diff --git a/terraform/context_apply_test.go b/terraform/context_apply_test.go
index c389812c1..0be3375bb 100644
--- a/terraform/context_apply_test.go
+++ b/terraform/context_apply_test.go
@@ -10602,3 +10602,148 @@ func TestContext2Apply_invalidIndexRef(t *testing.T) {
 		t.Fatalf("missing expected error\ngot: %s\n\nwant: error containing %q", gotErr, wantErr)
 	}
 }
+
+func TestContext2Apply_moduleReplaceCycle(t *testing.T) {
+	for _, mode := range []string{"normal", "cbd"} {
+		var m *configs.Config
+
+		switch mode {
+		case "normal":
+			m = testModule(t, "apply-module-replace-cycle")
+		case "cbd":
+			m = testModule(t, "apply-module-replace-cycle-cbd")
+		}
+
+		p := testProvider("aws")
+		p.DiffFn = testDiffFn
+		p.ApplyFn = testApplyFn
+
+		instanceSchema := &configschema.Block{
+			Attributes: map[string]*configschema.Attribute{
+				"id":          {Type: cty.String, Computed: true},
+				"require_new": {Type: cty.String, Optional: true},
+			},
+		}
+
+		p.GetSchemaReturn = &ProviderSchema{
+			ResourceTypes: map[string]*configschema.Block{
+				"aws_instance": instanceSchema,
+			},
+		}
+
+		state := states.NewState()
+		modA := state.EnsureModule(addrs.RootModuleInstance.Child("a", addrs.NoKey))
+		modA.SetResourceInstanceCurrent(
+			addrs.Resource{
+				Mode: addrs.ManagedResourceMode,
+				Type: "aws_instance",
+				Name: "a",
+			}.Instance(addrs.NoKey),
+			&states.ResourceInstanceObjectSrc{
+				Status:    states.ObjectReady,
+				AttrsJSON: []byte(`{"id":"a","require_new":"old"}`),
+			},
+			addrs.ProviderConfig{
+				Type: "aws",
+			}.Absolute(addrs.RootModuleInstance),
+		)
+
+		modB := state.EnsureModule(addrs.RootModuleInstance.Child("b", addrs.NoKey))
+		modB.SetResourceInstanceCurrent(
+			addrs.Resource{
+				Mode: addrs.ManagedResourceMode,
+				Type: "aws_instance",
+				Name: "b",
+			}.Instance(addrs.IntKey(0)),
+			&states.ResourceInstanceObjectSrc{
+				Status:    states.ObjectReady,
+				AttrsJSON: []byte(`{"id":"b","require_new":"old"}`),
+			},
+			addrs.ProviderConfig{
+				Type: "aws",
+			}.Absolute(addrs.RootModuleInstance),
+		)
+
+		aBefore, _ := plans.NewDynamicValue(
+			cty.ObjectVal(map[string]cty.Value{
+				"id":          cty.StringVal("a"),
+				"require_new": cty.StringVal("old"),
+			}), instanceSchema.ImpliedType())
+		aAfter, _ := plans.NewDynamicValue(
+			cty.ObjectVal(map[string]cty.Value{
+				"id":          cty.UnknownVal(cty.String),
+				"require_new": cty.StringVal("new"),
+			}), instanceSchema.ImpliedType())
+		bBefore, _ := plans.NewDynamicValue(
+			cty.ObjectVal(map[string]cty.Value{
+				"id":          cty.StringVal("b"),
+				"require_new": cty.StringVal("old"),
+			}), instanceSchema.ImpliedType())
+		bAfter, _ := plans.NewDynamicValue(
+			cty.ObjectVal(map[string]cty.Value{
+				"id":          cty.UnknownVal(cty.String),
+				"require_new": cty.UnknownVal(cty.String),
+			}), instanceSchema.ImpliedType())
+
+		var aAction plans.Action
+		switch mode {
+		case "normal":
+			aAction = plans.DeleteThenCreate
+		case "cbd":
+			aAction = plans.CreateThenDelete
+		}
+
+		changes := &plans.Changes{
+			Resources: []*plans.ResourceInstanceChangeSrc{
+				{
+					Addr: addrs.Resource{
+						Mode: addrs.ManagedResourceMode,
+						Type: "aws_instance",
+						Name: "a",
+					}.Instance(addrs.NoKey).Absolute(addrs.RootModuleInstance.Child("a", addrs.NoKey)),
+					ProviderAddr: addrs.ProviderConfig{
+						Type: "aws",
+					}.Absolute(addrs.RootModuleInstance),
+					ChangeSrc: plans.ChangeSrc{
+						Action: aAction,
+						Before: aBefore,
+						After:  aAfter,
+					},
+				},
+				{
+					Addr: addrs.Resource{
+						Mode: addrs.ManagedResourceMode,
+						Type: "aws_instance",
+						Name: "b",
+					}.Instance(addrs.IntKey(0)).Absolute(addrs.RootModuleInstance.Child("b", addrs.NoKey)),
+					ProviderAddr: addrs.ProviderConfig{
+						Type: "aws",
+					}.Absolute(addrs.RootModuleInstance),
+					ChangeSrc: plans.ChangeSrc{
+						Action: plans.DeleteThenCreate,
+						Before: bBefore,
+						After:  bAfter,
+					},
+				},
+			},
+		}
+
+		ctx := testContext2(t, &ContextOpts{
+			Config: m,
+			ProviderResolver: providers.ResolverFixed(
+				map[string]providers.Factory{
+					"aws": testProviderFuncFixed(p),
+				},
+			),
+			State:   state,
+			Changes: changes,
+		})
+
+		t.Run(mode, func(t *testing.T) {
+			_, diags := ctx.Apply()
+			if diags.HasErrors() {
+				t.Fatal(diags.Err())
+			}
+		})
+	}
+}
diff --git a/terraform/testdata/apply-module-replace-cycle-cbd/main.tf b/terraform/testdata/apply-module-replace-cycle-cbd/main.tf
new file mode 100644
index 000000000..6393231d6
--- /dev/null
+++ b/terraform/testdata/apply-module-replace-cycle-cbd/main.tf
@@ -0,0 +1,8 @@
+module "a" {
+  source = "./mod1"
+}
+
+module "b" {
+  source = "./mod2"
+  ids = module.a.ids
+}
diff --git a/terraform/testdata/apply-module-replace-cycle-cbd/mod1/main.tf b/terraform/testdata/apply-module-replace-cycle-cbd/mod1/main.tf
new file mode 100644
index 000000000..2ade442bf
--- /dev/null
+++ b/terraform/testdata/apply-module-replace-cycle-cbd/mod1/main.tf
@@ -0,0 +1,10 @@
+resource "aws_instance" "a" {
+  require_new = "new"
+  lifecycle {
+    create_before_destroy = true
+  }
+}
+
+output "ids" {
+  value = [aws_instance.a.id]
+}
diff --git a/terraform/testdata/apply-module-replace-cycle-cbd/mod2/main.tf b/terraform/testdata/apply-module-replace-cycle-cbd/mod2/main.tf
new file mode 100644
index 000000000..83fb1dcd4
--- /dev/null
+++ b/terraform/testdata/apply-module-replace-cycle-cbd/mod2/main.tf
@@ -0,0 +1,8 @@
+resource "aws_instance" "b" {
+  count    = length(var.ids)
+  require_new = var.ids[count.index]
+}
+
+variable "ids" {
+  type = list(string)
+}
diff --git a/terraform/testdata/apply-module-replace-cycle/main.tf b/terraform/testdata/apply-module-replace-cycle/main.tf
new file mode 100644
index 000000000..6393231d6
--- /dev/null
+++ b/terraform/testdata/apply-module-replace-cycle/main.tf
@@ -0,0 +1,8 @@
+module "a" {
+  source = "./mod1"
+}
+
+module "b" {
+  source = "./mod2"
+  ids = module.a.ids
+}
diff --git a/terraform/testdata/apply-module-replace-cycle/mod1/main.tf b/terraform/testdata/apply-module-replace-cycle/mod1/main.tf
new file mode 100644
index 000000000..2ade442bf
--- /dev/null
+++ b/terraform/testdata/apply-module-replace-cycle/mod1/main.tf
@@ -0,0 +1,10 @@
+resource "aws_instance" "a" {
+  require_new = "new"
+  lifecycle {
+    create_before_destroy = true
+  }
+}
+
+output "ids" {
+  value = [aws_instance.a.id]
+}
diff --git a/terraform/testdata/apply-module-replace-cycle/mod2/main.tf b/terraform/testdata/apply-module-replace-cycle/mod2/main.tf
new file mode 100644
index 000000000..83fb1dcd4
--- /dev/null
+++ b/terraform/testdata/apply-module-replace-cycle/mod2/main.tf
@@ -0,0 +1,8 @@
+resource "aws_instance" "b" {
+  count    = length(var.ids)
+  require_new = var.ids[count.index]
+}
+
+variable "ids" {
+  type = list(string)
+}