diff --git a/terraform/test-fixtures/vars-basic-bool/main.tf b/terraform/test-fixtures/vars-basic-bool/main.tf
new file mode 100644
index 000000000..52d90595a
--- /dev/null
+++ b/terraform/test-fixtures/vars-basic-bool/main.tf
@@ -0,0 +1,10 @@
+// At the time of writing Terraform doesn't formally support a boolean
+// type, but historically this has magically worked. Lots of TF code
+// relies on this so we test it now.
+variable "a" {
+    default = true
+}
+
+variable "b" {
+    default = false
+}
diff --git a/terraform/variables.go b/terraform/variables.go
index 95b607fd5..186885222 100644
--- a/terraform/variables.go
+++ b/terraform/variables.go
@@ -7,6 +7,7 @@ import (
 
 	"github.com/hashicorp/terraform/config"
 	"github.com/hashicorp/terraform/config/module"
+	"github.com/hashicorp/terraform/helper/hilmapstructure"
 )
 
 // Variables returns the fully loaded set of variables to use with
@@ -104,10 +105,24 @@ func Variables(
 			}
 
 			switch schema.Type() {
+			case config.VariableTypeList:
+				result[k] = v
 			case config.VariableTypeMap:
 				varSetMap(result, k, v)
+			case config.VariableTypeString:
+				var strVal string
+				if err := hilmapstructure.WeakDecode(v, &strVal); err != nil {
+					return nil, fmt.Errorf(
+						"Error converting %s value to type string: %s",
+						k, err)
+				}
+
+				result[k] = strVal
 			default:
-				result[k] = v
+				panic(fmt.Sprintf(
+					"Unhandled var type: %T\n\n"+
+						"THIS IS A BUG. Please report it.",
+					schema.Type()))
 			}
 		}
 	}
diff --git a/terraform/variables_test.go b/terraform/variables_test.go
index f620fc5c2..2a97f4edb 100644
--- a/terraform/variables_test.go
+++ b/terraform/variables_test.go
@@ -83,15 +83,64 @@ func TestVariables(t *testing.T) {
 				},
 			},
 		},
+
+		"bools: config only": {
+			"vars-basic-bool",
+			nil,
+			nil,
+			false,
+			map[string]interface{}{
+				"a": "1",
+				"b": "0",
+			},
+		},
+
+		"bools: override with string": {
+			"vars-basic-bool",
+			nil,
+			map[string]interface{}{
+				"a": "foo",
+				"b": "bar",
+			},
+			false,
+			map[string]interface{}{
+				"a": "foo",
+				"b": "bar",
+			},
+		},
+
+		"bools: override with env": {
+			"vars-basic-bool",
+			map[string]string{
+				"TF_VAR_a": "false",
+				"TF_VAR_b": "true",
+			},
+			nil,
+			false,
+			map[string]interface{}{
+				"a": "false",
+				"b": "true",
+			},
+		},
+
+		"bools: override with bool": {
+			"vars-basic-bool",
+			nil,
+			map[string]interface{}{
+				"a": false,
+				"b": true,
+			},
+			false,
+			map[string]interface{}{
+				"a": "0",
+				"b": "1",
+			},
+		},
 	}
 
 	for name, tc := range cases {
-		if name != "override partial map" {
-			continue
-		}
-
 		// Wrapped in a func so we can get defers to work
-		func() {
+		t.Run(name, func(t *testing.T) {
 			// Set the env vars
 			for k, v := range tc.Env {
 				defer tempEnv(t, k, v)()
@@ -107,8 +156,8 @@ func TestVariables(t *testing.T) {
 			}
 
 			if !reflect.DeepEqual(actual, tc.Expected) {
-				t.Fatalf("%s: expected: %#v\n\ngot: %#v", name, tc.Expected, actual)
+				t.Fatalf("%s\n\nexpected: %#v\n\ngot: %#v", name, tc.Expected, actual)
 			}
-		}()
+		})
 	}
 }
diff --git a/website/source/docs/configuration/variables.html.md b/website/source/docs/configuration/variables.html.md
index 4e3a68f07..31b3b6918 100644
--- a/website/source/docs/configuration/variables.html.md
+++ b/website/source/docs/configuration/variables.html.md
@@ -159,6 +159,53 @@ VALUE
 }
 ```
 
+### Booleans
+
+Although it appears Terraform supports boolean types, they are instead
+silently converted to string types. The implications of this are subtle and
+should be completely understood if you plan on using boolean values.
+
+It is instead recommended you avoid using boolean values for now and use
+explicit strings. A future version of Terraform will properly support
+booleans and using the current behavior could result in backwards-incompatibilities
+in the future.
+
+For a configuration such as the following:
+
+```
+variable "active" {
+    default = false
+}
+```
+
+The false is converted to a string `"0"` when running Terraform.
+
+Then, depending on where you specify overrides, the behavior can differ:
+
+  * Variables with boolean values in a `tfvars` file will likewise be
+    converted to "0" and "1" values.
+
+  * Variables specified via the `-var` command line flag will be literal
+    strings "true" and "false", so care should be taken to explicitly use
+    "0" or "1".
+
+  * Variables specified with the `TF_VAR_` environment variables will
+    be literal string values, just like `-var`.
+
+A future version of Terraform will fully support first-class boolean
+types which will make the behavior of booleans consistent as you would
+expect. This may break some of the above behavior.
+
+When passing boolean-like variables as parameters to resource configurations
+that expect boolean values, they are converted consistently:
+
+  * "1", "true", "t" all become `true`
+  * "0", "false", "f" all become `false`
+
+The behavior of conversion above will likely not change in future
+Terraform versions. Therefore, simply using string values rather than
+booleans for variables is recommended.
+
 ## Environment Variables
 
 Environment variables can be used to set the value of a variable.