diff --git a/internal/command/test.go b/internal/command/test.go
index 462c036517..d8e821d446 100644
--- a/internal/command/test.go
+++ b/internal/command/test.go
@@ -535,7 +535,10 @@ func (runner *TestFileRunner) ExecuteTestRun(ctx context.Context, run *moduletes
 		return state, false
 	}
 
-	resetConfig, configDiags := config.TransformForTest(run.Config, file.Config)
+	evalCtx, ctxDiags := getEvalContextForTest(runner.States, config, runner.Suite.GlobalVariables)
+	run.Diagnostics = run.Diagnostics.Append(ctxDiags)
+
+	resetConfig, configDiags := config.TransformForTest(run.Config, file.Config, evalCtx)
 	defer resetConfig()
 
 	run.Diagnostics = run.Diagnostics.Append(configDiags)
@@ -1034,7 +1037,10 @@ func (runner *TestFileRunner) Cleanup(ctx context.Context, file *moduletest.File
 			runConfig = state.Run.Config.ConfigUnderTest
 		}
 
-		reset, configDiags := runConfig.TransformForTest(state.Run.Config, file.Config)
+		evalCtx, ctxDiags := getEvalContextForTest(runner.States, runConfig, runner.Suite.GlobalVariables)
+		diags = diags.Append(ctxDiags)
+
+		reset, configDiags := runConfig.TransformForTest(state.Run.Config, file.Config, evalCtx)
 		diags = diags.Append(configDiags)
 
 		updated := state.State
diff --git a/internal/configs/config.go b/internal/configs/config.go
index a18bce49fc..3b1c7af711 100644
--- a/internal/configs/config.go
+++ b/internal/configs/config.go
@@ -884,6 +884,8 @@ func (c *Config) CheckCoreVersionRequirements() hcl.Diagnostics {
 	return diags
 }
 
+type configTransform func(*TestRun, *TestFile) (func(), hcl.Diagnostics)
+
 // TransformForTest prepares the config to execute the given test.
 //
 // This function directly edits the config that is to be tested, and returns a
@@ -891,15 +893,16 @@ func (c *Config) CheckCoreVersionRequirements() hcl.Diagnostics {
 //
 // Tests will call this before they execute, and then call the deferred function
 // to reset the config before the next test.
-func (c *Config) TransformForTest(run *TestRun, file *TestFile) (func(), hcl.Diagnostics) {
+func (c *Config) TransformForTest(run *TestRun, file *TestFile, evalCtx *hcl.EvalContext) (func(), hcl.Diagnostics) {
 	var diags hcl.Diagnostics
 
 	// These transformation functions must be in sync of what is being transformed,
 	// currently all the functions operate on different fields of configuration.
-	transformFuncs := []func(*TestRun, *TestFile) (func(), hcl.Diagnostics){
+	transformFuncs := []configTransform{
 		c.transformProviderConfigsForTest,
 		c.transformOverriddenResourcesForTest,
 		c.transformOverriddenModulesForTest,
+		c.getTransformAddVariablesForTest(evalCtx),
 	}
 
 	var resetFuncs []func()
@@ -1086,6 +1089,43 @@ func (c *Config) transformOverriddenResourcesForTest(run *TestRun, file *TestFil
 	}, diags
 }
 
+// getTransformAddVariablesForTest takes in evalCtx and gets a transformer function back.
+// The transformer adds variables from test file to the config. Needed to allow provider block to access variables defined in the test file.
+func (c *Config) getTransformAddVariablesForTest(evalCtx *hcl.EvalContext) configTransform {
+	return func(run *TestRun, file *TestFile) (func(), hcl.Diagnostics) {
+		var diags hcl.Diagnostics
+		oldVars := make(map[string]*Variable, len(c.Module.Variables))
+		newVars := make(map[string]*Variable, len(c.Module.Variables)+len(file.Variables))
+		for k, v := range c.Module.Variables {
+			oldVars[k] = v
+		}
+		for variableName, variableExpr := range file.Variables {
+			// Skip if variable already exists in the config.
+			if v, ok := oldVars[variableName]; ok {
+				newVars[variableName] = v
+				continue
+			}
+
+			value, diag := variableExpr.Value(evalCtx)
+			diags = append(diags, diag...)
+			if diags.HasErrors() {
+				return nil, diags
+			}
+			newVars[variableName] = &Variable{
+				Name:           variableName,
+				Type:           value.Type(),
+				ConstraintType: value.Type(),
+				DeclRange:      variableExpr.Range(),
+			}
+		}
+
+		c.Module.Variables = newVars
+		return func() {
+			c.Module.Variables = oldVars
+		}, nil
+	}
+}
+
 func (c *Config) transformOverriddenModulesForTest(run *TestRun, file *TestFile) (func(), hcl.Diagnostics) {
 	modules, diags := mergeOverriddenModules(run.OverrideModules, file.OverrideModules)
 
diff --git a/internal/configs/config_test.go b/internal/configs/config_test.go
index a9d02d48e3..860c34ce1a 100644
--- a/internal/configs/config_test.go
+++ b/internal/configs/config_test.go
@@ -916,7 +916,8 @@ func TestTransformForTest(t *testing.T) {
 				Providers: tc.runProviders,
 			}
 
-			reset, diags := config.TransformForTest(run, file)
+			evalCtx := &hcl.EvalContext{}
+			reset, diags := config.TransformForTest(run, file, evalCtx)
 
 			var actualErrs []string
 			for _, err := range diags.Errs() {