diff --git a/third_party/terraform/resources/resource_compute_instance_from_template.go b/third_party/terraform/resources/resource_compute_instance_from_template.go
index ad1840784890..c5793396f399 100644
--- a/third_party/terraform/resources/resource_compute_instance_from_template.go
+++ b/third_party/terraform/resources/resource_compute_instance_from_template.go
@@ -181,6 +181,10 @@ func adjustInstanceFromTemplateDisks(d *schema.ResourceData, config *Config, it
 		// boot disk was not overridden, so use the one from the instance template
 		for _, disk := range it.Properties.Disks {
 			if disk.Boot {
+				if disk.Source != "" {
+					// Instances need a URL for the disk, but instance templates only have the name
+					disk.Source = fmt.Sprintf("projects/%s/zones/%s/disks/%s", project, zone.Name, disk.Source)
+				}
 				if disk.InitializeParams != nil {
 					if dt := disk.InitializeParams.DiskType; dt != "" {
 						// Instances need a URL for the disk type, but instance templates
diff --git a/third_party/terraform/tests/resource_compute_instance_from_template_test.go b/third_party/terraform/tests/resource_compute_instance_from_template_test.go
index 0309417fcfa5..f419604a923b 100644
--- a/third_party/terraform/tests/resource_compute_instance_from_template_test.go
+++ b/third_party/terraform/tests/resource_compute_instance_from_template_test.go
@@ -229,17 +229,10 @@ resource "google_compute_instance_template" "foobar" {
   name         = "%s"
   machine_type = "n1-standard-1"
 
-  disk {
-    source_image = data.google_compute_image.my_image.self_link
-    auto_delete  = true
-    disk_size_gb = 100
-    boot         = true
-  }
-
   disk {
     source      = google_compute_disk.foobar.name
     auto_delete = false
-    boot        = false
+    boot        = true
   }
 
   disk {
@@ -249,6 +242,15 @@ resource "google_compute_instance_template" "foobar" {
     disk_size_gb = 375
   }
 
+  disk {
+    source_image = data.google_compute_image.my_image.self_link
+    auto_delete  = true
+    disk_size_gb = 100
+    boot         = false
+    disk_type    = "pd-ssd"
+    type         = "PERSISTENT"
+  }
+
   network_interface {
     network = "default"
   }