diff --git a/builtin/providers/aws/resource_aws_lambda_function.go b/builtin/providers/aws/resource_aws_lambda_function.go
index 4cce32f4d92c..363a18af2c70 100644
--- a/builtin/providers/aws/resource_aws_lambda_function.go
+++ b/builtin/providers/aws/resource_aws_lambda_function.go
@@ -83,6 +83,29 @@ func resourceAwsLambdaFunction() *schema.Resource {
 				Default:  3,
 				ForceNew: true, // TODO make this editable
 			},
+			"vpc_config": &schema.Schema{
+				Type:     schema.TypeList,
+				Optional: true,
+				ForceNew: true,
+				Elem: &schema.Resource{
+					Schema: map[string]*schema.Schema{
+						"subnet_ids": &schema.Schema{
+							Type:     schema.TypeSet,
+							Required: true,
+							ForceNew: true,
+							Elem:     &schema.Schema{Type: schema.TypeString},
+							Set:      schema.HashString,
+						},
+						"security_group_ids": &schema.Schema{
+							Type:     schema.TypeSet,
+							Required: true,
+							ForceNew: true,
+							Elem:     &schema.Schema{Type: schema.TypeString},
+							Set:      schema.HashString,
+						},
+					},
+				},
+			},
 			"arn": &schema.Schema{
 				Type:     schema.TypeString,
 				Computed: true,
@@ -149,6 +172,31 @@ func resourceAwsLambdaFunctionCreate(d *schema.ResourceData, meta interface{}) e
 		Timeout:      aws.Int64(int64(d.Get("timeout").(int))),
 	}
 
+	if v, ok := d.GetOk("vpc_config"); ok {
+		configs := v.([]interface{})
+
+		if len(configs) > 1 {
+			return errors.New("Only a single vpc_config block is expected")
+		} else if len(configs) == 1 {
+			config := configs[0].(map[string]interface{})
+			var subnetIds []*string
+			for _, id := range config["subnet_ids"].(*schema.Set).List() {
+				subnetIds = append(subnetIds, aws.String(id.(string)))
+			}
+
+			var securityGroupIds []*string
+			for _, id := range config["security_group_ids"].(*schema.Set).List() {
+				securityGroupIds = append(securityGroupIds, aws.String(id.(string)))
+			}
+
+			var vpcConfig = &lambda.VpcConfig{
+				SubnetIds:        subnetIds,
+				SecurityGroupIds: securityGroupIds,
+			}
+			params.VpcConfig = vpcConfig
+		}
+	}
+
 	// IAM profiles can take ~10 seconds to propagate in AWS:
 	//  http://docs.aws.amazon.com/AWSEC2/latest/UserGuide/iam-roles-for-amazon-ec2.html#launch-instance-with-role-console
 	// Error creating Lambda function: InvalidParameterValueException: The role defined for the task cannot be assumed by Lambda.
@@ -157,10 +205,12 @@ func resourceAwsLambdaFunctionCreate(d *schema.ResourceData, meta interface{}) e
 		if err != nil {
 			if awserr, ok := err.(awserr.Error); ok {
 				if awserr.Code() == "InvalidParameterValueException" {
+					log.Printf("[DEBUG] InvalidParameterValueException creating Lambda Function: %s", awserr)
 					// Retryable
 					return awserr
 				}
 			}
+			log.Printf("[DEBUG] Error creating Lambda Function: %s", err)
 			// Not retryable
 			return resource.RetryError{Err: err}
 		}
@@ -207,6 +257,7 @@ func resourceAwsLambdaFunctionRead(d *schema.ResourceData, meta interface{}) err
 	d.Set("role", function.Role)
 	d.Set("runtime", function.Runtime)
 	d.Set("timeout", function.Timeout)
+	d.Set("vpc_config", flattenLambdaVpcConfigResponse(function.VpcConfig))
 
 	return nil
 }
diff --git a/builtin/providers/aws/resource_aws_lambda_function_test.go b/builtin/providers/aws/resource_aws_lambda_function_test.go
index acf991b9f945..ff6f92bd4f33 100644
--- a/builtin/providers/aws/resource_aws_lambda_function_test.go
+++ b/builtin/providers/aws/resource_aws_lambda_function_test.go
@@ -97,6 +97,36 @@ func testAccCheckAWSLambdaAttributes(function *lambda.GetFunctionOutput) resourc
 }
 
 const testAccAWSLambdaConfig = `
+resource "aws_iam_role_policy" "iam_policy_for_lambda" {
+    name = "iam_policy_for_lambda"
+    role = "${aws_iam_role.iam_for_lambda.id}"
+    policy = <<EOF
+{
+  "Version": "2012-10-17",
+  "Statement": [
+        {
+            "Effect": "Allow",
+            "Action": [
+                "logs:CreateLogGroup",
+                "logs:CreateLogStream",
+                "logs:PutLogEvents"
+            ],
+            "Resource": "arn:aws:logs:*:*:*"
+        },
+    {
+      "Effect": "Allow",
+      "Action": [
+        "ec2:CreateNetworkInterface"
+      ],
+      "Resource": [
+        "*"
+      ]
+    }
+  ]
+}
+EOF
+}
+
 resource "aws_iam_role" "iam_for_lambda" {
     name = "iam_for_lambda"
     assume_role_policy = <<EOF
@@ -116,10 +146,48 @@ resource "aws_iam_role" "iam_for_lambda" {
 EOF
 }
 
+resource "aws_vpc" "vpc_for_lambda" {
+    cidr_block = "10.0.0.0/16"
+}
+
+resource "aws_subnet" "subnet_for_lambda" {
+    vpc_id = "${aws_vpc.vpc_for_lambda.id}"
+    cidr_block = "10.0.1.0/24"
+
+    tags {
+        Name = "lambda"
+    }
+}
+
+resource "aws_security_group" "sg_for_lambda" {
+  name = "sg_for_lambda"
+  description = "Allow all inbound traffic for lambda test"
+  vpc_id = "${aws_vpc.vpc_for_lambda.id}"
+
+  ingress {
+      from_port = 0
+      to_port = 0
+      protocol = "-1"
+      cidr_blocks = ["0.0.0.0/0"]
+  }
+
+  egress {
+      from_port = 0
+      to_port = 0
+      protocol = "-1"
+      cidr_blocks = ["0.0.0.0/0"]
+  }
+}
+
 resource "aws_lambda_function" "lambda_function_test" {
     filename = "test-fixtures/lambdatest.zip"
     function_name = "example_lambda_name"
     role = "${aws_iam_role.iam_for_lambda.arn}"
     handler = "exports.example"
+
+    vpc_config = {
+        subnet_ids = ["${aws_subnet.subnet_for_lambda.id}"]
+        security_group_ids = ["${aws_security_group.sg_for_lambda.id}"]
+    }
 }
 `
diff --git a/builtin/providers/aws/structure.go b/builtin/providers/aws/structure.go
index b809fe92de11..2b5ee18214b4 100644
--- a/builtin/providers/aws/structure.go
+++ b/builtin/providers/aws/structure.go
@@ -15,6 +15,7 @@ import (
 	"github.com/aws/aws-sdk-go/service/elasticache"
 	elasticsearch "github.com/aws/aws-sdk-go/service/elasticsearchservice"
 	"github.com/aws/aws-sdk-go/service/elb"
+	"github.com/aws/aws-sdk-go/service/lambda"
 	"github.com/aws/aws-sdk-go/service/rds"
 	"github.com/aws/aws-sdk-go/service/redshift"
 	"github.com/aws/aws-sdk-go/service/route53"
@@ -708,6 +709,20 @@ func flattenDSVpcSettings(
 	return []map[string]interface{}{settings}
 }
 
+func flattenLambdaVpcConfigResponse(s *lambda.VpcConfigResponse) []map[string]interface{} {
+	settings := make(map[string]interface{}, 0)
+
+	if s == nil {
+		return nil
+	}
+
+	settings["subnet_ids"] = schema.NewSet(schema.HashString, flattenStringList(s.SubnetIds))
+	settings["security_group_ids"] = schema.NewSet(schema.HashString, flattenStringList(s.SecurityGroupIds))
+	settings["vpc_id"] = *s.VpcId
+
+	return []map[string]interface{}{settings}
+}
+
 func flattenDSConnectSettings(
 	customerDnsIps []*string,
 	s *directoryservice.DirectoryConnectSettingsDescription) []map[string]interface{} {