diff --git a/terraform-azure/.gitignore b/terraform-azure/.gitignore
new file mode 100644
index 0000000..66df410
--- /dev/null
+++ b/terraform-azure/.gitignore
@@ -0,0 +1 @@
+.terraform*
\ No newline at end of file
diff --git a/terraform-azure/main.tf b/terraform-azure/main.tf
new file mode 100644
index 0000000..890a562
--- /dev/null
+++ b/terraform-azure/main.tf
@@ -0,0 +1,34 @@
+resource "random_pet" "prefix" {}
+
+resource "azurerm_resource_group" "default" {
+  name     = "${random_pet.prefix.id}-rg"
+  location = "West US 2"
+
+  tags = {
+    environment = "Demo"
+  }
+}
+
+resource "azurerm_kubernetes_cluster" "default" {
+  name                = "o11ylab-k23-aks"
+  location            = azurerm_resource_group.default.location
+  resource_group_name = azurerm_resource_group.default.name
+  dns_prefix          = "o11ylab-k23-aks-k8s"
+
+  default_node_pool {
+    name            = "default"
+    node_count      = 3
+    vm_size         = "Standard_B2s"
+    os_disk_size_gb = 30
+  }
+   
+  identity {
+    type = "SystemAssigned"
+  }
+
+  role_based_access_control_enabled = true
+
+  tags = {
+    environment = "Demo"
+  }
+}
\ No newline at end of file
diff --git a/terraform-azure/outputs.tf b/terraform-azure/outputs.tf
new file mode 100644
index 0000000..c1efcc2
--- /dev/null
+++ b/terraform-azure/outputs.tf
@@ -0,0 +1,7 @@
+output "resource_group_name" {
+  value = azurerm_resource_group.default.name
+}
+
+output "kubernetes_cluster_name" {
+  value = azurerm_kubernetes_cluster.default.name
+}
\ No newline at end of file
diff --git a/terraform-azure/readme.md b/terraform-azure/readme.md
new file mode 100644
index 0000000..9c6794d
--- /dev/null
+++ b/terraform-azure/readme.md
@@ -0,0 +1,34 @@
+## Azure Terraform
+
+This provisions an AKS cluster using the `az` CLI for authentication.
+
+### 1. Authentication
+
+```
+    # Login to an azure account
+    az login
+```
+
+### 2. Creating a cluster
+
+```
+    terraform init
+    # Verify terraform plan output looks correct before continuing
+    terraform plan
+    terraform apply
+
+```
+
+Your cluster name and Azure resource group name will be output after running `terraform apply`.
+
+### 3. Connect to cluster
+
+```
+    az aks get-credentials --resource-group YOUR_RESOURCE_GROUP --name YOUR_CLUSTER_NAME
+```
+
+Verify kubectl is now configured for the cluster
+
+```
+    kubectl cluster-info
+```
\ No newline at end of file
diff --git a/terraform-azure/versions.tf b/terraform-azure/versions.tf
new file mode 100644
index 0000000..607bc58
--- /dev/null
+++ b/terraform-azure/versions.tf
@@ -0,0 +1,18 @@
+terraform {
+  required_providers {
+    azurerm = {
+      source  = "hashicorp/azurerm"
+      version = "=3.0.0"
+    }
+    random = {
+      source  = "hashicorp/random"
+      version = "=3.5.1"
+    }
+  }
+}
+
+# Defaults to CLI authentication
+provider "azurerm" {
+  features {}
+}
+