diff --git a/e2e/terraform/Makefile b/e2e/terraform/Makefile
index 703ab156c..9a473a26d 100644
--- a/e2e/terraform/Makefile
+++ b/e2e/terraform/Makefile
@@ -3,14 +3,12 @@ PKG_PATH = $(shell pwd)/../../pkg/linux_amd64/nomad
 
 dev-cluster:
 	terraform apply -auto-approve \
-		-var="nomad_sha=$(NOMAD_SHA)" \
-		-var="nomad_version="
+		-var="nomad_sha=$(NOMAD_SHA)"
 	terraform output environment
 
 dev-cluster-from-local:
 	terraform apply -auto-approve \
-		-var="nomad_local_binary=$(PKG_PATH)" \
-		-var="nomad_version="
+		-var="nomad_local_binary=$(PKG_PATH)"
 	terraform output environment
 
 clean:
@@ -18,15 +16,14 @@ clean:
 
 full-cluster:
 	terraform apply -auto-approve \
-		-var="nomad_sha=$(NOMAD_SHA)" \
-		-var-file=terraform.full.tfvars
+		-var-file=terraform.full.tfvars \
+		-var="nomad_sha=$(NOMAD_SHA)"
 
 plan-dev-cluster:
 	terraform plan \
-		-var="nomad_sha=$(NOMAD_SHA)" \
-		-var="nomad_version="
+		-var="nomad_sha=$(NOMAD_SHA)"
 
 plan-full-cluster:
 	terraform plan \
-		-var="nomad_sha=$(NOMAD_SHA)" \
-		-var-file=terraform.full.tfvars
+		-var-file=terraform.full.tfvars \
+		-var="nomad_sha=$(NOMAD_SHA)"
diff --git a/e2e/terraform/README.md b/e2e/terraform/README.md
index 1e30f572a..052d19388 100644
--- a/e2e/terraform/README.md
+++ b/e2e/terraform/README.md
@@ -32,7 +32,7 @@ Run Terraform apply to deploy the infrastructure:
 
 ```sh
 cd e2e/terraform/
-terraform apply -var=nomad_sha=abcedf
+terraform apply
 ```
 
 > Note: You will likely see "Connection refused" or "Permission denied" errors
@@ -49,12 +49,13 @@ You'll need to pass one of the following variables in either your
 
 * `nomad_local_binary`: provision this specific local binary of Nomad. This is
   a path to a Nomad binary on your own host. Ex. `nomad_local_binary =
-  "/home/me/nomad"`.
+  "/home/me/nomad"`. This setting overrides `nomad_sha` or `nomad_version`.
 * `nomad_sha`: provision this specific sha from S3. This is a Nomad binary
   identified by its full commit SHA that's stored in a shared s3 bucket that
   Nomad team developers can access. That commit SHA can be from any branch
   that's pushed to remote. Ex. `nomad_sha =
-  "0b6b475e7da77fed25727ea9f01f155a58481b6c"`
+  "0b6b475e7da77fed25727ea9f01f155a58481b6c"`. This setting overrides
+  `nomad_version`.
 * `nomad_version`: provision this version from
   [releases.hashicorp.com](https://releases.hashicorp.com/nomad). Ex. `nomad_version
   = "0.10.2+ent"`
diff --git a/e2e/terraform/provision-nomad/main.tf b/e2e/terraform/provision-nomad/main.tf
index 3cb97694c..2f0307640 100644
--- a/e2e/terraform/provision-nomad/main.tf
+++ b/e2e/terraform/provision-nomad/main.tf
@@ -50,11 +50,11 @@ data "template_file" "provision_script" {
 }
 
 data "template_file" "arg_nomad_sha" {
-  template = var.nomad_sha != "" ? " ${local._arg}nomad_sha ${var.nomad_sha}" : ""
+  template = var.nomad_sha != "" && var.nomad_local_binary == "" ? " ${local._arg}nomad_sha ${var.nomad_sha}" : ""
 }
 
 data "template_file" "arg_nomad_version" {
-  template = var.nomad_version != "" ? " ${local._arg}nomad_version ${var.nomad_version}" : ""
+  template = var.nomad_version != "" && var.nomad_sha == "" && var.nomad_local_binary == "" ? " ${local._arg}nomad_version ${var.nomad_version}" : ""
 }
 
 data "template_file" "arg_nomad_binary" {
diff --git a/e2e/terraform/terraform.full.tfvars b/e2e/terraform/terraform.full.tfvars
index a39bde66d..e0807f423 100644
--- a/e2e/terraform/terraform.full.tfvars
+++ b/e2e/terraform/terraform.full.tfvars
@@ -8,3 +8,8 @@ nomad_enterprise                 = true
 nomad_acls                       = true
 vault                            = true
 volumes                          = true
+
+# required to avoid picking up defaults from terraform.tfvars file
+nomad_version      = "" # default version for deployment
+nomad_sha          = "" # overrides nomad_version if set
+nomad_local_binary = "" # overrides nomad_sha and nomad_version if set
diff --git a/e2e/terraform/terraform.tfvars b/e2e/terraform/terraform.tfvars
index 17d9e4401..3647a42fe 100644
--- a/e2e/terraform/terraform.tfvars
+++ b/e2e/terraform/terraform.tfvars
@@ -9,8 +9,9 @@ nomad_enterprise                 = false
 vault                            = true
 volumes                          = false
 
-# default version for deployment
-nomad_version = "0.12.7"
+nomad_version      = "0.12.7" # default version for deployment
+nomad_sha          = ""       # overrides nomad_version if set
+nomad_local_binary = ""       # overrides nomad_sha and nomad_version if set
 
 # Example overrides:
 # nomad_sha = "38e23b62a7700c96f4898be777543869499fea0a"