diff --git a/terraform/context.go b/terraform/context.go
index 213a6b79d..8eb637f77 100644
--- a/terraform/context.go
+++ b/terraform/context.go
@@ -837,6 +837,37 @@ func (c *walkContext) validateWalkFn() depgraph.WalkFunc {
 				raw = sharedProvider.Config.RawConfig
 			}
 
+			// If we have a parent, then merge in the parent configurations
+			// properly so we "inherit" the configurations.
+			if sharedProvider.Parent != nil {
+				var rawMap map[string]interface{}
+				if raw != nil {
+					rawMap = raw.Raw
+				}
+
+				parent := sharedProvider.Parent
+				for parent != nil {
+					if parent.Config != nil {
+						if rawMap == nil {
+							rawMap = parent.Config.RawConfig.Raw
+						}
+
+						for k, v := range parent.Config.RawConfig.Raw {
+							rawMap[k] = v
+						}
+					}
+
+					parent = parent.Parent
+				}
+
+				// Update our configuration to be the merged result
+				var err error
+				raw, err = config.NewRawConfig(rawMap)
+				if err != nil {
+					return fmt.Errorf("Error merging configurations: %s", err)
+				}
+			}
+
 			rc := NewResourceConfig(raw)
 
 			for k, p := range sharedProvider.Providers {
diff --git a/terraform/context_test.go b/terraform/context_test.go
index b1e28b4db..e3b22dea5 100644
--- a/terraform/context_test.go
+++ b/terraform/context_test.go
@@ -128,6 +128,29 @@ func TestContextValidate_moduleBadResource(t *testing.T) {
 	}
 }
 
+func TestContextValidate_moduleProviderInherit(t *testing.T) {
+	m := testModule(t, "validate-module-pc-inherit")
+	p := testProvider("aws")
+	c := testContext(t, &ContextOpts{
+		Module: m,
+		Providers: map[string]ResourceProviderFactory{
+			"aws": testProviderFuncFixed(p),
+		},
+	})
+
+	p.ValidateFn = func(c *ResourceConfig) ([]string, []error) {
+		return nil, c.CheckSet([]string{"set"})
+	}
+
+	w, e := c.Validate()
+	if len(w) > 0 {
+		t.Fatalf("bad: %#v", w)
+	}
+	if len(e) > 0 {
+		t.Fatalf("bad: %#v", e)
+	}
+}
+
 func TestContextValidate_orphans(t *testing.T) {
 	p := testProvider("aws")
 	m := testModule(t, "validate-good")
diff --git a/terraform/resource_provider_mock.go b/terraform/resource_provider_mock.go
index 2cd9e9ac4..060fef33b 100644
--- a/terraform/resource_provider_mock.go
+++ b/terraform/resource_provider_mock.go
@@ -40,6 +40,7 @@ type MockResourceProvider struct {
 	ResourcesReturn              []ResourceType
 	ValidateCalled               bool
 	ValidateConfig               *ResourceConfig
+	ValidateFn                   func(*ResourceConfig) ([]string, []error)
 	ValidateReturnWarns          []string
 	ValidateReturnErrors         []error
 	ValidateResourceFn           func(string, *ResourceConfig) ([]string, []error)
@@ -56,6 +57,9 @@ func (p *MockResourceProvider) Validate(c *ResourceConfig) ([]string, []error) {
 
 	p.ValidateCalled = true
 	p.ValidateConfig = c
+	if p.ValidateFn != nil {
+		return p.ValidateFn(c)
+	}
 	return p.ValidateReturnWarns, p.ValidateReturnErrors
 }
 
diff --git a/terraform/test-fixtures/validate-module-pc-inherit/child/main.tf b/terraform/test-fixtures/validate-module-pc-inherit/child/main.tf
new file mode 100644
index 000000000..37189c1ff
--- /dev/null
+++ b/terraform/test-fixtures/validate-module-pc-inherit/child/main.tf
@@ -0,0 +1,3 @@
+provider "aws" {}
+
+resource "aws_instance" "foo" {}
diff --git a/terraform/test-fixtures/validate-module-pc-inherit/main.tf b/terraform/test-fixtures/validate-module-pc-inherit/main.tf
new file mode 100644
index 000000000..8976f4aa9
--- /dev/null
+++ b/terraform/test-fixtures/validate-module-pc-inherit/main.tf
@@ -0,0 +1,9 @@
+module "child" {
+    source = "./child"
+}
+
+provider "aws" {
+    set = true
+}
+
+resource "aws_instance" "foo" {}