diff --git a/backend/remote/backend.go b/backend/remote/backend.go
index ce400d4d6..3e9173e40 100644
--- a/backend/remote/backend.go
+++ b/backend/remote/backend.go
@@ -641,7 +641,10 @@ func (b *Remote) StateMgr(name string) (statemgr.Full, error) {
 	// accidentally upgrade state with a new code path, and the version check
 	// logic is coarser and simpler.
 	if !b.ignoreVersionConflict {
-		if workspace.TerraformVersion != tfversion.String() {
+		wsv := workspace.TerraformVersion
+		// Explicitly ignore the pseudo-version "latest" here, as it will cause
+		// plan and apply to always fail.
+		if wsv != tfversion.String() && wsv != "latest" {
 			return nil, fmt.Errorf("Remote workspace Terraform version %q does not match local Terraform version %q", workspace.TerraformVersion, tfversion.String())
 		}
 	}
@@ -890,6 +893,13 @@ func (b *Remote) VerifyWorkspaceTerraformVersion(workspaceName string) tfdiags.D
 		return diags
 	}
 
+	// If the workspace has the pseudo-version "latest", all bets are off. We
+	// cannot reasonably determine what the intended Terraform version is, so
+	// we'll skip version verification.
+	if workspace.TerraformVersion == "latest" {
+		return nil
+	}
+
 	remoteVersion, err := version.NewSemver(workspace.TerraformVersion)
 	if err != nil {
 		diags = diags.Append(tfdiags.Sourceless(
diff --git a/backend/remote/backend_test.go b/backend/remote/backend_test.go
index 46dc5c64a..139ddafd3 100644
--- a/backend/remote/backend_test.go
+++ b/backend/remote/backend_test.go
@@ -515,6 +515,45 @@ func TestRemote_StateMgr_versionCheck(t *testing.T) {
 	}
 }
 
+func TestRemote_StateMgr_versionCheckLatest(t *testing.T) {
+	b, bCleanup := testBackendDefault(t)
+	defer bCleanup()
+
+	v0140 := version.Must(version.NewSemver("0.14.0"))
+
+	// Save original local version state and restore afterwards
+	p := tfversion.Prerelease
+	v := tfversion.Version
+	s := tfversion.SemVer
+	defer func() {
+		tfversion.Prerelease = p
+		tfversion.Version = v
+		tfversion.SemVer = s
+	}()
+
+	// For this test, the local Terraform version is set to 0.14.0
+	tfversion.Prerelease = ""
+	tfversion.Version = v0140.String()
+	tfversion.SemVer = v0140
+
+	// Update the remote workspace to the pseudo-version "latest"
+	if _, err := b.client.Workspaces.Update(
+		context.Background(),
+		b.organization,
+		b.workspace,
+		tfe.WorkspaceUpdateOptions{
+			TerraformVersion: tfe.String("latest"),
+		},
+	); err != nil {
+		t.Fatalf("error: %v", err)
+	}
+
+	// This should succeed despite not being a string match
+	if _, err := b.StateMgr(backend.DefaultStateName); err != nil {
+		t.Fatalf("expected no error, got %v", err)
+	}
+}
+
 func TestRemote_VerifyWorkspaceTerraformVersion(t *testing.T) {
 	testCases := []struct {
 		local   string
@@ -528,6 +567,7 @@ func TestRemote_VerifyWorkspaceTerraformVersion(t *testing.T) {
 		{"0.14.0", "1.1.0", true},
 		{"1.2.0", "1.2.99", false},
 		{"1.2.0", "1.3.0", true},
+		{"0.15.0", "latest", false},
 	}
 	for _, tc := range testCases {
 		t.Run(fmt.Sprintf("local %s, remote %s", tc.local, tc.remote), func(t *testing.T) {
@@ -535,7 +575,6 @@ func TestRemote_VerifyWorkspaceTerraformVersion(t *testing.T) {
 			defer bCleanup()
 
 			local := version.Must(version.NewSemver(tc.local))
-			remote := version.Must(version.NewSemver(tc.remote))
 
 			// Save original local version state and restore afterwards
 			p := tfversion.Prerelease
@@ -559,7 +598,7 @@ func TestRemote_VerifyWorkspaceTerraformVersion(t *testing.T) {
 				b.organization,
 				b.workspace,
 				tfe.WorkspaceUpdateOptions{
-					TerraformVersion: tfe.String(remote.String()),
+					TerraformVersion: tfe.String(tc.remote),
 				},
 			); err != nil {
 				t.Fatalf("error: %v", err)