diff --git a/CHANGELOG.md b/CHANGELOG.md
index 325546eec..eef2b9151 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,12 @@
 ## 0.10.6 (Unreleased)
 
+UPGRADE NOTES:
+
+* The internal storage of modules has changed in this release, so after
+  upgrading `terraform init` must be run to re-install modules in the new
+  on-disk format. The existing installed versions of modules will be ignored,
+  so the latest version of each module will be installed.
+
 IMPROVEMENTS:
 
 * cli: `terraform import` now accepts an option `-allow-missing-config` that overrides the default requirement that a configuration block must already be present for the resource being imported. [GH-15876]