diff --git a/command/init.go b/command/init.go
index c2fab48112..4da1ea0494 100644
--- a/command/init.go
+++ b/command/init.go
@@ -213,7 +213,14 @@ func (c *InitCommand) getProviders(path string, state *terraform.State, upgrade
 		return err
 	}
 
-	available := c.providerPluginSet()
+	var available discovery.PluginMetaSet
+	if upgrade {
+		// If we're in upgrade mode, we ignore any auto-installed plugins
+		// in "available", causing us to reinstall and possibly upgrade them.
+		available = c.providerPluginManuallyInstalledSet()
+	} else {
+		available = c.providerPluginSet()
+	}
 	requirements := terraform.ModuleTreeDependencies(mod, state).AllPluginRequirements()
 	missing := c.missingPlugins(available, requirements)
 
@@ -253,6 +260,20 @@ func (c *InitCommand) getProviders(path string, state *terraform.State, upgrade
 		return err
 	}
 
+	if upgrade {
+		// Purge any auto-installed plugins that aren't being used.
+		purged, err := c.providerInstaller.PurgeUnused(chosen)
+		if err != nil {
+			// Failure to purge old plugins is not a fatal error
+			c.Ui.Warn(fmt.Sprintf("failed to purge unused plugins: %s", err))
+		}
+		if purged != nil {
+			for meta := range purged {
+				log.Printf("[DEBUG] Purged unused %s plugin %s", meta.Name, meta.Path)
+			}
+		}
+	}
+
 	// If any providers have "floating" versions (completely unconstrained)
 	// we'll suggest the user constrain with a pessimistic constraint to
 	// avoid implicitly adopting a later major release.
diff --git a/command/init_test.go b/command/init_test.go
index e5a548717f..c51e8a4a60 100644
--- a/command/init_test.go
+++ b/command/init_test.go
@@ -5,7 +5,9 @@ import (
 	"io/ioutil"
 	"os"
 	"path/filepath"
+	"reflect"
 	"runtime"
+	"sort"
 	"strings"
 	"testing"
 
@@ -492,6 +494,98 @@ func TestInit_getProvider(t *testing.T) {
 	}
 }
 
+func TestInit_getUpgradePlugins(t *testing.T) {
+	// Create a temporary working directory that is empty
+	td := tempDir(t)
+	copy.CopyDir(testFixturePath("init-get-providers"), td)
+	defer os.RemoveAll(td)
+	defer testChdir(t, td)()
+
+	ui := new(cli.MockUi)
+	m := Meta{
+		testingOverrides: metaOverridesForProvider(testProvider()),
+		Ui:               ui,
+	}
+
+	installer := &mockProviderInstaller{
+		Providers: map[string][]string{
+			// looking for an exact version
+			"exact": []string{"1.2.3"},
+			// config requires >= 2.3.3
+			"greater_than": []string{"2.3.4", "2.3.3", "2.3.0"},
+			// config specifies
+			"between": []string{"3.4.5", "2.3.4", "1.2.3"},
+		},
+
+		Dir: m.pluginDir(),
+	}
+
+	err := os.MkdirAll(m.pluginDir(), os.ModePerm)
+	if err != nil {
+		t.Fatal(err)
+	}
+	exactUnwanted := filepath.Join(m.pluginDir(), installer.FileName("exact", "0.0.1"))
+	err = ioutil.WriteFile(exactUnwanted, []byte{}, os.ModePerm)
+	if err != nil {
+		t.Fatal(err)
+	}
+	greaterThanUnwanted := filepath.Join(m.pluginDir(), installer.FileName("greater_than", "2.3.3"))
+	err = ioutil.WriteFile(greaterThanUnwanted, []byte{}, os.ModePerm)
+	if err != nil {
+		t.Fatal(err)
+	}
+	betweenOverride := installer.FileName("between", "2.3.4") // intentionally directly in cwd, and should override auto-install
+	err = ioutil.WriteFile(betweenOverride, []byte{}, os.ModePerm)
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	c := &InitCommand{
+		Meta:              m,
+		providerInstaller: installer,
+	}
+
+	args := []string{
+		"-upgrade=true",
+	}
+	if code := c.Run(args); code != 0 {
+		t.Fatalf("command did not complete successfully:\n%s", ui.ErrorWriter.String())
+	}
+
+	files, err := ioutil.ReadDir(m.pluginDir())
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	if !installer.PurgeUnusedCalled {
+		t.Errorf("init -upgrade didn't purge providers, but should have")
+	}
+
+	gotFilenames := make([]string, len(files))
+	for i, info := range files {
+		gotFilenames[i] = info.Name()
+	}
+	sort.Strings(gotFilenames)
+
+	wantFilenames := []string{
+		"lock.json",
+
+		// no "between" because the file in cwd overrides it
+
+		// The mock PurgeUnused doesn't actually purge anything, so the dir
+		// includes both our old and new versions.
+		"terraform-provider-exact_v0.0.1_x4",
+		"terraform-provider-exact_v1.2.3_x4",
+		"terraform-provider-greater_than_v2.3.3_x4",
+		"terraform-provider-greater_than_v2.3.4_x4",
+	}
+
+	if !reflect.DeepEqual(gotFilenames, wantFilenames) {
+		t.Errorf("wrong directory contents after upgrade\ngot:  %#v\nwant: %#v", gotFilenames, wantFilenames)
+	}
+
+}
+
 func TestInit_getProviderMissing(t *testing.T) {
 	// Create a temporary working directory that is empty
 	td := tempDir(t)