diff --git a/builtin/providers/terraform/data_source_state.go b/builtin/providers/terraform/data_source_state.go
index d8c97ebd52..c87da01fba 100644
--- a/builtin/providers/terraform/data_source_state.go
+++ b/builtin/providers/terraform/data_source_state.go
@@ -55,7 +55,14 @@ func dataSourceRemoteStateRead(d *schema.ResourceData, meta interface{}) error {
 	d.SetId(time.Now().UTC().String())
 
 	outputMap := make(map[string]interface{})
-	for key, val := range state.State().RootModule().Outputs {
+
+	remoteState := state.State()
+	if remoteState.Empty() {
+		log.Println("[DEBUG] empty remote state")
+		return nil
+	}
+
+	for key, val := range remoteState.RootModule().Outputs {
 		outputMap[key] = val.Value
 	}
 
diff --git a/state/remote/remote_test.go b/state/remote/remote_test.go
index 16afccdf19..db3c795c80 100644
--- a/state/remote/remote_test.go
+++ b/state/remote/remote_test.go
@@ -2,6 +2,8 @@ package remote
 
 import (
 	"bytes"
+	"io/ioutil"
+	"os"
 	"testing"
 
 	"github.com/hashicorp/terraform/state"
@@ -46,8 +48,8 @@ func TestRemoteClient_noPayload(t *testing.T) {
 	s := &State{
 		Client: nilClient{},
 	}
-	if err := s.RefreshState(); err != ErrRemoteStateNotFound {
-		t.Fatal("expected ErrRemoteStateNotFound, got", err)
+	if err := s.RefreshState(); err != nil {
+		t.Fatal("error refreshing empty remote state")
 	}
 }
 
@@ -59,3 +61,75 @@ func (nilClient) Get() (*Payload, error) { return nil, nil }
 func (c nilClient) Put([]byte) error { return nil }
 
 func (c nilClient) Delete() error { return nil }
+
+// ensure that remote state can be properly initialized
+func TestRemoteClient_stateInit(t *testing.T) {
+	localStateFile, err := ioutil.TempFile("", "tf")
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	// we need to remove the temp files so we recognize there's no local or
+	// remote state.
+	localStateFile.Close()
+	os.Remove(localStateFile.Name())
+	defer os.Remove(localStateFile.Name())
+
+	remoteStateFile, err := ioutil.TempFile("", "tf")
+	if err != nil {
+		t.Fatal(err)
+	}
+	remoteStateFile.Close()
+	os.Remove(remoteStateFile.Name())
+	defer os.Remove(remoteStateFile.Name())
+
+	// Now we need an empty state to initialize the state files.
+	newState := terraform.NewState()
+	newState.Remote = &terraform.RemoteState{
+		Type:   "_local",
+		Config: map[string]string{"path": remoteStateFile.Name()},
+	}
+
+	remoteClient := &FileClient{
+		Path: remoteStateFile.Name(),
+	}
+
+	cache := &state.CacheState{
+		Cache: &state.LocalState{
+			Path: localStateFile.Name(),
+		},
+		Durable: &State{
+			Client: remoteClient,
+		},
+	}
+
+	// This will write the local state file, and set the state field in the CacheState
+	err = cache.WriteState(newState)
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	// This will persist the local state we just wrote to the remote state file
+	err = cache.PersistState()
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	// now compare the two state files just to be sure
+	localData, err := ioutil.ReadFile(localStateFile.Name())
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	remoteData, err := ioutil.ReadFile(remoteStateFile.Name())
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	if !bytes.Equal(localData, remoteData) {
+		t.Log("state files don't match")
+		t.Log("Local:\n", string(localData))
+		t.Log("Remote:\n", string(remoteData))
+		t.Fatal("failed to initialize remote state")
+	}
+}
diff --git a/state/remote/state.go b/state/remote/state.go
index 5f45129d63..18427f3410 100644
--- a/state/remote/state.go
+++ b/state/remote/state.go
@@ -2,13 +2,10 @@ package remote
 
 import (
 	"bytes"
-	"errors"
 
 	"github.com/hashicorp/terraform/terraform"
 )
 
-var ErrRemoteStateNotFound = errors.New("no remote state found")
-
 // State implements the State interfaces in the state package to handle
 // reading and writing the remote state. This State on its own does no
 // local caching so every persist will go to the remote storage and local
@@ -37,8 +34,9 @@ func (s *State) RefreshState() error {
 		return err
 	}
 
+	// no remote state is OK
 	if payload == nil {
-		return ErrRemoteStateNotFound
+		return nil
 	}
 
 	state, err := terraform.ReadState(bytes.NewReader(payload.Data))