diff --git a/terraform/transform_expand.go b/terraform/transform_expand.go
new file mode 100644
index 000000000..ada9775f2
--- /dev/null
+++ b/terraform/transform_expand.go
@@ -0,0 +1,61 @@
+package terraform
+
+import (
+	"fmt"
+
+	"github.com/hashicorp/terraform/dag"
+)
+
+// GraphNodeExapndable is an interface that nodes can implement to
+// signal that they can be expanded. Expanded nodes turn into
+// GraphNodeSubgraph nodes within the graph.
+type GraphNodeExpandable interface {
+	Expand(GraphBuilder) (*Graph, error)
+}
+
+// GraphNodeSubgraph is an interface a node can implement if it has
+// a larger subgraph that should be walked.
+type GraphNodeSubgraph interface {
+	Subgraph() *Graph
+}
+
+// ExpandTransform is a transformer that does a subgraph expansion
+// at graph transform time (vs. at eval time). The benefit of earlier
+// subgraph expansion is that errors with the graph build can be detected
+// at an earlier stage.
+type ExpandTransform struct {
+	Builder GraphBuilder
+}
+
+func (t *ExpandTransform) Transform(v dag.Vertex) (dag.Vertex, error) {
+	ev, ok := v.(GraphNodeExpandable)
+	if !ok {
+		// This isn't an expandable vertex, so just ignore it.
+		return v, nil
+	}
+
+	// Expand the subgraph!
+	g, err := ev.Expand(t.Builder)
+	if err != nil {
+		return nil, err
+	}
+
+	// Replace with our special node
+	return &graphNodeExpanded{
+		Graph:        g,
+		OriginalName: dag.VertexName(v),
+	}, nil
+}
+
+type graphNodeExpanded struct {
+	Graph        *Graph
+	OriginalName string
+}
+
+func (n *graphNodeExpanded) Name() string {
+	return fmt.Sprintf("%s (expanded)", n.OriginalName)
+}
+
+func (n *graphNodeExpanded) Subgraph() *Graph {
+	return n.Graph
+}
diff --git a/terraform/transform_expand_test.go b/terraform/transform_expand_test.go
new file mode 100644
index 000000000..b63205557
--- /dev/null
+++ b/terraform/transform_expand_test.go
@@ -0,0 +1,69 @@
+package terraform
+
+import (
+	"strings"
+	"testing"
+
+	"github.com/hashicorp/terraform/dag"
+)
+
+func TestExpandTransform_impl(t *testing.T) {
+	var _ GraphVertexTransformer = new(ExpandTransform)
+}
+
+func TestExpandTransform(t *testing.T) {
+	var g Graph
+	g.Add(1)
+	g.Add(2)
+	g.Connect(dag.BasicEdge(1, 2))
+
+	tf := &ExpandTransform{}
+	out, err := tf.Transform(&testExpandable{
+		Result: &g,
+	})
+	if err != nil {
+		t.Fatalf("err: %s", err)
+	}
+
+	sn, ok := out.(GraphNodeSubgraph)
+	if !ok {
+		t.Fatalf("not subgraph: %#v", out)
+	}
+
+	actual := strings.TrimSpace(sn.Subgraph().String())
+	expected := strings.TrimSpace(testExpandTransformStr)
+	if actual != expected {
+		t.Fatalf("bad: %s", actual)
+	}
+}
+
+func TestExpandTransform_nonExpandable(t *testing.T) {
+	tf := &ExpandTransform{}
+	out, err := tf.Transform(42)
+	if err != nil {
+		t.Fatalf("err: %s", err)
+	}
+	if out != 42 {
+		t.Fatalf("bad: %#v", out)
+	}
+}
+
+type testExpandable struct {
+	// Inputs
+	Result      *Graph
+	ResultError error
+
+	// Outputs
+	Builder GraphBuilder
+}
+
+func (n *testExpandable) Expand(b GraphBuilder) (*Graph, error) {
+	n.Builder = b
+	return n.Result, n.ResultError
+}
+
+const testExpandTransformStr = `
+1
+  2
+2
+`