diff --git a/command/format/diff.go b/command/format/diff.go
index d816e17f1..d88a80147 100644
--- a/command/format/diff.go
+++ b/command/format/diff.go
@@ -377,6 +377,9 @@ func (p *blockBodyDiffPrinter) writeNestedBlockDiffs(name string, blockS *config
 			var action plans.Action
 			var oldValue, newValue cty.Value
 			switch {
+			case !val.IsKnown():
+				action = plans.Update
+				newValue = val
 			case !old.HasElement(val).True():
 				action = plans.Create
 				oldValue = cty.NullVal(val.Type())
@@ -697,7 +700,7 @@ func (p *blockBodyDiffPrinter) writeValueDiff(old, new cty.Value, indent int, pa
 			for it := new.ElementIterator(); it.Next(); {
 				_, val := it.Element()
 				allVals = append(allVals, val)
-				if old.HasElement(val).False() {
+				if val.IsKnown() && old.HasElement(val).False() {
 					addedVals = append(addedVals, val)
 				}
 			}
@@ -726,6 +729,8 @@ func (p *blockBodyDiffPrinter) writeValueDiff(old, new cty.Value, indent int, pa
 
 				var action plans.Action
 				switch {
+				case !val.IsKnown():
+					action = plans.Update
 				case added.HasElement(val).True():
 					action = plans.Create
 				case removed.HasElement(val).True():
@@ -1062,7 +1067,7 @@ func ctyObjectSimilarity(old, new cty.Value) float64 {
 }
 
 func ctyEqualWithUnknown(old, new cty.Value) bool {
-	if !old.IsKnown() || !new.IsKnown() {
+	if !old.IsWhollyKnown() || !new.IsWhollyKnown() {
 		return false
 	}
 	return old.Equals(new).True()
diff --git a/command/format/diff_test.go b/command/format/diff_test.go
index 5fc4637dc..bc0a3ad82 100644
--- a/command/format/diff_test.go
+++ b/command/format/diff_test.go
@@ -720,6 +720,92 @@ func TestResourceChange_primitiveList(t *testing.T) {
       ~ id         = "i-02ae66f368e8518a9" -> (known after apply)
       + list_field = []
     }
+`,
+		},
+		"update to unknown element": {
+			Action: plans.Update,
+			Mode:   addrs.ManagedResourceMode,
+			Before: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-STATIC"),
+				"list_field": cty.ListVal([]cty.Value{
+					cty.StringVal("aaaa"),
+					cty.StringVal("bbbb"),
+					cty.StringVal("cccc"),
+				}),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.UnknownVal(cty.String),
+				"ami": cty.StringVal("ami-STATIC"),
+				"list_field": cty.ListVal([]cty.Value{
+					cty.StringVal("aaaa"),
+					cty.UnknownVal(cty.String),
+					cty.StringVal("cccc"),
+				}),
+			}),
+			Schema: &configschema.Block{
+				Attributes: map[string]*configschema.Attribute{
+					"id":         {Type: cty.String, Optional: true, Computed: true},
+					"ami":        {Type: cty.String, Optional: true},
+					"list_field": {Type: cty.List(cty.String), Optional: true},
+				},
+			},
+			RequiredReplace: cty.NewPathSet(),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
+        ami        = "ami-STATIC"
+      ~ id         = "i-02ae66f368e8518a9" -> (known after apply)
+      ~ list_field = [
+            "aaaa",
+          - "bbbb",
+          + (known after apply),
+            "cccc",
+        ]
+    }
+`,
+		},
+		"update - two new unknown elements": {
+			Action: plans.Update,
+			Mode:   addrs.ManagedResourceMode,
+			Before: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-STATIC"),
+				"list_field": cty.ListVal([]cty.Value{
+					cty.StringVal("aaaa"),
+					cty.StringVal("bbbb"),
+					cty.StringVal("cccc"),
+				}),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.UnknownVal(cty.String),
+				"ami": cty.StringVal("ami-STATIC"),
+				"list_field": cty.ListVal([]cty.Value{
+					cty.StringVal("aaaa"),
+					cty.UnknownVal(cty.String),
+					cty.UnknownVal(cty.String),
+					cty.StringVal("cccc"),
+				}),
+			}),
+			Schema: &configschema.Block{
+				Attributes: map[string]*configschema.Attribute{
+					"id":         {Type: cty.String, Optional: true, Computed: true},
+					"ami":        {Type: cty.String, Optional: true},
+					"list_field": {Type: cty.List(cty.String), Optional: true},
+				},
+			},
+			RequiredReplace: cty.NewPathSet(),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
+        ami        = "ami-STATIC"
+      ~ id         = "i-02ae66f368e8518a9" -> (known after apply)
+      ~ list_field = [
+            "aaaa",
+          - "bbbb",
+          + (known after apply),
+          + (known after apply),
+            "cccc",
+        ]
+    }
 `,
 		},
 	}
@@ -1002,6 +1088,80 @@ func TestResourceChange_primitiveSet(t *testing.T) {
       ~ id        = "i-02ae66f368e8518a9" -> (known after apply)
       + set_field = []
     }
+`,
+		},
+		"in-place update to unknown": {
+			Action: plans.Update,
+			Mode:   addrs.ManagedResourceMode,
+			Before: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-STATIC"),
+				"set_field": cty.SetVal([]cty.Value{
+					cty.StringVal("aaaa"),
+					cty.StringVal("bbbb"),
+				}),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":        cty.UnknownVal(cty.String),
+				"ami":       cty.StringVal("ami-STATIC"),
+				"set_field": cty.UnknownVal(cty.Set(cty.String)),
+			}),
+			Schema: &configschema.Block{
+				Attributes: map[string]*configschema.Attribute{
+					"id":        {Type: cty.String, Optional: true, Computed: true},
+					"ami":       {Type: cty.String, Optional: true},
+					"set_field": {Type: cty.Set(cty.String), Optional: true},
+				},
+			},
+			RequiredReplace: cty.NewPathSet(),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
+        ami       = "ami-STATIC"
+      ~ id        = "i-02ae66f368e8518a9" -> (known after apply)
+      ~ set_field = [
+          - "aaaa",
+          - "bbbb",
+        ] -> (known after apply)
+    }
+`,
+		},
+		"in-place update to unknown element": {
+			Action: plans.Update,
+			Mode:   addrs.ManagedResourceMode,
+			Before: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-STATIC"),
+				"set_field": cty.SetVal([]cty.Value{
+					cty.StringVal("aaaa"),
+					cty.StringVal("bbbb"),
+				}),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.UnknownVal(cty.String),
+				"ami": cty.StringVal("ami-STATIC"),
+				"set_field": cty.SetVal([]cty.Value{
+					cty.StringVal("aaaa"),
+					cty.UnknownVal(cty.String),
+				}),
+			}),
+			Schema: &configschema.Block{
+				Attributes: map[string]*configschema.Attribute{
+					"id":        {Type: cty.String, Optional: true, Computed: true},
+					"ami":       {Type: cty.String, Optional: true},
+					"set_field": {Type: cty.Set(cty.String), Optional: true},
+				},
+			},
+			RequiredReplace: cty.NewPathSet(),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
+        ami       = "ami-STATIC"
+      ~ id        = "i-02ae66f368e8518a9" -> (known after apply)
+      ~ set_field = [
+            "aaaa",
+          - "bbbb",
+          ~ (known after apply),
+        ]
+    }
 `,
 		},
 	}
@@ -1220,6 +1380,47 @@ func TestResourceChange_map(t *testing.T) {
       + id        = (known after apply)
       + map_field = {}
     }
+`,
+		},
+		"update to unknown element": {
+			Action: plans.Update,
+			Mode:   addrs.ManagedResourceMode,
+			Before: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.StringVal("i-02ae66f368e8518a9"),
+				"ami": cty.StringVal("ami-STATIC"),
+				"map_field": cty.MapVal(map[string]cty.Value{
+					"a": cty.StringVal("aaaa"),
+					"b": cty.StringVal("bbbb"),
+					"c": cty.StringVal("cccc"),
+				}),
+			}),
+			After: cty.ObjectVal(map[string]cty.Value{
+				"id":  cty.UnknownVal(cty.String),
+				"ami": cty.StringVal("ami-STATIC"),
+				"map_field": cty.MapVal(map[string]cty.Value{
+					"a": cty.StringVal("aaaa"),
+					"b": cty.UnknownVal(cty.String),
+					"c": cty.StringVal("cccc"),
+				}),
+			}),
+			Schema: &configschema.Block{
+				Attributes: map[string]*configschema.Attribute{
+					"id":        {Type: cty.String, Optional: true, Computed: true},
+					"ami":       {Type: cty.String, Optional: true},
+					"map_field": {Type: cty.Map(cty.String), Optional: true},
+				},
+			},
+			RequiredReplace: cty.NewPathSet(),
+			ExpectedOutput: `  # test_instance.example will be updated in-place
+  ~ resource "test_instance" "example" {
+        ami       = "ami-STATIC"
+      ~ id        = "i-02ae66f368e8518a9" -> (known after apply)
+      ~ map_field = {
+            "a" = "aaaa"
+          ~ "b" = "bbbb" -> (known after apply)
+            "c" = "cccc"
+        }
+    }
 `,
 		},
 	}