OpenTofu is a community-driven fork of Terraform created after HashiCorp relicensed Terraform from MPL-2.0 to the Business Source License in August 2023. It is hosted by the Linux Foundation, remains MPL-2.0, and is a drop-in replacement for terraform: the HCL language, provider protocol, state file format, and CLI surface all match.
OpenTofu stayed compatible with Terraform 1.5 and has since added features that the MPL community had been asking for. State encryption lets you encrypt state files at rest with AES-GCM using keys from KMS, PBKDF2, or static sources, without relying on bucket-level encryption alone. Provider-defined functions, early evaluation of for_each and count, and a fully open registry at registry.opentofu.org are post-fork additions. It uses the same terraform-provider-* plugins, which gives it immediate access to every provider written against the Terraform Plugin Protocol.
OpenTofu is supported by Spacelift, env0, Scalr, Gruntwork, Harness, Digger, and others, and has its own CI integrations and IDE tooling alongside (or in place of) the official Terraform ones. For teams that want to stay on an open-source license or avoid BSL exposure in internal tooling, OpenTofu is the canonical path; for everyone else it is a near-identical alternative that tracks Terraform’s capabilities closely while drifting in opinionated directions like state encryption.