How to fix Error: Dynamic blocks may not be nested within dynamic blocks in Terraform

TerraformINTERMEDIATEMEDIUM

Terraform does not support nesting dynamic blocks directly inside other dynamic blocks. This limitation prevents you from using a dynamic block to generate nested dynamic blocks. You must use data structure flattening or other approaches to work around this constraint.

What this error means

Terraform's configuration language has a fundamental limitation: you cannot place one dynamic block directly inside another dynamic block. While dynamic blocks are powerful for generating resource arguments and nested blocks, they cannot be used to generate other dynamic blocks themselves. This is a language-level constraint imposed by Terraform's parser and evaluator.

How to fix "Error: Dynamic blocks may not be nested within dynamic blocks"

1Flatten your data structure using locals

Instead of nesting dynamic blocks, flatten your data into a single iterable collection using locals and built-in functions:

hcl

# ❌ Wrong - nested dynamic blocks
resource "example_resource" "parent" {
  dynamic "outer" {
    for_each = var.outer_items
    content {
      dynamic "inner" {
        for_each = outer.value.inner_items
        content {
          name = inner.value.name
        }
      }
    }
  }
}

# ✓ Correct - flatten to single level
locals {
  flattened_items = flatten([
    for outer in var.outer_items : [
      for inner in outer.inner_items : {
        outer_key  = outer.key
        inner_name = inner.name
      }
    ]
  ])
}

resource "example_resource" "parent" {
  dynamic "item" {
    for_each = local.flattened_items
    content {
      name = item.value.inner_name
    }
  }
}

2Use setproduct for Cartesian products

When you need combinations of multiple iterables, use the setproduct function to generate all combinations:

hcl

locals {
  region_az_pairs = setproduct(
    var.regions,
    var.availability_zones
  )
}

resource "example_instance" "multi_region" {
  for_each = {
    for pair in local.region_az_pairs : "${pair[0]}-${pair[1]}" => {
      region = pair[0]
      az     = pair[1]
    }
  }

  region = each.value.region
  az     = each.value.az
}

3Use iterator argument in single dynamic block

You can still have a single dynamic block that generates nested block content by using the iterator argument to avoid name conflicts:

hcl

resource "aws_lb" "example" {
  # Dynamic block for target groups
  dynamic "target_group" {
    for_each = var.target_groups
    iterator = tg
    content {
      name = tg.value.name
      
      # Nested blocks (not dynamic) that reference outer iterator
      health_check {
        path                = tg.value.health_check.path
        matcher             = tg.value.health_check.matcher
      }
    }
  }
}

4Move iteration logic to a module

Separate your configuration into modules where each module handles one level of iteration:

hcl

# module/outer/main.tf - handles outer iteration
dynamic "outer_block" {
  for_each = var.outer_items
  content {
    # Call inner module for each outer item
    inner_item = module.inner[outer_block.key]
  }
}

# module/inner/main.tf - handles inner iteration
resource "example_resource" "items" {
  for_each = var.inner_items
  name     = each.value.name
}

# root/main.tf
module "inner" {
  for_each = var.outer_items
  source   = "./module/inner"
  
  inner_items = each.value.items
}

5Use for_each with a flattened map

Convert nested structures to a map and use for_each instead of dynamic blocks:

hcl

locals {
  nested_map = {
    for outer_key, outer_val in var.outer_config : outer_key => {
      for inner_key, inner_val in outer_val.inner_config : "${outer_key}-${inner_key}" => inner_val
    }
  }
  
  flattened_map = merge([
    for outer_key, inner_configs in local.nested_map : inner_configs
  ]...)
}

resource "example_resource" "items" {
  for_each = local.flattened_map
  
  name = each.key
  # ... configuration
}

How to fix Error: Dynamic blocks may not be nested within dynamic blocks in Terraform

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