diff --git a/command/apply.go b/command/apply.go
index 8ecfde398..f900cb019 100644
--- a/command/apply.go
+++ b/command/apply.go
@@ -20,72 +20,31 @@ type ApplyCommand struct {
 
 func (c *ApplyCommand) Run(args []string) int {
 	var init bool
-	var statePath, stateOutPath string
+	var stateOutPath string
 
 	cmdFlags := flag.NewFlagSet("apply", flag.ContinueOnError)
 	cmdFlags.BoolVar(&init, "init", false, "init")
-	cmdFlags.StringVar(&statePath, "state", "terraform.tfstate", "path")
-	cmdFlags.StringVar(&stateOutPath, "state-out", "", "path")
+	cmdFlags.StringVar(&stateOutPath, "out", "", "path")
 	cmdFlags.Usage = func() { c.Ui.Error(c.Help()) }
 	if err := cmdFlags.Parse(args); err != nil {
 		return 1
 	}
 
 	args = cmdFlags.Args()
-	if len(args) != 1 {
-		c.Ui.Error(
-			"The apply command expects only one argument with the path\n" +
-				"to a Terraform configuration.\n")
+	if len(args) != 2 {
+		c.Ui.Error("The apply command expects two arguments.\n")
 		cmdFlags.Usage()
 		return 1
 	}
 
-	if statePath == "" {
-		c.Ui.Error("-state cannot be blank")
-		return 1
-	}
+	statePath := args[0]
+	configPath := args[1]
+
 	if stateOutPath == "" {
 		stateOutPath = statePath
 	}
-	if !init {
-		if _, err := os.Stat(statePath); err != nil {
-			c.Ui.Error(fmt.Sprintf(
-				"There was an error reading the state file. The path\n"+
-					"and error are shown below. If you're trying to build a\n"+
-					"brand new infrastructure, explicitly pass the '-init'\n"+
-					"flag to Terraform to tell it it is okay to build new\n"+
-					"state.\n\n"+
-					"Path: %s\n"+
-					"Error: %s",
-				statePath,
-				err))
-			return 1
-		}
-	}
-
-	// Load up the state
-	var state *terraform.State
-	if !init {
-		f, err := os.Open(statePath)
-		if err != nil {
-			c.Ui.Error(fmt.Sprintf("Error loading state: %s", err))
-			return 1
-		}
-
-		state, err = terraform.ReadState(f)
-		f.Close()
-		if err != nil {
-			c.Ui.Error(fmt.Sprintf("Error loading state: %s", err))
-			return 1
-		}
-	}
-
-	b, err := config.Load(args[0])
-	if err != nil {
-		c.Ui.Error(fmt.Sprintf("Error loading blueprint: %s", err))
-		return 1
-	}
 
+	// Initialize Terraform right away
 	c.TFConfig.Hooks = append(c.TFConfig.Hooks, &UiHook{Ui: c.Ui})
 	tf, err := terraform.New(c.TFConfig)
 	if err != nil {
@@ -93,27 +52,43 @@ func (c *ApplyCommand) Run(args []string) int {
 		return 1
 	}
 
-	plan, err := tf.Plan(b, state, nil)
-	if err != nil {
-		c.Ui.Error(fmt.Sprintf("Error running plan: %s", err))
-		return 1
+	// Attempt to read a plan from the path given. This is how we test that
+	// it is a plan or not (kind of jank, but if it quacks like a duck...)
+	var plan *terraform.Plan
+	f, err := os.Open(configPath)
+	if err == nil {
+		plan, err = terraform.ReadPlan(f)
+		f.Close()
+		if err != nil {
+			// Make sure the plan is nil so that we try to load as
+			// configuration.
+			plan = nil
+		}
 	}
 
-	state, err = tf.Apply(plan)
+	if plan == nil {
+		// No plan was given, so we're loading from configuration. Generate
+		// the plan given the configuration.
+		plan, err = c.configToPlan(tf, init, statePath, configPath)
+		if err != nil {
+			c.Ui.Error(err.Error())
+			return 1
+		}
+	}
+
+	state, err := tf.Apply(plan)
 	if err != nil {
 		c.Ui.Error(fmt.Sprintf("Error applying plan: %s", err))
 		return 1
 	}
 
 	// Write state out to the file
-	f, err := os.Create(stateOutPath)
-	if err != nil {
-		c.Ui.Error(fmt.Sprintf("Failed to save state: %s", err))
-		return 1
+	f, err = os.Create(stateOutPath)
+	if err == nil {
+		err = terraform.WriteState(state, f)
+		f.Close()
 	}
-	defer f.Close()
-
-	if err := terraform.WriteState(state, f); err != nil {
+	if err != nil {
 		c.Ui.Error(fmt.Sprintf("Failed to save state: %s", err))
 		return 1
 	}
@@ -125,7 +100,7 @@ func (c *ApplyCommand) Run(args []string) int {
 
 func (c *ApplyCommand) Help() string {
 	helpText := `
-Usage: terraform apply [terraform.tf]
+Usage: terraform apply [options] STATE PATH
 
   Builds or changes infrastructure according to the Terraform configuration
   file.
@@ -135,17 +110,60 @@ Options:
   -init                     If specified, it is okay to build brand new
                             infrastructure (with no state file specified).
 
-  -state=terraform.tfstate  Path to the state file to build off of. This file
-                            will also be written to with updated state unless
-                            -state-out is specified.
-
-  -state-out=file.tfstate   Path to save the new state. If not specified, the
-                            -state value will be used.
+  -out=file.tfstate         Path to save the new state. If not specified, the
+                            state path argument will be used.
 
 `
 	return strings.TrimSpace(helpText)
 }
 
 func (c *ApplyCommand) Synopsis() string {
-	return "Builds or changes infrastructure according to Terrafiles"
+	return "Builds or changes infrastructure"
+}
+
+func (c *ApplyCommand) configToPlan(
+	tf *terraform.Terraform,
+	init bool,
+	statePath string,
+	configPath string) (*terraform.Plan, error) {
+	if !init {
+		if _, err := os.Stat(statePath); err != nil {
+			return nil, fmt.Errorf(
+				"There was an error reading the state file. The path\n"+
+					"and error are shown below. If you're trying to build a\n"+
+					"brand new infrastructure, explicitly pass the '-init'\n"+
+					"flag to Terraform to tell it it is okay to build new\n"+
+					"state.\n\n"+
+					"Path: %s\n"+
+					"Error: %s",
+				statePath,
+				err)
+		}
+	}
+
+	// Load up the state
+	var state *terraform.State
+	if !init {
+		f, err := os.Open(statePath)
+		if err == nil {
+			state, err = terraform.ReadState(f)
+			f.Close()
+		}
+
+		if err != nil {
+			return nil, fmt.Errorf("Error loading state: %s", err)
+		}
+	}
+
+	config, err := config.Load(configPath)
+	if err != nil {
+		return nil, fmt.Errorf("Error loading config: %s", err)
+	}
+
+	plan, err := tf.Plan(config, state, nil)
+	if err != nil {
+		return nil, fmt.Errorf("Error running plan: %s", err)
+	}
+
+	return plan, nil
 }
diff --git a/command/apply_test.go b/command/apply_test.go
index 35d5e34d3..786e3c47b 100644
--- a/command/apply_test.go
+++ b/command/apply_test.go
@@ -1,7 +1,6 @@
 package command
 
 import (
-	"io/ioutil"
 	"os"
 	"reflect"
 	"testing"
@@ -11,13 +10,7 @@ import (
 )
 
 func TestApply(t *testing.T) {
-	tf, err := ioutil.TempFile("", "tf")
-	if err != nil {
-		t.Fatalf("err: %s", err)
-	}
-	statePath := tf.Name()
-	tf.Close()
-	os.Remove(tf.Name())
+	statePath := testTempFile(t)
 
 	p := testProvider()
 	ui := new(cli.MockUi)
@@ -28,7 +21,7 @@ func TestApply(t *testing.T) {
 
 	args := []string{
 		"-init",
-		"-state", statePath,
+		statePath,
 		testFixturePath("apply"),
 	}
 	if code := c.Run(args); code != 0 {
@@ -54,7 +47,10 @@ func TestApply(t *testing.T) {
 	}
 }
 
-func TestApply_noState(t *testing.T) {
+func TestApply_plan(t *testing.T) {
+	planPath := testPlanFile(t, new(terraform.Plan))
+	statePath := testTempFile(t)
+
 	p := testProvider()
 	ui := new(cli.MockUi)
 	c := &ApplyCommand{
@@ -63,23 +59,33 @@ func TestApply_noState(t *testing.T) {
 	}
 
 	args := []string{
-		"-state=",
-		testFixturePath("apply"),
+		statePath,
+		planPath,
 	}
-	if code := c.Run(args); code != 1 {
-		t.Fatalf("bad: \n%s", ui.OutputWriter.String())
+	if code := c.Run(args); code != 0 {
+		t.Fatalf("bad: %d\n\n%s", code, ui.ErrorWriter.String())
+	}
+
+	if _, err := os.Stat(statePath); err != nil {
+		t.Fatalf("err: %s", err)
+	}
+
+	f, err := os.Open(statePath)
+	if err != nil {
+		t.Fatalf("err: %s", err)
+	}
+	defer f.Close()
+
+	state, err := terraform.ReadState(f)
+	if err != nil {
+		t.Fatalf("err: %s", err)
+	}
+	if state == nil {
+		t.Fatal("state should not be nil")
 	}
 }
 
 func TestApply_state(t *testing.T) {
-	// Write out some prior state
-	tf, err := ioutil.TempFile("", "tf")
-	if err != nil {
-		t.Fatalf("err: %s", err)
-	}
-	statePath := tf.Name()
-	defer os.Remove(tf.Name())
-
 	originalState := &terraform.State{
 		Resources: map[string]*terraform.ResourceState{
 			"test_instance.foo": &terraform.ResourceState{
@@ -89,11 +95,7 @@ func TestApply_state(t *testing.T) {
 		},
 	}
 
-	err = terraform.WriteState(originalState, tf)
-	tf.Close()
-	if err != nil {
-		t.Fatalf("err: %s", err)
-	}
+	statePath := testStateFile(t, originalState)
 
 	p := testProvider()
 	ui := new(cli.MockUi)
@@ -104,7 +106,7 @@ func TestApply_state(t *testing.T) {
 
 	// Run the apply command pointing to our existing state
 	args := []string{
-		"-state", statePath,
+		statePath,
 		testFixturePath("apply"),
 	}
 	if code := c.Run(args); code != 0 {
@@ -150,7 +152,7 @@ func TestApply_stateNoExist(t *testing.T) {
 	}
 
 	args := []string{
-		"-state=idontexist.tfstate",
+		"idontexist.tfstate",
 		testFixturePath("apply"),
 	}
 	if code := c.Run(args); code != 1 {
diff --git a/command/command_test.go b/command/command_test.go
index 1b87d2bf1..efcefd55b 100644
--- a/command/command_test.go
+++ b/command/command_test.go
@@ -1,7 +1,10 @@
 package command
 
 import (
+	"io/ioutil"
+	"os"
 	"path/filepath"
+	"testing"
 
 	"github.com/hashicorp/terraform/terraform"
 )
@@ -23,6 +26,38 @@ func testTFConfig(p terraform.ResourceProvider) *terraform.Config {
 	}
 }
 
+func testPlanFile(t *testing.T, plan *terraform.Plan) string {
+	path := testTempFile(t)
+
+	f, err := os.Create(path)
+	if err != nil {
+		t.Fatalf("err: %s", err)
+	}
+	defer f.Close()
+
+	if err := terraform.WritePlan(plan, f); err != nil {
+		t.Fatalf("err: %s", err)
+	}
+
+	return path
+}
+
+func testStateFile(t *testing.T, s *terraform.State) string {
+	path := testTempFile(t)
+
+	f, err := os.Create(path)
+	if err != nil {
+		t.Fatalf("err: %s", err)
+	}
+	defer f.Close()
+
+	if err := terraform.WriteState(s, f); err != nil {
+		t.Fatalf("err: %s", err)
+	}
+
+	return path
+}
+
 func testProvider() *terraform.MockResourceProvider {
 	p := new(terraform.MockResourceProvider)
 	p.RefreshFn = func(
@@ -37,3 +72,21 @@ func testProvider() *terraform.MockResourceProvider {
 
 	return p
 }
+
+func testTempFile(t *testing.T) string {
+	tf, err := ioutil.TempFile("", "tf")
+	if err != nil {
+		t.Fatalf("err: %s", err)
+	}
+
+	result := tf.Name()
+
+	if err := tf.Close(); err != nil {
+		t.Fatalf("err: %s", err)
+	}
+	if err := os.Remove(result); err != nil {
+		t.Fatalf("err: %s", err)
+	}
+
+	return result
+}
diff --git a/terraform/plan.go b/terraform/plan.go
index f2ecb123d..2325618b8 100644
--- a/terraform/plan.go
+++ b/terraform/plan.go
@@ -33,6 +33,10 @@ func (p *Plan) String() string {
 
 func (p *Plan) init() {
 	p.once.Do(func() {
+		if p.Config == nil {
+			p.Config = new(config.Config)
+		}
+
 		if p.Diff == nil {
 			p.Diff = new(Diff)
 			p.Diff.init()
diff --git a/terraform/terraform.go b/terraform/terraform.go
index c6e426881..cbc2149c6 100644
--- a/terraform/terraform.go
+++ b/terraform/terraform.go
@@ -42,6 +42,10 @@ func New(c *Config) (*Terraform, error) {
 }
 
 func (t *Terraform) Apply(p *Plan) (*State, error) {
+	// Make sure we're working with a plan that doesn't have null pointers
+	// everywhere, and is instead just empty otherwise.
+	p.init()
+
 	g, err := t.Graph(p.Config, p.State)
 	if err != nil {
 		return nil, err