diff --git a/CHANGELOG.md b/CHANGELOG.md
index d9e2e15ce4..034f476a06 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -37,6 +37,7 @@ BUG FIXES:
   * core: Fix issue where some JSON structures didn't map properly into
      Terraform structures. [GH-177]
   * core: Resources with only `file()` calls will interpolate. [GH-159]
+  * command/apply: "tfvars" file no longer interferes with plan apply. [GH-153]
   * providers/aws: Fix issues around failing to read EIPs. [GH-122]
   * providers/aws: Autoscaling groups now register and export load
     balancers. [GH-207]
diff --git a/command/apply_test.go b/command/apply_test.go
index 9a5edcf604..5cd7b7da02 100644
--- a/command/apply_test.go
+++ b/command/apply_test.go
@@ -283,6 +283,63 @@ func TestApply_plan(t *testing.T) {
 	}
 }
 
+func TestApply_planWithVarFile(t *testing.T) {
+	varFileDir := testTempDir(t)
+	varFilePath := filepath.Join(varFileDir, "terraform.tfvars")
+	if err := ioutil.WriteFile(varFilePath, []byte(applyVarFile), 0644); err != nil {
+		t.Fatalf("err: %s", err)
+	}
+
+	planPath := testPlanFile(t, &terraform.Plan{
+		Config: new(config.Config),
+	})
+	statePath := testTempFile(t)
+
+	cwd, err := os.Getwd()
+	if err != nil {
+		t.Fatalf("err: %s", err)
+	}
+	if err := os.Chdir(varFileDir); err != nil {
+		t.Fatalf("err: %s", err)
+	}
+	defer os.Chdir(cwd)
+
+	p := testProvider()
+	ui := new(cli.MockUi)
+	c := &ApplyCommand{
+		Meta: Meta{
+			ContextOpts: testCtxConfig(p),
+			Ui:          ui,
+		},
+	}
+
+	args := []string{
+		"-state", statePath,
+		planPath,
+	}
+	if code := c.Run(args); code != 0 {
+		t.Fatalf("bad: %d\n\n%s", code, ui.ErrorWriter.String())
+	}
+
+	if _, err := os.Stat(statePath); err != nil {
+		t.Fatalf("err: %s", err)
+	}
+
+	f, err := os.Open(statePath)
+	if err != nil {
+		t.Fatalf("err: %s", err)
+	}
+	defer f.Close()
+
+	state, err := terraform.ReadState(f)
+	if err != nil {
+		t.Fatalf("err: %s", err)
+	}
+	if state == nil {
+		t.Fatal("state should not be nil")
+	}
+}
+
 func TestApply_planVars(t *testing.T) {
 	planPath := testPlanFile(t, &terraform.Plan{
 		Config: new(config.Config),
diff --git a/command/meta.go b/command/meta.go
index aaf00d7dd0..1b83e6da91 100644
--- a/command/meta.go
+++ b/command/meta.go
@@ -3,6 +3,7 @@ package command
 import (
 	"flag"
 	"fmt"
+	"math/rand"
 	"os"
 
 	"github.com/hashicorp/terraform/config"
@@ -25,7 +26,9 @@ type Meta struct {
 	extraHooks []terraform.Hook
 
 	// Variables for the context (private)
-	variables map[string]string
+	autoKey       string
+	autoVariables map[string]string
+	variables     map[string]string
 
 	color bool
 	oldUi cli.Ui
@@ -109,16 +112,17 @@ func (m *Meta) contextOpts() *terraform.ContextOpts {
 	copy(opts.Hooks[1:], m.ContextOpts.Hooks)
 	copy(opts.Hooks[len(m.ContextOpts.Hooks)+1:], m.extraHooks)
 
-	if len(m.variables) > 0 {
-		vs := make(map[string]string)
-		for k, v := range opts.Variables {
-			vs[k] = v
-		}
-		for k, v := range m.variables {
-			vs[k] = v
-		}
-		opts.Variables = vs
+	vs := make(map[string]string)
+	for k, v := range opts.Variables {
+		vs[k] = v
 	}
+	for k, v := range m.autoVariables {
+		vs[k] = v
+	}
+	for k, v := range m.variables {
+		vs[k] = v
+	}
+	opts.Variables = vs
 
 	return &opts
 }
@@ -128,6 +132,11 @@ func (m *Meta) flagSet(n string) *flag.FlagSet {
 	f := flag.NewFlagSet(n, flag.ContinueOnError)
 	f.Var((*FlagVar)(&m.variables), "var", "variables")
 	f.Var((*FlagVarFile)(&m.variables), "var-file", "variable file")
+
+	if m.autoKey != "" {
+		f.Var((*FlagVarFile)(&m.autoVariables), m.autoKey, "variable file")
+	}
+
 	return f
 }
 
@@ -163,11 +172,13 @@ func (m *Meta) process(args []string, vars bool) []string {
 
 	// If we support vars and the default var file exists, add it to
 	// the args...
+	m.autoKey = ""
 	if vars {
 		if _, err := os.Stat(DefaultVarsFilename); err == nil {
+			m.autoKey = fmt.Sprintf("var-file-%d", rand.Int())
 			args = append(args, "", "")
 			copy(args[2:], args[0:])
-			args[0] = "-var-file"
+			args[0] = "-" + m.autoKey
 			args[1] = DefaultVarsFilename
 		}
 	}