diff --git a/builtin/providers/test/provider.go b/builtin/providers/test/provider.go
index 1c0fc574d3..59dd550855 100644
--- a/builtin/providers/test/provider.go
+++ b/builtin/providers/test/provider.go
@@ -24,6 +24,7 @@ func Provider() terraform.ResourceProvider {
 			"test_resource_diff_suppress":    testResourceDiffSuppress(),
 			"test_resource_force_new":        testResourceForceNew(),
 			"test_resource_nested":           testResourceNested(),
+			"test_resource_nested_set":       testResourceNestedSet(),
 		},
 		DataSourcesMap: map[string]*schema.Resource{
 			"test_data_source":    testDataSource(),
diff --git a/builtin/providers/test/resource_diff_suppress.go b/builtin/providers/test/resource_diff_suppress.go
index 5c01a1d09d..cb5f7358f5 100644
--- a/builtin/providers/test/resource_diff_suppress.go
+++ b/builtin/providers/test/resource_diff_suppress.go
@@ -1,23 +1,36 @@
 package test
 
 import (
+	"fmt"
+	"math/rand"
 	"strings"
 
 	"github.com/hashicorp/terraform/helper/schema"
 )
 
 func testResourceDiffSuppress() *schema.Resource {
+	diffSuppress := func(k, old, new string, d *schema.ResourceData) bool {
+		if old == "" || strings.Contains(new, "replace") {
+			return false
+		}
+		return true
+	}
+
 	return &schema.Resource{
 		Create: testResourceDiffSuppressCreate,
 		Read:   testResourceDiffSuppressRead,
-		Update: testResourceDiffSuppressUpdate,
 		Delete: testResourceDiffSuppressDelete,
+		Update: testResourceDiffSuppressUpdate,
 
 		Importer: &schema.ResourceImporter{
 			State: schema.ImportStatePassthrough,
 		},
 
 		Schema: map[string]*schema.Schema{
+			"optional": {
+				Type:     schema.TypeString,
+				Optional: true,
+			},
 			"val_to_upper": {
 				Type:     schema.TypeString,
 				Required: true,
@@ -29,18 +42,48 @@ func testResourceDiffSuppress() *schema.Resource {
 					return strings.ToUpper(old) == strings.ToUpper(new)
 				},
 			},
-			"optional": {
-				Type:     schema.TypeString,
+			"network": {
+				Type:             schema.TypeString,
+				Optional:         true,
+				Default:          "default",
+				ForceNew:         true,
+				DiffSuppressFunc: diffSuppress,
+			},
+			"subnetwork": {
+				Type:             schema.TypeString,
+				Optional:         true,
+				Computed:         true,
+				ForceNew:         true,
+				DiffSuppressFunc: diffSuppress,
+			},
+
+			"node_pool": {
+				Type:     schema.TypeList,
 				Optional: true,
+				Computed: true,
+				ForceNew: true,
+				Elem: &schema.Resource{
+					Schema: map[string]*schema.Schema{
+						"name": &schema.Schema{
+							Type:     schema.TypeString,
+							Optional: true,
+							Computed: true,
+							ForceNew: true,
+						},
+					},
+				},
 			},
 		},
 	}
 }
 
 func testResourceDiffSuppressCreate(d *schema.ResourceData, meta interface{}) error {
-	d.SetId("testId")
+	d.Set("network", "modified")
+	d.Set("subnetwork", "modified")
 
-	return testResourceRead(d, meta)
+	id := fmt.Sprintf("%x", rand.Int63())
+	d.SetId(id)
+	return nil
 }
 
 func testResourceDiffSuppressRead(d *schema.ResourceData, meta interface{}) error {
diff --git a/builtin/providers/test/resource_diff_suppress_test.go b/builtin/providers/test/resource_diff_suppress_test.go
index 59490e3584..89416f32a1 100644
--- a/builtin/providers/test/resource_diff_suppress_test.go
+++ b/builtin/providers/test/resource_diff_suppress_test.go
@@ -1,10 +1,14 @@
 package test
 
 import (
+	"errors"
 	"strings"
 	"testing"
 
+	"github.com/hashicorp/terraform/addrs"
+
 	"github.com/hashicorp/terraform/helper/resource"
+	"github.com/hashicorp/terraform/terraform"
 )
 
 func TestResourceDiffSuppress_create(t *testing.T) {
@@ -45,3 +49,78 @@ resource "test_resource_diff_suppress" "foo" {
 		},
 	})
 }
+
+func TestResourceDiffSuppress_updateIgnoreChanges(t *testing.T) {
+	// None of these steps should replace the instance
+	id := ""
+	checkFunc := func(s *terraform.State) error {
+		root := s.ModuleByPath(addrs.RootModuleInstance)
+		res := root.Resources["test_resource_diff_suppress.foo"]
+		if id != "" && res.Primary.ID != id {
+			return errors.New("expected no resource replacement")
+		}
+		id = res.Primary.ID
+		return nil
+	}
+
+	resource.UnitTest(t, resource.TestCase{
+		Providers:    testAccProviders,
+		CheckDestroy: testAccCheckResourceDestroy,
+		Steps: []resource.TestStep{
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_diff_suppress" "foo" {
+	val_to_upper = "foo"
+
+	network    = "foo"
+	subnetwork = "foo"
+
+	node_pool {
+	  name = "default-pool"
+	}
+	lifecycle {
+		ignore_changes = ["node_pool"]
+	}
+}
+				`),
+				Check: checkFunc,
+			},
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_diff_suppress" "foo" {
+	val_to_upper = "foo"
+
+	network    = "ignored"
+	subnetwork = "ignored"
+
+	node_pool {
+		name = "default-pool"
+	}
+	lifecycle {
+		ignore_changes = ["node_pool"]
+	}
+}
+				`),
+				Check: checkFunc,
+			},
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_diff_suppress" "foo" {
+	val_to_upper = "foo"
+
+	network    = "ignored"
+	subnetwork = "ignored"
+
+	node_pool {
+		name = "ignored"
+	}
+	lifecycle {
+		ignore_changes = ["node_pool"]
+	}
+}
+			`),
+				Check: checkFunc,
+			},
+		},
+	})
+}
diff --git a/builtin/providers/test/resource_nested_set.go b/builtin/providers/test/resource_nested_set.go
new file mode 100644
index 0000000000..c1e6520fb9
--- /dev/null
+++ b/builtin/providers/test/resource_nested_set.go
@@ -0,0 +1,127 @@
+package test
+
+import (
+	"fmt"
+	"math/rand"
+
+	"github.com/hashicorp/terraform/helper/schema"
+)
+
+func testResourceNestedSet() *schema.Resource {
+	return &schema.Resource{
+		Create: testResourceNestedSetCreate,
+		Read:   testResourceNestedSetRead,
+		Delete: testResourceNestedSetDelete,
+		Update: testResourceNestedSetUpdate,
+
+		Importer: &schema.ResourceImporter{
+			State: schema.ImportStatePassthrough,
+		},
+
+		Schema: map[string]*schema.Schema{
+			"optional": {
+				Type:     schema.TypeBool,
+				Optional: true,
+			},
+			"force_new": {
+				Type:     schema.TypeString,
+				Optional: true,
+				ForceNew: true,
+			},
+			"single": {
+				Type:     schema.TypeSet,
+				Optional: true,
+				MaxItems: 1,
+				Elem: &schema.Resource{
+					Schema: map[string]*schema.Schema{
+						"value": {
+							Type:     schema.TypeString,
+							ForceNew: true,
+							Required: true,
+						},
+
+						"optional": {
+							Type:     schema.TypeString,
+							ForceNew: true,
+							Optional: true,
+							Computed: true,
+						},
+					},
+				},
+			},
+			"multi": {
+				Type:     schema.TypeSet,
+				Optional: true,
+				Elem: &schema.Resource{
+					Schema: map[string]*schema.Schema{
+						"set": {
+							Type:     schema.TypeSet,
+							Optional: true,
+							Elem: &schema.Resource{
+								Schema: map[string]*schema.Schema{
+									"required": {
+										Type:     schema.TypeString,
+										Required: true,
+										ForceNew: true,
+									},
+									"optional_int": {
+										Type:     schema.TypeInt,
+										Optional: true,
+									},
+									"bool": {
+										Type:     schema.TypeBool,
+										Optional: true,
+									},
+								},
+							},
+						},
+
+						"optional": {
+							Type: schema.TypeString,
+							// commenting this causes it to get missed during apply
+							//ForceNew: true,
+							Optional: true,
+						},
+						"bool": {
+							Type:     schema.TypeBool,
+							Optional: true,
+						},
+					},
+				},
+			},
+		},
+	}
+}
+
+func testResourceNestedSetCreate(d *schema.ResourceData, meta interface{}) error {
+	id := fmt.Sprintf("%x", rand.Int63())
+	d.SetId(id)
+
+	// replicate some awkward handling of a computed value in a set
+	set := d.Get("single").(*schema.Set)
+	l := set.List()
+	if len(l) == 1 {
+		if s, ok := l[0].(map[string]interface{}); ok {
+			if v, _ := s["optional"].(string); v == "" {
+				s["optional"] = id
+			}
+		}
+	}
+
+	d.Set("single", set)
+
+	return testResourceNestedRead(d, meta)
+}
+
+func testResourceNestedSetRead(d *schema.ResourceData, meta interface{}) error {
+	return nil
+}
+
+func testResourceNestedSetDelete(d *schema.ResourceData, meta interface{}) error {
+	d.SetId("")
+	return nil
+}
+
+func testResourceNestedSetUpdate(d *schema.ResourceData, meta interface{}) error {
+	return nil
+}
diff --git a/builtin/providers/test/resource_nested_set_test.go b/builtin/providers/test/resource_nested_set_test.go
new file mode 100644
index 0000000000..fe28187011
--- /dev/null
+++ b/builtin/providers/test/resource_nested_set_test.go
@@ -0,0 +1,307 @@
+package test
+
+import (
+	"errors"
+	"fmt"
+	"strings"
+	"testing"
+
+	"github.com/hashicorp/terraform/addrs"
+	"github.com/hashicorp/terraform/helper/resource"
+	"github.com/hashicorp/terraform/terraform"
+)
+
+func TestResourceNestedSet_basic(t *testing.T) {
+	resource.UnitTest(t, resource.TestCase{
+		Providers:    testAccProviders,
+		CheckDestroy: testAccCheckResourceDestroy,
+		Steps: []resource.TestStep{
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+	single {
+		value = "bar"
+	}
+}
+				`),
+			},
+		},
+	})
+}
+
+// The set should not be generated because of it's computed value
+func TestResourceNestedSet_noSet(t *testing.T) {
+	checkFunc := func(s *terraform.State) error {
+		root := s.ModuleByPath(addrs.RootModuleInstance)
+		res := root.Resources["test_resource_nested_set.foo"]
+		for k, v := range res.Primary.Attributes {
+			if strings.HasPrefix(k, "single") && k != "single.#" {
+				return fmt.Errorf("unexpected set value: %s:%s", k, v)
+			}
+		}
+		return nil
+	}
+	resource.UnitTest(t, resource.TestCase{
+		Providers:    testAccProviders,
+		CheckDestroy: testAccCheckResourceDestroy,
+		Steps: []resource.TestStep{
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+}
+				`),
+				Check: checkFunc,
+			},
+		},
+	})
+}
+
+func TestResourceNestedSet_addRemove(t *testing.T) {
+	var id string
+	checkFunc := func(s *terraform.State) error {
+		root := s.ModuleByPath(addrs.RootModuleInstance)
+		res := root.Resources["test_resource_nested_set.foo"]
+		if res.Primary.ID == id {
+			return errors.New("expected new resource")
+		}
+		id = res.Primary.ID
+		return nil
+	}
+	resource.UnitTest(t, resource.TestCase{
+		Providers:    testAccProviders,
+		CheckDestroy: testAccCheckResourceDestroy,
+		Steps: []resource.TestStep{
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+}
+				`),
+				Check: checkFunc,
+			},
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+	single {
+		value = "bar"
+	}
+}
+				`),
+				Check: checkFunc,
+			},
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+}
+				`),
+				Check: checkFunc,
+			},
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+	single {
+		value = "bar"
+	}
+}
+				`),
+				Check: checkFunc,
+			},
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+	single {
+		value = "bar"
+		optional = "baz"
+	}
+}
+				`),
+				Check: checkFunc,
+			},
+
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+}
+			   	`),
+				Check: checkFunc,
+			},
+		},
+	})
+}
+func TestResourceNestedSet_multiAddRemove(t *testing.T) {
+	checkFunc := func(s *terraform.State) error {
+		return nil
+	}
+	resource.UnitTest(t, resource.TestCase{
+		Providers:    testAccProviders,
+		CheckDestroy: testAccCheckResourceDestroy,
+		Steps: []resource.TestStep{
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+}
+				`),
+				Check: checkFunc,
+			},
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+	multi {
+		optional = "bar"
+	}
+}
+				`),
+				Check: checkFunc,
+			},
+
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+}
+								`),
+				Check: checkFunc,
+			},
+
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+	multi {
+		set {
+			required = "val"
+		}
+	}
+}
+				`),
+				Check: checkFunc,
+			},
+
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+	multi {
+		set {
+			required = "new"
+		}
+	}
+}
+				`),
+				Check: checkFunc,
+			},
+
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+	multi {
+		set {
+			required = "new"
+			optional_int = 3
+		}
+	}
+}
+				`),
+				Check: checkFunc,
+			},
+
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+	single {
+		value = "bar"
+		optional = "baz"
+	}
+	multi {
+		set {
+			required = "new"
+			optional_int = 3
+		}
+	}
+}
+			`),
+				Check: checkFunc,
+			},
+
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+	optional = true
+	single {
+		value = "bar"
+		optional = "baz"
+	}
+	multi {
+		set {
+			required = "new"
+			optional_int = 3
+		}
+	}
+}
+			`),
+				Check: checkFunc,
+			},
+		},
+	})
+}
+
+func TestResourceNestedSet_forceNewEmptyString(t *testing.T) {
+	var id string
+	step := 0
+	checkFunc := func(s *terraform.State) error {
+		root := s.ModuleByPath(addrs.RootModuleInstance)
+		res := root.Resources["test_resource_nested_set.foo"]
+		defer func() {
+			step++
+			id = res.Primary.ID
+		}()
+
+		if step == 2 && res.Primary.ID == id {
+			// setting an empty string currently does not trigger ForceNew, but
+			// it should in the future.
+			return nil
+		}
+
+		if res.Primary.ID == id {
+			return errors.New("expected new resource")
+		}
+
+		return nil
+	}
+	resource.UnitTest(t, resource.TestCase{
+		Providers:    testAccProviders,
+		CheckDestroy: testAccCheckResourceDestroy,
+		Steps: []resource.TestStep{
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+	multi {
+		set {
+			required = "val"
+		}
+	}
+}
+				`),
+				Check: checkFunc,
+			},
+
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+	multi {
+		set {
+			required = ""
+		}
+	}
+}
+				`),
+				Check: checkFunc,
+			},
+
+			resource.TestStep{
+				Config: strings.TrimSpace(`
+resource "test_resource_nested_set" "foo" {
+	force_new = ""
+}
+				`),
+				Check: checkFunc,
+			},
+		},
+	})
+}
diff --git a/config/hcl2shim/flatmap.go b/config/hcl2shim/flatmap.go
index 2f7954d76c..bcecb30df7 100644
--- a/config/hcl2shim/flatmap.go
+++ b/config/hcl2shim/flatmap.go
@@ -356,6 +356,11 @@ func hcl2ValueFromFlatmapSet(m map[string]string, prefix string, ty cty.Type) (c
 		return cty.UnknownVal(ty), nil
 	}
 
+	// Keep track of keys we've seen, se we don't add the same set value
+	// multiple times. The cty.Set will normally de-duplicate values, but we may
+	// have unknown values that would not show as equivalent.
+	seen := map[string]bool{}
+
 	for fullKey := range m {
 		if !strings.HasPrefix(fullKey, prefix) {
 			continue
@@ -370,6 +375,12 @@ func hcl2ValueFromFlatmapSet(m map[string]string, prefix string, ty cty.Type) (c
 			key = fullKey[:dot+len(prefix)]
 		}
 
+		if seen[key] {
+			continue
+		}
+
+		seen[key] = true
+
 		// The flatmap format doesn't allow us to distinguish between keys
 		// that contain periods and nested objects, so by convention a
 		// map is only ever of primitive type in flatmap, and we just assume
@@ -386,5 +397,6 @@ func hcl2ValueFromFlatmapSet(m map[string]string, prefix string, ty cty.Type) (c
 	if len(vals) == 0 {
 		return cty.SetValEmpty(ety), nil
 	}
+
 	return cty.SetVal(vals), nil
 }
diff --git a/config/hcl2shim/flatmap_test.go b/config/hcl2shim/flatmap_test.go
index 56c06c3dc5..07f93ac265 100644
--- a/config/hcl2shim/flatmap_test.go
+++ b/config/hcl2shim/flatmap_test.go
@@ -635,6 +635,50 @@ func TestHCL2ValueFromFlatmap(t *testing.T) {
 				}),
 			}),
 		},
+		{
+			Flatmap: map[string]string{
+				"single.#":                 "1",
+				"single.~1.value":          "a",
+				"single.~1.optional":       UnknownVariableValue,
+				"two.#":                    "2",
+				"two.~2381914684.value":    "a",
+				"two.~2381914684.optional": UnknownVariableValue,
+				"two.~2798940671.value":    "b",
+				"two.~2798940671.optional": UnknownVariableValue,
+			},
+			Type: cty.Object(map[string]cty.Type{
+				"single": cty.Set(
+					cty.Object(map[string]cty.Type{
+						"value":    cty.String,
+						"optional": cty.String,
+					}),
+				),
+				"two": cty.Set(
+					cty.Object(map[string]cty.Type{
+						"optional": cty.String,
+						"value":    cty.String,
+					}),
+				),
+			}),
+			Want: cty.ObjectVal(map[string]cty.Value{
+				"single": cty.SetVal([]cty.Value{
+					cty.ObjectVal(map[string]cty.Value{
+						"value":    cty.StringVal("a"),
+						"optional": cty.UnknownVal(cty.String),
+					}),
+				}),
+				"two": cty.SetVal([]cty.Value{
+					cty.ObjectVal(map[string]cty.Value{
+						"value":    cty.StringVal("a"),
+						"optional": cty.UnknownVal(cty.String),
+					}),
+					cty.ObjectVal(map[string]cty.Value{
+						"value":    cty.StringVal("b"),
+						"optional": cty.UnknownVal(cty.String),
+					}),
+				}),
+			}),
+		},
 	}
 
 	for _, test := range tests {
diff --git a/configs/configschema/coerce_value.go b/configs/configschema/coerce_value.go
index e6b163b9f7..bae5733df7 100644
--- a/configs/configschema/coerce_value.go
+++ b/configs/configschema/coerce_value.go
@@ -113,7 +113,7 @@ func (b *Block) coerceValue(in cty.Value, path cty.Path) (cty.Value, error) {
 					return cty.UnknownVal(b.ImpliedType()), path.NewErrorf("insufficient items for attribute %q; must have at least %d", typeName, blockS.MinItems)
 				}
 				if l > blockS.MaxItems && blockS.MaxItems > 0 {
-					return cty.UnknownVal(b.ImpliedType()), path.NewErrorf("too many items for attribute %q; must have at least %d", typeName, blockS.MinItems)
+					return cty.UnknownVal(b.ImpliedType()), path.NewErrorf("too many items for attribute %q; cannot have more than %d", typeName, blockS.MaxItems)
 				}
 				if l == 0 {
 					attrs[typeName] = cty.ListValEmpty(blockS.ImpliedType())
@@ -161,7 +161,7 @@ func (b *Block) coerceValue(in cty.Value, path cty.Path) (cty.Value, error) {
 					return cty.UnknownVal(b.ImpliedType()), path.NewErrorf("insufficient items for attribute %q; must have at least %d", typeName, blockS.MinItems)
 				}
 				if l > blockS.MaxItems && blockS.MaxItems > 0 {
-					return cty.UnknownVal(b.ImpliedType()), path.NewErrorf("too many items for attribute %q; must have at least %d", typeName, blockS.MinItems)
+					return cty.UnknownVal(b.ImpliedType()), path.NewErrorf("too many items for attribute %q; cannot have more than %d", typeName, blockS.MaxItems)
 				}
 				if l == 0 {
 					attrs[typeName] = cty.SetValEmpty(blockS.ImpliedType())
diff --git a/helper/plugin/grpc_provider.go b/helper/plugin/grpc_provider.go
index a25aa67459..c668e9733b 100644
--- a/helper/plugin/grpc_provider.go
+++ b/helper/plugin/grpc_provider.go
@@ -3,7 +3,10 @@ package plugin
 import (
 	"encoding/json"
 	"errors"
+	"regexp"
+	"sort"
 	"strconv"
+	"strings"
 
 	"github.com/zclconf/go-cty/cty"
 	ctyconvert "github.com/zclconf/go-cty/cty/convert"
@@ -387,7 +390,11 @@ func (s *GRPCProviderServer) ReadResource(_ context.Context, req *proto.ReadReso
 		return resp, nil
 	}
 
-	instanceState := schema.InstanceStateFromStateValue(stateVal, res.SchemaVersion)
+	instanceState, err := res.ShimInstanceStateFromValue(stateVal)
+	if err != nil {
+		resp.Diagnostics = convert.AppendProtoDiag(resp.Diagnostics, err)
+		return resp, nil
+	}
 
 	newInstanceState, err := res.RefreshWithoutUpgrade(instanceState, s.provider.Meta())
 	if err != nil {
@@ -412,6 +419,8 @@ func (s *GRPCProviderServer) ReadResource(_ context.Context, req *proto.ReadReso
 	// helper/schema should always copy the ID over, but do it again just to be safe
 	newInstanceState.Attributes["id"] = newInstanceState.ID
 
+	newInstanceState.Attributes = normalizeFlatmapContainers(newInstanceState.Attributes)
+
 	newStateVal, err := hcl2shim.HCL2ValueFromFlatmap(newInstanceState.Attributes, block.ImpliedType())
 	if err != nil {
 		resp.Diagnostics = convert.AppendProtoDiag(resp.Diagnostics, err)
@@ -455,7 +464,12 @@ func (s *GRPCProviderServer) PlanResourceChange(_ context.Context, req *proto.Pl
 		Type: req.TypeName,
 	}
 
-	priorState := schema.InstanceStateFromStateValue(priorStateVal, res.SchemaVersion)
+	priorState, err := res.ShimInstanceStateFromValue(priorStateVal)
+	if err != nil {
+		resp.Diagnostics = convert.AppendProtoDiag(resp.Diagnostics, err)
+		return resp, nil
+	}
+
 	priorPrivate := make(map[string]interface{})
 	if len(req.PriorPrivate) > 0 {
 		if err := json.Unmarshal(req.PriorPrivate, &priorPrivate); err != nil {
@@ -489,8 +503,33 @@ func (s *GRPCProviderServer) PlanResourceChange(_ context.Context, req *proto.Pl
 		return resp, nil
 	}
 
+	// strip out non-diffs
+	for k, v := range diff.Attributes {
+		if v.New == v.Old && !v.NewComputed && !v.NewRemoved {
+			delete(diff.Attributes, k)
+		}
+	}
+
+	if priorState == nil {
+		priorState = &terraform.InstanceState{}
+	}
+
 	// now we need to apply the diff to the prior state, so get the planned state
-	plannedStateVal, err := schema.ApplyDiff(priorStateVal, diff, block)
+	plannedAttrs, err := diff.Apply(priorState.Attributes, block)
+
+	plannedAttrs = normalizeFlatmapContainers(plannedAttrs)
+
+	plannedStateVal, err := hcl2shim.HCL2ValueFromFlatmap(plannedAttrs, block.ImpliedType())
+	if err != nil {
+		resp.Diagnostics = convert.AppendProtoDiag(resp.Diagnostics, err)
+		return resp, nil
+	}
+
+	plannedStateVal, err = block.CoerceValue(plannedStateVal)
+	if err != nil {
+		resp.Diagnostics = convert.AppendProtoDiag(resp.Diagnostics, err)
+		return resp, nil
+	}
 	if err != nil {
 		resp.Diagnostics = convert.AppendProtoDiag(resp.Diagnostics, err)
 		return resp, nil
@@ -571,7 +610,11 @@ func (s *GRPCProviderServer) ApplyResourceChange(_ context.Context, req *proto.A
 		Type: req.TypeName,
 	}
 
-	priorState := schema.InstanceStateFromStateValue(priorStateVal, res.SchemaVersion)
+	priorState, err := res.ShimInstanceStateFromValue(priorStateVal)
+	if err != nil {
+		resp.Diagnostics = convert.AppendProtoDiag(resp.Diagnostics, err)
+		return resp, nil
+	}
 
 	private := make(map[string]interface{})
 	if len(req.PlannedPrivate) > 0 {
@@ -607,6 +650,13 @@ func (s *GRPCProviderServer) ApplyResourceChange(_ context.Context, req *proto.A
 		}
 	}
 
+	// strip out non-diffs
+	for k, v := range diff.Attributes {
+		if v.New == v.Old && !v.NewComputed && !v.NewRemoved {
+			delete(diff.Attributes, k)
+		}
+	}
+
 	if private != nil {
 		diff.Meta = private
 	}
@@ -617,6 +667,10 @@ func (s *GRPCProviderServer) ApplyResourceChange(_ context.Context, req *proto.A
 		return resp, nil
 	}
 
+	if newInstanceState != nil {
+		newInstanceState.Attributes = normalizeFlatmapContainers(newInstanceState.Attributes)
+	}
+
 	newStateVal := cty.NullVal(block.ImpliedType())
 
 	// We keep the null val if we destroyed the resource, otherwise build the
@@ -790,6 +844,62 @@ func pathToAttributePath(path cty.Path) *proto.AttributePath {
 	return &proto.AttributePath{Steps: steps}
 }
 
+// normalizeFlatmapContainers removes empty containers, and fixes counts in a
+// set of flatmapped attributes.
+func normalizeFlatmapContainers(attrs map[string]string) map[string]string {
+	keyRx := regexp.MustCompile(`.*\.[%#]$`)
+
+	// find container keys
+	var keys []string
+	for k := range attrs {
+		if keyRx.MatchString(k) {
+			keys = append(keys, k)
+		}
+	}
+
+	// sort the keys in reverse, so that we check the longest subkeys first
+	sort.Slice(keys, func(i, j int) bool {
+		a, b := keys[i], keys[j]
+
+		if strings.HasPrefix(a, b) {
+			return true
+		}
+
+		if strings.HasPrefix(b, a) {
+			return false
+		}
+
+		return a > b
+	})
+
+	for _, k := range keys {
+		prefix := k[:len(k)-1]
+		indexes := map[string]int{}
+		for cand := range attrs {
+			if cand == k {
+				continue
+			}
+
+			if strings.HasPrefix(cand, prefix) {
+				idx := cand[len(prefix):]
+				dot := strings.Index(idx, ".")
+				if dot > 0 {
+					idx = idx[:dot]
+				}
+				indexes[idx]++
+			}
+		}
+
+		if len(indexes) > 0 {
+			attrs[k] = strconv.Itoa(len(indexes))
+		} else {
+			delete(attrs, k)
+		}
+	}
+
+	return attrs
+}
+
 // helper/schema throws away timeout values from the config and stores them in
 // the Private/Meta fields. we need to copy those values into the planned state
 // so that core doesn't see a perpetual diff with the timeout block.
diff --git a/helper/plugin/grpc_provider_test.go b/helper/plugin/grpc_provider_test.go
index 03f059a0b4..a06185fc4c 100644
--- a/helper/plugin/grpc_provider_test.go
+++ b/helper/plugin/grpc_provider_test.go
@@ -3,6 +3,8 @@ package plugin
 import (
 	"context"
 	"fmt"
+	"reflect"
+	"strconv"
 	"strings"
 	"testing"
 	"time"
@@ -637,3 +639,34 @@ func TestGetSchemaTimeouts(t *testing.T) {
 		t.Fatal("missing default timeout in schema")
 	}
 }
+
+func TestNormalizeFlatmapContainers(t *testing.T) {
+	for i, tc := range []struct {
+		attrs  map[string]string
+		expect map[string]string
+	}{
+		{
+			attrs:  map[string]string{"id": "1", "multi.2.set.#": "1", "multi.1.set.#": "0", "single.#": "0"},
+			expect: map[string]string{"id": "1"},
+		},
+		{
+			attrs:  map[string]string{"id": "1", "multi.2.set.#": "2", "multi.2.set.1.foo": "bar", "multi.1.set.#": "0", "single.#": "0"},
+			expect: map[string]string{"id": "1", "multi.2.set.#": "1", "multi.2.set.1.foo": "bar"},
+		},
+		{
+			attrs:  map[string]string{"id": "78629a0f5f3f164f", "multi.#": "1"},
+			expect: map[string]string{"id": "78629a0f5f3f164f"},
+		},
+		{
+			attrs:  map[string]string{"multi.529860700.set.#": "1", "multi.#": "1", "id": "78629a0f5f3f164f"},
+			expect: map[string]string{"id": "78629a0f5f3f164f"},
+		},
+	} {
+		t.Run(strconv.Itoa(i), func(t *testing.T) {
+			got := normalizeFlatmapContainers(tc.attrs)
+			if !reflect.DeepEqual(tc.expect, got) {
+				t.Fatalf("expected:\n%#v\ngot:\n%#v\n", tc.expect, got)
+			}
+		})
+	}
+}
diff --git a/helper/resource/state_shim.go b/helper/resource/state_shim.go
index 9ad30d3ac9..9c698d16a4 100644
--- a/helper/resource/state_shim.go
+++ b/helper/resource/state_shim.go
@@ -71,7 +71,7 @@ func shimNewState(newState *states.State, schemas *terraform.Schemas) (*terrafor
 			}
 
 			if resSchema == nil {
-				return nil, fmt.Errorf("mising resource schema for %q in %q", resType, providerType)
+				return nil, fmt.Errorf("missing resource schema for %q in %q", resType, providerType)
 			}
 
 			for key, i := range res.Instances {
diff --git a/helper/schema/resource.go b/helper/schema/resource.go
index a26dfc9f88..d96bbcfde2 100644
--- a/helper/schema/resource.go
+++ b/helper/schema/resource.go
@@ -155,6 +155,27 @@ type Resource struct {
 	Timeouts *ResourceTimeout
 }
 
+// ShimInstanceStateFromValue converts a cty.Value to a
+// terraform.InstanceState.
+func (r *Resource) ShimInstanceStateFromValue(state cty.Value) (*terraform.InstanceState, error) {
+	// Get the raw shimmed value. While this is correct, the set hashes don't
+	// match those from the Schema.
+	s := terraform.NewInstanceStateShimmedFromValue(state, r.SchemaVersion)
+
+	// We now rebuild the state through the ResourceData, so that the set indexes
+	// match what helper/schema expects.
+	data, err := schemaMap(r.Schema).Data(s, nil)
+	if err != nil {
+		return nil, err
+	}
+
+	s = data.State()
+	if s == nil {
+		s = &terraform.InstanceState{}
+	}
+	return s, nil
+}
+
 // See Resource documentation.
 type CreateFunc func(*ResourceData, interface{}) error
 
@@ -550,8 +571,7 @@ func (r *Resource) upgradeState(s *terraform.InstanceState, meta interface{}) (*
 		return nil, err
 	}
 
-	s = InstanceStateFromStateValue(stateVal, r.SchemaVersion)
-	return s, nil
+	return r.ShimInstanceStateFromValue(stateVal)
 }
 
 // InternalValidate should be called to validate the structure
diff --git a/helper/schema/shims.go b/helper/schema/shims.go
index 52ae7d7446..d99fb39651 100644
--- a/helper/schema/shims.go
+++ b/helper/schema/shims.go
@@ -23,7 +23,10 @@ func DiffFromValues(prior, planned cty.Value, res *Resource) (*terraform.Instanc
 // only needs to be created for the apply operation, and any customizations
 // have already been done.
 func diffFromValues(prior, planned cty.Value, res *Resource, cust CustomizeDiffFunc) (*terraform.InstanceDiff, error) {
-	instanceState := InstanceStateFromStateValue(prior, res.SchemaVersion)
+	instanceState, err := res.ShimInstanceStateFromValue(prior)
+	if err != nil {
+		return nil, err
+	}
 
 	configSchema := res.CoreConfigSchema()
 
@@ -85,11 +88,3 @@ func JSONMapToStateValue(m map[string]interface{}, block *configschema.Block) (c
 func StateValueFromInstanceState(is *terraform.InstanceState, ty cty.Type) (cty.Value, error) {
 	return is.AttrsAsObjectValue(ty)
 }
-
-// InstanceStateFromStateValue converts a cty.Value to a
-// terraform.InstanceState. This function requires the schema version used by
-// the provider, because the legacy providers used the private Meta data in the
-// InstanceState to store the schema version.
-func InstanceStateFromStateValue(state cty.Value, schemaVersion int) *terraform.InstanceState {
-	return terraform.NewInstanceStateShimmedFromValue(state, schemaVersion)
-}
diff --git a/helper/schema/shims_test.go b/helper/schema/shims_test.go
index 68186497bc..072c8ca7cb 100644
--- a/helper/schema/shims_test.go
+++ b/helper/schema/shims_test.go
@@ -599,6 +599,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"availability_zone": "foo",
 				},
@@ -901,6 +902,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"delete": "false",
 				},
@@ -953,43 +955,6 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			Err: false,
 		},
 
-		/*
-			// disabled for shims
-			// there is no longer any "list promotion"
-			{
-				Name: "List decode with promotion",
-				Schema: map[string]*Schema{
-					"ports": &Schema{
-						Type:          TypeList,
-						Required:      true,
-						Elem:          &Schema{Type: TypeInt},
-						PromoteSingle: true,
-					},
-				},
-
-				State: nil,
-
-				Config: map[string]interface{}{
-					"ports": "5",
-				},
-
-				Diff: &terraform.InstanceDiff{
-					Attributes: map[string]*terraform.ResourceAttrDiff{
-						"ports.#": &terraform.ResourceAttrDiff{
-							Old: "0",
-							New: "1",
-						},
-						"ports.0": &terraform.ResourceAttrDiff{
-							Old: "",
-							New: "5",
-						},
-					},
-				},
-
-				Err: false,
-			},
-		*/
-
 		{
 			Name: "List decode with promotion with list",
 			Schema: map[string]*Schema{
@@ -1109,6 +1074,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"ports.#": "3",
 					"ports.0": "1",
@@ -1137,6 +1103,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"ports.#": "2",
 					"ports.0": "1",
@@ -1353,6 +1320,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"ports.#": "0",
 				},
@@ -1493,6 +1461,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"ports.#": "2",
 					"ports.1": "1",
@@ -1528,55 +1497,6 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			Err: false,
 		},
 
-		/*
-			// disabled for shims
-			// you can't remove a required attribute
-			{
-				Name: "Set-7",
-				Schema: map[string]*Schema{
-					"ports": &Schema{
-						Type:     TypeSet,
-						Required: true,
-						Elem:     &Schema{Type: TypeInt},
-						Set: func(a interface{}) int {
-							return a.(int)
-						},
-					},
-				},
-
-				State: &terraform.InstanceState{
-					Attributes: map[string]string{
-						"ports.#": "2",
-						"ports.1": "1",
-						"ports.2": "2",
-					},
-				},
-
-				Config: map[string]interface{}{},
-
-				Diff: &terraform.InstanceDiff{
-					Attributes: map[string]*terraform.ResourceAttrDiff{
-						"ports.#": &terraform.ResourceAttrDiff{
-							Old: "2",
-							New: "0",
-						},
-						"ports.1": &terraform.ResourceAttrDiff{
-							Old:        "1",
-							New:        "0",
-							NewRemoved: true,
-						},
-						"ports.2": &terraform.ResourceAttrDiff{
-							Old:        "2",
-							New:        "0",
-							NewRemoved: true,
-						},
-					},
-				},
-
-				Err: false,
-			},
-		*/
-
 		{
 			Name: "Set-8",
 			Schema: map[string]*Schema{
@@ -1592,6 +1512,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"availability_zone": "bar",
 					"ports.#":           "1",
@@ -1634,6 +1555,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"ingress.#":           "2",
 					"ingress.80.ports.#":  "1",
@@ -1718,6 +1640,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"availability_zone": "foo",
 					"port":              "80",
@@ -1734,7 +1657,42 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 		},
 
 		{
-			Name: "",
+			Name: "computed",
+			Schema: map[string]*Schema{
+				"availability_zone": &Schema{
+					Type:         TypeString,
+					Computed:     true,
+					ComputedWhen: []string{"port"},
+				},
+
+				"port": &Schema{
+					Type:     TypeInt,
+					Optional: true,
+				},
+			},
+
+			State: nil,
+
+			Config: map[string]interface{}{
+				"port": 80,
+			},
+
+			Diff: &terraform.InstanceDiff{
+				Attributes: map[string]*terraform.ResourceAttrDiff{
+					"availability_zone": &terraform.ResourceAttrDiff{
+						NewComputed: true,
+					},
+					"port": &terraform.ResourceAttrDiff{
+						New: "80",
+					},
+				},
+			},
+
+			Err: false,
+		},
+
+		{
+			Name: "computed, exists",
 			Schema: map[string]*Schema{
 				"availability_zone": &Schema{
 					Type:         TypeString,
@@ -1749,6 +1707,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"port": "80",
 				},
@@ -1758,13 +1717,8 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 				"port": 80,
 			},
 
-			Diff: &terraform.InstanceDiff{
-				Attributes: map[string]*terraform.ResourceAttrDiff{
-					"availability_zone": &terraform.ResourceAttrDiff{
-						NewComputed: true,
-					},
-				},
-			},
+			// there is no computed diff when the instance exists already
+			Diff: nil,
 
 			Err: false,
 		},
@@ -1811,6 +1765,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"config_vars.%":   "1",
 					"config_vars.foo": "bar",
@@ -1850,6 +1805,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"vars.%":   "1",
 					"vars.foo": "bar",
@@ -1889,6 +1845,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"vars.%":   "1",
 					"vars.foo": "bar",
@@ -1912,6 +1869,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"config_vars.#":     "1",
 					"config_vars.0.%":   "1",
@@ -1954,6 +1912,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"config_vars.#":     "1",
 					"config_vars.0.%":   "2",
@@ -2005,6 +1964,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"availability_zone": "bar",
 					"address":           "foo",
@@ -2049,6 +2009,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"availability_zone": "bar",
 					"ports.#":           "1",
@@ -2088,6 +2049,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"instances.#": "0",
 				},
@@ -2275,6 +2237,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"vars.%": "0",
 				},
@@ -2303,7 +2266,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 		},
 
 		{
-			Name:   " - Empty",
+			Name:   "Empty",
 			Schema: map[string]*Schema{},
 
 			State: &terraform.InstanceState{},
@@ -2324,6 +2287,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"some_threshold": "567.8",
 				},
@@ -2376,6 +2340,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"block_device.#": "2",
 					"block_device.616397234.delete_on_termination":  "true",
@@ -2410,6 +2375,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"port": "false",
 				},
@@ -2453,6 +2419,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"route.#": "0",
 				},
@@ -2476,6 +2443,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"active": "true",
 				},
@@ -2503,6 +2471,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"instances.#": "1",
 					"instances.3": "foo",
@@ -2615,6 +2584,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"metadata_keys.#": "0",
 				},
@@ -2675,6 +2645,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			Config: nil,
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"tags.%": "0",
 				},
@@ -2743,7 +2714,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 		},
 
 		{
-			Name: ": StateFunc in nested set (#1759)",
+			Name: "StateFunc in nested set (#1759)",
 			Schema: map[string]*Schema{
 				"service_account": &Schema{
 					Type:     TypeList,
@@ -2823,6 +2794,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"instances.#": "2",
 					"instances.3": "333",
@@ -2875,6 +2847,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"one":   "false",
 					"two":   "true",
@@ -2913,6 +2886,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			Schema: map[string]*Schema{},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"id": "someid",
 				},
@@ -2942,6 +2916,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"ports.#": "3",
 					"ports.1": "1",
@@ -2990,6 +2965,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"description": "foo",
 				},
@@ -3023,7 +2999,9 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 				},
 			},
 
-			State: &terraform.InstanceState{},
+			State: &terraform.InstanceState{
+				ID: "id",
+			},
 
 			Config: map[string]interface{}{
 				"foo": "${var.foo}",
@@ -3063,6 +3041,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"ports.#": "3",
 					"ports.1": "1",
@@ -3103,6 +3082,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"config.#": "2",
 					"config.0": "a",
@@ -3310,6 +3290,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"ports.#": "3",
 					"ports.1": "1",
@@ -3362,6 +3343,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			Schema: map[string]*Schema{},
 
 			State: &terraform.InstanceState{
+				ID: "someid",
 				Attributes: map[string]string{
 					"id": "someid",
 				},
@@ -3397,6 +3379,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"etag":       "foo",
 					"version_id": "1",
@@ -3442,6 +3425,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"foo": "bar",
 				},
@@ -3471,6 +3455,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"attr": "bar",
 				},
@@ -3508,6 +3493,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			},
 
 			State: &terraform.InstanceState{
+				ID: "id",
 				Attributes: map[string]string{
 					"unrelated_set.#":  "0",
 					"stream_enabled":   "true",
@@ -3549,11 +3535,10 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			}
 
 			{
-				d, err := InternalMap(tc.Schema).Diff(tc.State, terraform.NewResourceConfig(c), tc.CustomizeDiff, nil, false)
+				d, err := schemaMap(tc.Schema).Diff(tc.State, terraform.NewResourceConfig(c), tc.CustomizeDiff, nil, false)
 				if err != nil != tc.Err {
 					t.Fatalf("err: %s", err)
 				}
-
 				if !cmp.Equal(d, tc.Diff, equateEmpty) {
 					t.Fatal(cmp.Diff(d, tc.Diff, equateEmpty))
 				}
@@ -3597,6 +3582,7 @@ func TestShimSchemaMap_Diff(t *testing.T) {
 			}
 
 			res := &Resource{Schema: tc.Schema}
+
 			d, err := diffFromValues(stateVal, configVal, res, tc.CustomizeDiff)
 			if err != nil {
 				if !tc.Err {
diff --git a/terraform/diff.go b/terraform/diff.go
index 92b575086e..a28d7e4822 100644
--- a/terraform/diff.go
+++ b/terraform/diff.go
@@ -415,62 +415,278 @@ func (d *InstanceDiff) Unlock() { d.mu.Unlock() }
 // This method is intended for shimming old subsystems that still use this
 // legacy diff type to work with the new-style types.
 func (d *InstanceDiff) ApplyToValue(base cty.Value, schema *configschema.Block) (cty.Value, error) {
-	// We always build a new value here, even if the given diff is "empty",
-	// because we might be planning to create a new instance that happens
-	// to have no attributes set, and so we want to produce an empty object
-	// rather than just echoing back the null old value.
 
 	// Create an InstanceState attributes from our existing state.
 	// We can use this to more easily apply the diff changes.
 	attrs := hcl2shim.FlatmapValueFromHCL2(base)
+	applied, err := d.Apply(attrs, schema)
+	if err != nil {
+		return base, err
+	}
+
+	val, err := hcl2shim.HCL2ValueFromFlatmap(applied, schema.ImpliedType())
+	if err != nil {
+		return base, err
+	}
+
+	return schema.CoerceValue(val)
+}
+
+// Apply applies the diff to the provided flatmapped attributes,
+// returning the new instance attributes.
+//
+// This method is intended for shimming old subsystems that still use this
+// legacy diff type to work with the new-style types.
+func (d *InstanceDiff) Apply(attrs map[string]string, schema *configschema.Block) (map[string]string, error) {
+	// We always build a new value here, even if the given diff is "empty",
+	// because we might be planning to create a new instance that happens
+	// to have no attributes set, and so we want to produce an empty object
+	// rather than just echoing back the null old value.
 	if attrs == nil {
 		attrs = map[string]string{}
 	}
 
+	return d.applyDiff(attrs, schema)
+}
+
+func (d *InstanceDiff) applyDiff(attrs map[string]string, schema *configschema.Block) (map[string]string, error) {
+	// Rather applying the diff to mutate the attrs, we'll copy new values into
+	// here to avoid the possibility of leaving stale values.
+	result := map[string]string{}
+
 	if d.Destroy || d.DestroyDeposed || d.DestroyTainted {
-		// to mark a destroy, we remove all attributes
-		attrs = map[string]string{}
-	} else if attrs["id"] == "" || d.RequiresNew() {
-		// Since "id" is always computed, make sure it always has a value. Set
-		// it as unknown to generate the correct cty.Value
-		attrs["id"] = config.UnknownVariableValue
+		return result, nil
 	}
 
-	for attr, diff := range d.Attributes {
-		old, exists := attrs[attr]
+	// iterate over the schema rather than the attributes, so we can handle
+	// blocks separately from plain attributes
+	for name, attrSchema := range schema.Attributes {
+		var err error
+		var newAttrs map[string]string
 
-		if exists &&
-			old != diff.Old &&
-			// if new or old is unknown, then there's no mismatch
-			old != config.UnknownVariableValue &&
-			diff.Old != config.UnknownVariableValue {
-			return base, fmt.Errorf("diff apply conflict for %s: diff expects %q, but prior value has %q", attr, diff.Old, old)
+		// handle non-block collections
+		switch ty := attrSchema.Type; {
+		case ty.IsListType() || ty.IsTupleType() || ty.IsMapType():
+			newAttrs, err = d.applyCollectionDiff(name, attrs, attrSchema)
+		case ty.IsSetType():
+			newAttrs, err = d.applySetDiff(name, attrs, schema)
+		default:
+			newAttrs, err = d.applyAttrDiff(name, attrs, attrSchema)
+		}
+
+		if err != nil {
+			return result, err
+		}
+
+		for k, v := range newAttrs {
+			result[k] = v
+		}
+	}
+
+	for name, block := range schema.BlockTypes {
+		newAttrs, err := d.applySetDiff(name, attrs, &block.Block)
+		if err != nil {
+			return result, err
+		}
+
+		for k, v := range newAttrs {
+			result[k] = v
+		}
+	}
+
+	return result, nil
+}
+
+func (d *InstanceDiff) applyAttrDiff(attrName string, oldAttrs map[string]string, attrSchema *configschema.Attribute) (map[string]string, error) {
+	result := map[string]string{}
+
+	diff := d.Attributes[attrName]
+	old, exists := oldAttrs[attrName]
+
+	if diff != nil && diff.NewComputed {
+		result[attrName] = config.UnknownVariableValue
+		return result, nil
+	}
+
+	if attrName == "id" {
+		if old == "" {
+			result["id"] = config.UnknownVariableValue
+		} else {
+			result["id"] = old
+		}
+		return result, nil
+	}
+
+	// attribute diffs are sometimes missed, so assume no diff means keep the
+	// old value
+	if diff == nil {
+		if exists {
+			result[attrName] = old
+
+		} else {
+			// We need required values, so set those with an empty value. It
+			// must be set in the config, since if it were missing it would have
+			// failed validation.
+			if attrSchema.Required {
+				result[attrName] = ""
+			}
+		}
+		return result, nil
+	}
+
+	// check for missmatched diff values
+	if exists &&
+		old != diff.Old &&
+		old != config.UnknownVariableValue &&
+		diff.Old != config.UnknownVariableValue {
+		return result, fmt.Errorf("diff apply conflict for %s: diff expects %q, but prior value has %q", attrName, diff.Old, old)
+	}
+
+	if attrSchema.Computed && diff.NewComputed {
+		result[attrName] = config.UnknownVariableValue
+		return result, nil
+	}
+
+	if diff.NewRemoved {
+		// don't set anything in the new value
+		return result, nil
+	}
+
+	result[attrName] = diff.New
+	return result, nil
+}
+
+func (d *InstanceDiff) applyCollectionDiff(attrName string, oldAttrs map[string]string, attrSchema *configschema.Attribute) (map[string]string, error) {
+	result := map[string]string{}
+
+	// check the index first for special handling
+	for k, diff := range d.Attributes {
+		// check the index value, which can be set, and 0
+		if k == attrName+".#" || k == attrName+".%" {
+			if diff.NewRemoved {
+				return result, nil
+			}
+
+			if diff.NewComputed {
+				result[k] = config.UnknownVariableValue
+				return result, nil
+			}
+
+			// do what the diff tells us to here, so that it's consistent with applies
+			if diff.New == "0" {
+				result[k] = "0"
+				return result, nil
+			}
+		}
+	}
+
+	// collect all the keys from the diff and the old state
+	keys := map[string]bool{}
+	for k := range d.Attributes {
+		keys[k] = true
+	}
+	for k := range oldAttrs {
+		keys[k] = true
+	}
+
+	idx := attrName + ".#"
+	if attrSchema.Type.IsMapType() {
+		idx = attrName + ".%"
+	}
+
+	// record if we got the index from the diff
+	setIndex := false
+
+	for k := range keys {
+		if !strings.HasPrefix(k, attrName+".") {
+			continue
+		}
+
+		// we need to verify if we saw the index later
+		if k == idx {
+			setIndex = true
+		}
+
+		res, err := d.applyAttrDiff(k, oldAttrs, attrSchema)
+		if err != nil {
+			return result, err
+		}
+
+		for k, v := range res {
+			result[k] = v
+		}
+	}
+
+	// Verify we have the index count.
+	// If it wasn't added from a diff, check it from the previous value.
+	// Make sure we keep the count if it existed before, so we can tell if it
+	// existed, or was null.
+	if !setIndex {
+		old := oldAttrs[idx]
+		if old != "" {
+			result[idx] = old
+		}
+	}
+
+	return result, nil
+}
+
+func (d *InstanceDiff) applySetDiff(attrName string, oldAttrs map[string]string, block *configschema.Block) (map[string]string, error) {
+	result := map[string]string{}
+
+	idx := attrName + ".#"
+	// first find the index diff
+	for k, diff := range d.Attributes {
+		if k != idx {
+			continue
 		}
 
 		if diff.NewComputed {
-			attrs[attr] = config.UnknownVariableValue
+			result[k] = config.UnknownVariableValue
+			return result, nil
+		}
+	}
+
+	// Flag if there was a diff used in the set at all.
+	// If not, take the pre-existing set values
+	setDiff := false
+
+	// here we're trusting the diff to supply all the known items
+	for k, diff := range d.Attributes {
+		if !strings.HasPrefix(k, attrName+".") {
 			continue
 		}
 
+		setDiff = true
 		if diff.NewRemoved {
-			delete(attrs, attr)
+			// no longer in the set
 			continue
 		}
 
-		// sometimes helper/schema gives us values that aren't really a diff
-		if diff.Old == diff.New {
+		if diff.NewComputed {
+			result[k] = config.UnknownVariableValue
 			continue
 		}
 
-		attrs[attr] = diff.New
+		// helper/schema doesn't list old removed values, but since the set
+		// exists NewRemoved may not be true.
+		if diff.New == "" && diff.Old == "" {
+			continue
+		}
+
+		result[k] = diff.New
 	}
 
-	val, err := hcl2shim.HCL2ValueFromFlatmap(attrs, schema.ImpliedType())
-	if err != nil {
-		return val, err
+	// use the existing values if there was no set diff at all
+	if !setDiff {
+		for k, v := range oldAttrs {
+			if strings.HasPrefix(k, attrName+".") {
+				result[k] = v
+			}
+		}
 	}
 
-	return schema.CoerceValue(val)
+	return result, nil
 }
 
 // ResourceAttrDiff is the diff of a single attribute of a resource.