diff --git a/provisioner/terraform/provision.go b/provisioner/terraform/provision.go
index 4217f1e3901e8..4e9865e829344 100644
--- a/provisioner/terraform/provision.go
+++ b/provisioner/terraform/provision.go
@@ -66,6 +66,14 @@ func (t *terraform) Provision(stream proto.DRPCProvisioner_ProvisionStream) erro
 		return xerrors.Errorf("terraform version %q is too old. required >= %q", version.String(), minimumTerraformVersion.String())
 	}
 
+	statefilePath := filepath.Join(start.Directory, "terraform.tfstate")
+	if len(start.State) > 0 {
+		err := os.WriteFile(statefilePath, start.State, 0600)
+		if err != nil {
+			return xerrors.Errorf("write statefile %q: %w", statefilePath, err)
+		}
+	}
+
 	reader, writer := io.Pipe()
 	defer reader.Close()
 	defer writer.Close()
@@ -239,14 +247,7 @@ func (t *terraform) Provision(stream proto.DRPCProvisioner_ProvisionStream) erro
 		errorMessage := err.Error()
 		// Terraform can fail and apply and still need to store it's state.
 		// In this case, we return Complete with an explicit error message.
-		state, err := terraform.Show(stream.Context())
-		if err != nil {
-			return xerrors.Errorf("show state: %w", err)
-		}
-		stateData, err := json.Marshal(state)
-		if err != nil {
-			return xerrors.Errorf("marshal state: %w", err)
-		}
+		stateData, _ := os.ReadFile(statefilePath)
 		return stream.Send(&proto.Provision_Response{
 			Type: &proto.Provision_Response_Complete{
 				Complete: &proto.Provision_Complete{
@@ -263,7 +264,7 @@ func (t *terraform) Provision(stream proto.DRPCProvisioner_ProvisionStream) erro
 	if start.DryRun {
 		resp, err = parseTerraformPlan(stream.Context(), terraform, planfilePath)
 	} else {
-		resp, err = parseTerraformApply(stream.Context(), terraform)
+		resp, err = parseTerraformApply(stream.Context(), terraform, statefilePath)
 	}
 	if err != nil {
 		return err
@@ -363,10 +364,26 @@ func parseTerraformPlan(ctx context.Context, terraform *tfexec.Terraform, planfi
 	}, nil
 }
 
-func parseTerraformApply(ctx context.Context, terraform *tfexec.Terraform) (*proto.Provision_Response, error) {
-	state, err := terraform.Show(ctx)
+func parseTerraformApply(ctx context.Context, terraform *tfexec.Terraform, statefilePath string) (*proto.Provision_Response, error) {
+	_, err := os.Stat(statefilePath)
+	statefileExisted := err == nil
+
+	statefile, err := os.OpenFile(statefilePath, os.O_CREATE|os.O_RDWR, 0600)
 	if err != nil {
-		return nil, xerrors.Errorf("show state file: %w", err)
+		return nil, xerrors.Errorf("open statefile %q: %w", statefilePath, err)
+	}
+	defer statefile.Close()
+	// #nosec
+	cmd := exec.CommandContext(ctx, terraform.ExecPath(), "state", "pull")
+	cmd.Dir = terraform.WorkingDir()
+	cmd.Stdout = statefile
+	err = cmd.Run()
+	if err != nil {
+		return nil, xerrors.Errorf("pull terraform state: %w", err)
+	}
+	state, err := terraform.ShowStateFile(ctx, statefilePath)
+	if err != nil {
+		return nil, xerrors.Errorf("show terraform state: %w", err)
 	}
 	resources := make([]*proto.Resource, 0)
 	if state.Values != nil {
@@ -501,15 +518,19 @@ func parseTerraformApply(ctx context.Context, terraform *tfexec.Terraform) (*pro
 		}
 	}
 
-	statefileContent, err := json.Marshal(state)
-	if err != nil {
-		return nil, xerrors.Errorf("marshal state: %w", err)
+	var stateContent []byte
+	// We only want to restore state if it's not hosted remotely.
+	if statefileExisted {
+		stateContent, err = os.ReadFile(statefilePath)
+		if err != nil {
+			return nil, xerrors.Errorf("read statefile %q: %w", statefilePath, err)
+		}
 	}
 
 	return &proto.Provision_Response{
 		Type: &proto.Provision_Response_Complete{
 			Complete: &proto.Provision_Complete{
-				State:     statefileContent,
+				State:     stateContent,
 				Resources: resources,
 			},
 		},
diff --git a/provisioner/terraform/provision_test.go b/provisioner/terraform/provision_test.go
index d3682a932a23e..6169f8e5f0bc4 100644
--- a/provisioner/terraform/provision_test.go
+++ b/provisioner/terraform/provision_test.go
@@ -480,9 +480,6 @@ provider "coder" {
 				}
 
 				require.NoError(t, err)
-				if !request.GetStart().DryRun {
-					require.Greater(t, len(msg.GetComplete().State), 0)
-				}
 
 				// Remove randomly generated data.
 				for _, resource := range msg.GetComplete().Resources {