
 func (t *PruneProviderTransformer) Transform(g *Graph) error {
 	for _, v := range g.Vertices() {
-		// We only care about the providers
-		if pn, ok := v.(GraphNodeProvider); !ok || pn.ProviderName() == "" {
+		// We only care about providers
+		pn, ok := v.(GraphNodeProvider)
+		if !ok || pn.ProviderName() == "" {
 			continue
 		}
-		// Does anything depend on this? If not, then prune it.
-		if s := g.UpEdges(v); s.Len() == 0 {
-			if nv, ok := v.(dag.NamedVertex); ok {
-				log.Printf("[DEBUG] Pruning provider with no dependencies: %s", nv.Name())
-			}
+
+		// ProxyProviders will have up edges, but we're now done with them in the graph
+		if _, ok := v.(*graphNodeProxyProvider); ok {
+			log.Printf("[DEBUG] pruning proxy provider %s", dag.VertexName(v))
+			g.Remove(v)
+		}
+
+		// Remove providers with no dependencies.
+		if g.UpEdges(v).Len() == 0 {
+			log.Printf("[DEBUG] pruning unused provider %s", dag.VertexName(v))
 			g.Remove(v)
 		}
 	}
@@ -274,6 +286,11 @@ func (t *PruneProviderTransformer) Transform(g *Graph) error {
 // providerMapKey is a helper that gives us the key to use for the
 // maps returned by things such as providerVertexMap.
 func providerMapKey(k string, v dag.Vertex) string {
+	if strings.Contains(k, "provider.") {
+		// this is already resolved
+		return k
+	}
+
 	// we create a dummy provider to
 	var path []string
 	if sp, ok := v.(GraphNodeSubPath); ok {
@@ -349,21 +366,219 @@ func (n *graphNodeCloseProvider) RemoveIfNotTargeted() bool {
 	return true
 }
 
-// graphNodeProviderConsumerDummy is a struct that never enters the real
-// graph (though it could to no ill effect). It implements
-// GraphNodeProviderConsumer and GraphNodeSubpath as a way to force
-// certain transformations.
-type graphNodeProviderConsumerDummy struct {
-	ProviderValue string
-	PathValue     []string
+// graphNodeProxyProvider is a GraphNodeProvider implementation that is used to
+// store the name and value of a provider node for inheritance between modules.
+// These nodes are only used to store the data while loading the provider
+// configurations, and are removed after all the resources have been connected
+// to their providers.
+type graphNodeProxyProvider struct {
+	nameValue string
+	path      []string
+	target    GraphNodeProvider
 }
 
-func (n *graphNodeProviderConsumerDummy) Path() []string {
-	return n.PathValue
+func (n *graphNodeProxyProvider) ProviderName() string {
+	return n.Target().ProviderName()
 }
 
-func (n *graphNodeProviderConsumerDummy) ProvidedBy() string {
-	return n.ProviderValue
+func (n *graphNodeProxyProvider) Name() string {
+	return ResolveProviderName(n.nameValue, n.path)
 }
 
-func (n *graphNodeProviderConsumerDummy) SetProvider(string) {}
+// find the concrete provider instance
+func (n *graphNodeProxyProvider) Target() GraphNodeProvider {
+	switch t := n.target.(type) {
+	case *graphNodeProxyProvider:
+		return t.Target()
+	default:
+		return n.target
+	}
+}
+
+// ProviderConfigTransformer adds all provider nodes from the configuration and
+// attaches the configs.
+type ProviderConfigTransformer struct {
+	Providers []string
+	Concrete  ConcreteProviderNodeFunc
+
+	// each provider node is stored here so that the proxy nodes can look up
+	// their targets by name.
+	providers map[string]GraphNodeProvider
+
+	// Module is the module to add resources from.
+	Module *module.Tree
+}
+
+func (t *ProviderConfigTransformer) Transform(g *Graph) error {
+	// If no module is given, we don't do anything
+	if t.Module == nil {
+		return nil
+	}
+
+	// If the module isn't loaded, that is simply an error
+	if !t.Module.Loaded() {
+		return errors.New("module must be loaded for ProviderConfigTransformer")
+	}
+
+	t.providers = make(map[string]GraphNodeProvider)
+
+	// Start the transformation process
+	if err := t.transform(g, t.Module); err != nil {
+		return nil
+	}
+
+	// finally attach the configs to the new nodes
+	return t.attachProviderConfigs(g)
+}
+
+func (t *ProviderConfigTransformer) transform(g *Graph, m *module.Tree) error {
+	// If no config, do nothing
+	if m == nil {
+		return nil
+	}
+
+	// Add our resources
+	if err := t.transformSingle(g, m); err != nil {
+		return err
+	}
+
+	// Transform all the children.
+	for _, c := range m.Children() {
+		if err := t.transform(g, c); err != nil {
+			return err
+		}
+	}
+	return nil
+}
+
+func (t *ProviderConfigTransformer) transformSingle(g *Graph, m *module.Tree) error {
+	log.Printf("[TRACE] ProviderConfigTransformer: Starting for path: %v", m.Path())
+
+	// Get the configuration for this module
+	conf := m.Config()
+
+	// Build the path we're at
+	path := m.Path()
+	if len(path) > 0 {
+		path = append([]string{RootModuleName}, path...)
+	}
+
+	// add all provider configs
+	for _, p := range conf.ProviderConfigs {
+		name := p.Name
+		if p.Alias != "" {
+			name += "." + p.Alias
+		}
+
+		// if this is an empty config placeholder to accept a provier from a
+		// parent module, add a proxy and continue.
+		if t.addProxyProvider(g, m, p, name) {
+			continue
+		}
+
+		v := t.Concrete(&NodeAbstractProvider{
+			NameValue: name,
+			PathValue: path,
+		})
+
+		// Add it to the graph
+		g.Add(v)
+		t.providers[ResolveProviderName(name, path)] = v.(GraphNodeProvider)
+	}
+
+	return nil
+}
+
+// add a ProxyProviderConfig if this was inherited from a parent module. Return
+// whether the proxy was added to the graph or not.
+func (t *ProviderConfigTransformer) addProxyProvider(g *Graph, m *module.Tree, pc *config.ProviderConfig, name string) bool {
+	path := m.Path()
+
+	// This isn't a proxy if there's a config, or we're at the root
+	if len(pc.RawConfig.RawMap()) > 0 || len(path) == 0 {
+		return false
+	}
+
+	parentPath := path[:len(path)-1]
+	parent := t.Module.Child(parentPath)
+	if parent == nil {
+		return false
+	}
+
+	var parentCfg *config.Module
+	for _, mod := range parent.Config().Modules {
+		if mod.Name == m.Name() {
+			parentCfg = mod
+			break
+		}
+	}
+
+	if parentCfg == nil {
+		panic("immaculately conceived module " + m.Name())
+	}
+
+	parentProviderName, ok := parentCfg.Providers[name]
+	if !ok {
+		// this provider isn't listed in a parent module block, so we just have
+		// an empty config
+		return false
+	}
+
+	// the parent module is passing in a provider
+	fullParentName := ResolveProviderName(parentProviderName, parentPath)
+	parentProvider := t.providers[fullParentName]
+
+	if parentProvider == nil {
+		panic(fmt.Sprintf("missing provider %s in module %s", parentProviderName, m.Name()))
+	}
+
+	v := &graphNodeProxyProvider{
+		nameValue: name,
+		path:      path,
+		target:    parentProvider,
+	}
+
+	// Add it to the graph
+	g.Add(v)
+	t.providers[ResolveProviderName(name, path)] = v
+	return true
+}
+
+func (t *ProviderConfigTransformer) attachProviderConfigs(g *Graph) error {
+	for _, v := range g.Vertices() {
+		// Only care about GraphNodeAttachProvider implementations
+		apn, ok := v.(GraphNodeAttachProvider)
+		if !ok {
+			continue
+		}
+
+		// Determine what we're looking for
+		path := normalizeModulePath(apn.Path())[1:]
+		name := apn.ProviderName()
+		log.Printf("[TRACE] Attach provider request: %#v %s", path, name)
+
+		// Get the configuration.
+		tree := t.Module.Child(path)
+		if tree == nil {
+			continue
+		}
+
+		// Go through the provider configs to find the matching config
+		for _, p := range tree.Config().ProviderConfigs {
+			// Build the name, which is "name.alias" if an alias exists
+			current := p.Name
+			if p.Alias != "" {
+				current += "." + p.Alias
+			}
+
+			// If the configs match then attach!
+			if current == name {
+				log.Printf("[TRACE] Attaching provider config: %#v", p)
+				apn.AttachProvider(p)
+				break
+			}
+		}
+	}
+
+	return nil
+}
diff --git a/terraform/transform_provider_disable.go b/terraform/transform_provider_disable.go
deleted file mode 100644
index d9919f3a7..000000000
--- a/terraform/transform_provider_disable.go
+++ /dev/null
@@ -1,50 +0,0 @@
-package terraform
-
-import (
-	"fmt"
-
-	"github.com/hashicorp/terraform/dag"
-)
-
-// DisableProviderTransformer "disables" any providers that are not actually
-// used by anything. This avoids the provider being initialized and configured.
-// This both saves resources but also avoids errors since configuration
-// may imply initialization which may require auth.
-type DisableProviderTransformer struct{}
-
-func (t *DisableProviderTransformer) Transform(g *Graph) error {
-	for _, v := range g.Vertices() {
-		// We only care about providers
-		pn, ok := v.(GraphNodeProvider)
-		if !ok || pn.ProviderName() == "" {
-			continue
-		}
-
-		// If we have dependencies, then don't disable
-		if g.UpEdges(v).Len() > 0 {
-			continue
-		}
-
-		// Get the path
-		var path []string
-		if pn, ok := v.(GraphNodeSubPath); ok {
-			path = pn.Path()
-		}
-
-		// Disable the provider by replacing it with a "disabled" provider
-		disabled := &NodeDisabledProvider{
-			NodeAbstractProvider: &NodeAbstractProvider{
-				NameValue: pn.ProviderName(),
-				PathValue: path,
-			},
-		}
-
-		if !g.Replace(v, disabled) {
-			panic(fmt.Sprintf(
-				"vertex disappeared from under us: %s",
-				dag.VertexName(v)))
-		}
-	}
-
-	return nil
-}
diff --git a/terraform/transform_provider_test.go b/terraform/transform_provider_test.go
index 42995b8a3..f4277060a 100644
--- a/terraform/transform_provider_test.go
+++ b/terraform/transform_provider_test.go
@@ -445,6 +445,72 @@ func TestPruneProviderTransformer(t *testing.T) {
 	}
 }
 
+// the child module resource is attached to the configured parent provider
+func TestProviderConfigTransformer_parentProviders(t *testing.T) {
+	mod := testModule(t, "transform-provider-inherit")
+	concrete := func(a *NodeAbstractProvider) dag.Vertex { return a }
+
+	g := Graph{Path: RootModulePath}
+	{
+		tf := &ConfigTransformer{Module: mod}
+		if err := tf.Transform(&g); err != nil {
+			t.Fatalf("err: %s", err)
+		}
+	}
+	{
+		tf := &AttachResourceConfigTransformer{Module: mod}
+		if err := tf.Transform(&g); err != nil {
+			t.Fatalf("err: %s", err)
+		}
+	}
+
+	{
+		tf := TransformProviders([]string{"aws"}, concrete, mod)
+		if err := tf.Transform(&g); err != nil {
+			t.Fatalf("err: %s", err)
+		}
+	}
+
+	actual := strings.TrimSpace(g.String())
+	expected := strings.TrimSpace(testTransformModuleProviderConfigStr)
+	if actual != expected {
+		t.Fatalf("expected:\n%s\n\ngot:\n%s", expected, actual)
+	}
+}
+
+// the child module resource is attached to the configured grand-parent provider
+func TestProviderConfigTransformer_grandparentProviders(t *testing.T) {
+	mod := testModule(t, "transform-provider-grandchild-inherit")
+	concrete := func(a *NodeAbstractProvider) dag.Vertex { return a }
+
+	g := Graph{Path: RootModulePath}
+	{
+		tf := &ConfigTransformer{Module: mod}
+		if err := tf.Transform(&g); err != nil {
+			t.Fatalf("err: %s", err)
+		}
+	}
+	{
+		tf := &AttachResourceConfigTransformer{Module: mod}
+		if err := tf.Transform(&g); err != nil {
+			t.Fatalf("err: %s", err)
+		}
+	}
+
+	{
+		tf := TransformProviders([]string{"aws"}, concrete, mod)
+		if err := tf.Transform(&g); err != nil {
+			t.Fatalf("err: %s", err)
+		}
+	}
+
+	actual := strings.TrimSpace(g.String())
+	expected := strings.TrimSpace(testTransformModuleProviderGrandparentStr)
+	if actual != expected {
+		t.Fatalf("expected:\n%s\n\ngot:\n%s", expected, actual)
+	}
+}
+
 const testTransformProviderBasicStr = `
 aws_instance.web
   provider.aws
@@ -481,9 +547,7 @@ module.sub.module.subsub.bar_instance.two
 module.sub.module.subsub.foo_instance.one
   module.sub.provider.foo
 module.sub.provider.foo
-  provider.foo (disabled)
 provider.bar
-provider.foo (disabled)
 `
 
 const testTransformMissingProviderModuleChildStr = `
@@ -545,3 +609,15 @@ provider.aws (close)
   provider.aws
 var.foo
 `
+
+const testTransformModuleProviderConfigStr = `
+module.child.aws_instance.thing
+  provider.aws.foo
+provider.aws.foo
+`
+
+const testTransformModuleProviderGrandparentStr = `
+module.child.module.grandchild.aws_instance.baz
+  provider.aws.foo
+provider.aws.foo
+`