Providers are plugins that enable Terraform to interact with cloud platforms, SaaS providers, and APIs. They define resource types and data sources available for use.

Example AWS provider configuration:

terraform {
  required_providers {
    aws = {
      source  = "hashicorp/aws"
      version = "~> 5.0"
    }
  }
}

provider "aws" {
  region = "us-west-2"
}