diff --git a/command/apply.go b/command/apply.go
index 859d0515f3..2a348f2cdf 100644
--- a/command/apply.go
+++ b/command/apply.go
@@ -8,6 +8,7 @@ import (
 	"sort"
 	"strings"
 
+	"github.com/hashicorp/terraform/config/module"
 	"github.com/hashicorp/terraform/terraform"
 )
 
@@ -35,6 +36,12 @@ func (c *ApplyCommand) Run(args []string) int {
 		return 1
 	}
 
+	pwd, err := os.Getwd()
+	if err != nil {
+		c.Ui.Error(fmt.Sprintf("Error getting pwd: %s", err))
+		return 1
+	}
+
 	var configPath string
 	args = cmdFlags.Args()
 	if len(args) > 1 {
@@ -44,11 +51,7 @@ func (c *ApplyCommand) Run(args []string) int {
 	} else if len(args) == 1 {
 		configPath = args[0]
 	} else {
-		var err error
-		configPath, err = os.Getwd()
-		if err != nil {
-			c.Ui.Error(fmt.Sprintf("Error getting pwd: %s", err))
-		}
+		configPath = pwd
 	}
 
 	// Prepare the extra hooks to count resources
@@ -67,6 +70,24 @@ func (c *ApplyCommand) Run(args []string) int {
 		backupPath = stateOutPath + DefaultBackupExtention
 	}
 
+	// Do a detect to determine if we need to do an init + apply.
+	if detected, err := module.Detect(configPath, pwd); err != nil {
+		c.Ui.Error(fmt.Sprintf(
+			"Invalid path: %s", err))
+		return 1
+	} else if !strings.HasPrefix(detected, "file") {
+		// If this isn't a file URL then we're doing an init +
+		// apply.
+		var init InitCommand
+		init.Meta = c.Meta
+		if code := init.Run([]string{detected}); code != 0 {
+			return code
+		}
+
+		// Change the config path to be the cwd
+		configPath = pwd
+	}
+
 	// Build the context based on the arguments given
 	ctx, planned, err := c.Context(contextOpts{
 		Path:      configPath,
diff --git a/command/apply_test.go b/command/apply_test.go
index f745016d2f..4423b3b2ec 100644
--- a/command/apply_test.go
+++ b/command/apply_test.go
@@ -3,6 +3,9 @@ package command
 import (
 	"fmt"
 	"io/ioutil"
+	"net"
+	"net/http"
+	"net/url"
 	"os"
 	"path/filepath"
 	"reflect"
@@ -196,6 +199,73 @@ func TestApply_error(t *testing.T) {
 	}
 }
 
+func TestApply_init(t *testing.T) {
+	// Change to the temporary directory
+	cwd, err := os.Getwd()
+	if err != nil {
+		t.Fatalf("err: %s", err)
+	}
+	dir := tempDir(t)
+	if err := os.MkdirAll(dir, 0755); err != nil {
+		t.Fatalf("err: %s", err)
+	}
+	if err := os.Chdir(dir); err != nil {
+		t.Fatalf("err: %s", err)
+	}
+	defer os.Chdir(cwd)
+
+	// Create the test fixtures
+	statePath := testTempFile(t)
+	ln := testHttpServer(t)
+	defer ln.Close()
+
+	// Initialize the command
+	p := testProvider()
+	ui := new(cli.MockUi)
+	c := &ApplyCommand{
+		Meta: Meta{
+			ContextOpts: testCtxConfig(p),
+			Ui:          ui,
+		},
+	}
+
+	// Build the URL to the init
+	var u url.URL
+	u.Scheme = "http"
+	u.Host = ln.Addr().String()
+	u.Path = "/header"
+
+	args := []string{
+		"-state", statePath,
+		u.String(),
+	}
+	if code := c.Run(args); code != 0 {
+		t.Fatalf("bad: %d\n\n%s", code, ui.ErrorWriter.String())
+	}
+
+	if _, err := os.Stat("hello.tf"); err != nil {
+		t.Fatalf("err: %s", err)
+	}
+
+	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_noArgs(t *testing.T) {
 	cwd, err := os.Getwd()
 	if err != nil {
@@ -942,6 +1012,31 @@ func TestApply_disableBackup(t *testing.T) {
 	}
 }
 
+func testHttpServer(t *testing.T) net.Listener {
+	ln, err := net.Listen("tcp", ":0")
+	if err != nil {
+		t.Fatalf("err: %s", err)
+	}
+
+	mux := http.NewServeMux()
+	mux.HandleFunc("/header", testHttpHandlerHeader)
+
+	var server http.Server
+	server.Handler = mux
+	go server.Serve(ln)
+
+	return ln
+}
+
+func testHttpHandlerHeader(w http.ResponseWriter, r *http.Request) {
+	var url url.URL
+	url.Scheme = "file"
+	url.Path = testFixturePath("init")
+
+	w.Header().Add("X-Terraform-Get", url.String())
+	w.WriteHeader(200)
+}
+
 const applyVarFile = `
 foo = "bar"
 `