diff --git a/terraform/state.go b/terraform/state.go
index 90b8d4dbc..472fac0d5 100644
--- a/terraform/state.go
+++ b/terraform/state.go
@@ -108,6 +108,10 @@ func (s *State) Children(path []string) []*ModuleState {
 func (s *State) children(path []string) []*ModuleState {
 	result := make([]*ModuleState, 0)
 	for _, m := range s.Modules {
+		if m == nil {
+			continue
+		}
+
 		if len(m.Path) != len(path)+1 {
 			continue
 		}
@@ -161,6 +165,9 @@ func (s *State) ModuleByPath(path []string) *ModuleState {
 
 func (s *State) moduleByPath(path []string) *ModuleState {
 	for _, mod := range s.Modules {
+		if mod == nil {
+			continue
+		}
 		if mod.Path == nil {
 			panic("missing module path")
 		}
@@ -213,6 +220,10 @@ func (s *State) moduleOrphans(path []string, c *config.Config) [][]string {
 
 	// Find the orphans that are nested...
 	for _, m := range s.Modules {
+		if m == nil {
+			continue
+		}
+
 		// We only want modules that are at least grandchildren
 		if len(m.Path) < len(path)+2 {
 			continue
@@ -328,6 +339,10 @@ func (s *State) Validate() error {
 	{
 		found := make(map[string]struct{})
 		for _, ms := range s.Modules {
+			if ms == nil {
+				continue
+			}
+
 			key := strings.Join(ms.Path, ".")
 			if _, ok := found[key]; ok {
 				result = multierror.Append(result, fmt.Errorf(
@@ -644,12 +659,10 @@ func (s *State) init() {
 	}
 	s.ensureHasLineage()
 
-	// We can't trust that state read from a file doesn't have nil/empty
-	// modules
-	s.prune()
-
 	for _, mod := range s.Modules {
-		mod.init()
+		if mod != nil {
+			mod.init()
+		}
 	}
 
 	if s.Remote != nil {
@@ -726,7 +739,9 @@ func (s *State) sort() {
 
 	// Allow modules to be sorted
 	for _, m := range s.Modules {
-		m.sort()
+		if m != nil {
+			m.sort()
+		}
 	}
 }
 
@@ -1810,6 +1825,10 @@ func ReadState(src io.Reader) (*State, error) {
 		panic("resulting state in load not set, assertion failed")
 	}
 
+	// Prune the state when read it. Its possible to write unpruned states or
+	// for a user to make a state unpruned (nil-ing a module state for example).
+	result.prune()
+
 	// Validate the state file is valid
 	if err := result.Validate(); err != nil {
 		return nil, err
@@ -1968,6 +1987,11 @@ func (s moduleStateSort) Less(i, j int) bool {
 	a := s[i]
 	b := s[j]
 
+	// If either is nil, then the nil one is "less" than
+	if a == nil || b == nil {
+		return a == nil
+	}
+
 	// If the lengths are different, then the shorter one always wins
 	if len(a.Path) != len(b.Path) {
 		return len(a.Path) < len(b.Path)
diff --git a/terraform/state_test.go b/terraform/state_test.go
index f66c2b324..507c0c4a7 100644
--- a/terraform/state_test.go
+++ b/terraform/state_test.go
@@ -1695,16 +1695,34 @@ func TestStateModuleOrphans_empty(t *testing.T) {
 
 	// just calling this to check for panic
 	state.ModuleOrphans(RootModulePath, nil)
+}
 
-	for _, mod := range state.Modules {
-		if mod == nil {
-			t.Fatal("found nil module")
-		}
-		if mod.Path == nil {
-			t.Fatal("found nil module path")
-		}
-		if len(mod.Path) == 0 {
-			t.Fatal("found empty module path")
-		}
+func TestReadState_prune(t *testing.T) {
+	state := &State{
+		Modules: []*ModuleState{
+			&ModuleState{Path: rootModulePath},
+			nil,
+		},
+	}
+	state.init()
+
+	buf := new(bytes.Buffer)
+	if err := WriteState(state, buf); err != nil {
+		t.Fatalf("err: %s", err)
+	}
+
+	actual, err := ReadState(buf)
+	if err != nil {
+		t.Fatalf("err: %s", err)
+	}
+
+	expected := &State{
+		Version: state.Version,
+		Lineage: state.Lineage,
+	}
+	expected.init()
+
+	if !reflect.DeepEqual(actual, expected) {
+		t.Fatalf("got:\n%#v", actual)
 	}
 }
diff --git a/terraform/transform_orphan_resource.go b/terraform/transform_orphan_resource.go
index 11721462e..e42d3c849 100644
--- a/terraform/transform_orphan_resource.go
+++ b/terraform/transform_orphan_resource.go
@@ -42,6 +42,10 @@ func (t *OrphanResourceTransformer) Transform(g *Graph) error {
 }
 
 func (t *OrphanResourceTransformer) transform(g *Graph, ms *ModuleState) error {
+	if ms == nil {
+		return nil
+	}
+
 	// Get the configuration for this path. The configuration might be
 	// nil if the module was removed from the configuration. This is okay,
 	// this just means that every resource is an orphan.
diff --git a/terraform/transform_orphan_resource_test.go b/terraform/transform_orphan_resource_test.go
index ce29eecf1..c26f056a1 100644
--- a/terraform/transform_orphan_resource_test.go
+++ b/terraform/transform_orphan_resource_test.go
@@ -59,6 +59,31 @@ func TestOrphanResourceTransformer(t *testing.T) {
 	}
 }
 
+func TestOrphanResourceTransformer_nilModule(t *testing.T) {
+	mod := testModule(t, "transform-orphan-basic")
+	state := &State{
+		Modules: []*ModuleState{nil},
+	}
+
+	g := Graph{Path: RootModulePath}
+	{
+		tf := &ConfigTransformer{Module: mod}
+		if err := tf.Transform(&g); err != nil {
+			t.Fatalf("err: %s", err)
+		}
+	}
+
+	{
+		tf := &OrphanResourceTransformer{
+			Concrete: testOrphanResourceConcreteFunc,
+			State:    state, Module: mod,
+		}
+		if err := tf.Transform(&g); err != nil {
+			t.Fatalf("err: %s", err)
+		}
+	}
+}
+
 func TestOrphanResourceTransformer_countGood(t *testing.T) {
 	mod := testModule(t, "transform-orphan-count")
 	state := &State{