diff --git a/modules/terraform/format.go b/modules/terraform/format.go
index f50072d7c..7b6293a58 100644
--- a/modules/terraform/format.go
+++ b/modules/terraform/format.go
@@ -56,8 +56,13 @@ func FormatArgs(options *Options, args ...string) []string {
 	terraformArgs = append(terraformArgs, args...)
 
 	if includeVars {
-		terraformArgs = append(terraformArgs, FormatTerraformVarsAsArgs(options.Vars)...)
-		terraformArgs = append(terraformArgs, FormatTerraformArgs("-var-file", options.VarFiles)...)
+		if options.SetVarsAfterVarFiles {
+			terraformArgs = append(terraformArgs, FormatTerraformArgs("-var-file", options.VarFiles)...)
+			terraformArgs = append(terraformArgs, FormatTerraformVarsAsArgs(options.Vars)...)
+		} else {
+			terraformArgs = append(terraformArgs, FormatTerraformVarsAsArgs(options.Vars)...)
+			terraformArgs = append(terraformArgs, FormatTerraformArgs("-var-file", options.VarFiles)...)
+		}
 	}
 
 	terraformArgs = append(terraformArgs, FormatTerraformArgs("-target", options.Targets)...)
diff --git a/modules/terraform/format_test.go b/modules/terraform/format_test.go
index 3a2a325cb..99409053d 100644
--- a/modules/terraform/format_test.go
+++ b/modules/terraform/format_test.go
@@ -278,3 +278,37 @@ func TestFormatArgsAppliesLockCorrectly(t *testing.T) {
 		assert.Equal(t, testCase.expected, FormatArgs(&Options{}, testCase.command...))
 	}
 }
+
+func TestFormatSetVarsAfterVarFilesFormatsCorrectly(t *testing.T) {
+	t.Parallel()
+
+	testCases := []struct {
+		command              []string
+		vars                 map[string]interface{}
+		varFiles             []string
+		setVarsAfterVarFiles bool
+		expected             []string
+	}{
+		{[]string{"plan"}, map[string]interface{}{"foo": "bar"}, []string{"test.tfvars"}, true, []string{"plan", "-var-file", "test.tfvars", "-var", "foo=bar", "-lock=false"}},
+		{[]string{"plan"}, map[string]interface{}{"foo": "bar", "hello": "world"}, []string{"test.tfvars"}, true, []string{"plan", "-var-file", "test.tfvars", "-var", "foo=bar", "-var", "hello=world", "-lock=false"}},
+		{[]string{"plan"}, map[string]interface{}{"foo": "bar", "hello": "world"}, []string{"test.tfvars"}, false, []string{"plan", "-var", "foo=bar", "-var", "hello=world", "-var-file", "test.tfvars", "-lock=false"}},
+		{[]string{"plan"}, map[string]interface{}{"foo": "bar"}, []string{"test.tfvars"}, false, []string{"plan", "-var", "foo=bar", "-var-file", "test.tfvars", "-lock=false"}},
+	}
+
+	for _, testCase := range testCases {
+		result := FormatArgs(&Options{SetVarsAfterVarFiles: testCase.setVarsAfterVarFiles, Vars: testCase.vars, VarFiles: testCase.varFiles}, testCase.command...)
+
+		// Make sure that -var and -var-file options are in the expected order relative to each other
+		// Note that the order of the different -var and -var-file options may change
+		// See this comment for more info: https://github.com/gruntwork-io/terratest/blob/6fb86056797e3e62ebdd9011ba26605e0976a6f8/modules/terraform/format_test.go#L123-L142
+		for idx, arg := range result {
+			if arg == "-var-file" || arg == "-var" {
+				assert.Equal(t, testCase.expected[idx], arg)
+			}
+		}
+
+		// Make sure that the order of other arguments hasn't been incorrectly modified
+		assert.Equal(t, testCase.expected[0], result[0])
+		assert.Equal(t, testCase.expected[len(testCase.expected)-1], result[len(result)-1])
+	}
+}
diff --git a/modules/terraform/options.go b/modules/terraform/options.go
index 7ac78fdb6..9495a6c09 100644
--- a/modules/terraform/options.go
+++ b/modules/terraform/options.go
@@ -70,6 +70,7 @@ type Options struct {
 	Parallelism              int                    // Set the parallelism setting for Terraform
 	PlanFilePath             string                 // The path to output a plan file to (for the plan command) or read one from (for the apply command)
 	PluginDir                string                 // The path of downloaded plugins to pass to the terraform init command (-plugin-dir)
+	SetVarsAfterVarFiles     bool                   // Pass -var options after -var-file options to Terraform commands
 }
 
 // Clone makes a deep copy of most fields on the Options object and returns it.