diff --git a/ext/typeexpr/defaults.go b/ext/typeexpr/defaults.go
index 4aeb1fb9..43a2539d 100644
--- a/ext/typeexpr/defaults.go
+++ b/ext/typeexpr/defaults.go
@@ -95,6 +95,9 @@ func (d *Defaults) apply(v cty.Value) cty.Value {
 				}
 				values[key] = defaultValue
 			}
+			if defaultRng := defaultValue.Range(); defaultRng.DefinitelyNotNull() {
+				values[key] = values[key].RefineNotNull()
+			}
 		}
 
 		if v.Type().IsMapType() {
diff --git a/ext/typeexpr/defaults_test.go b/ext/typeexpr/defaults_test.go
index 8b90e752..5f0588f5 100644
--- a/ext/typeexpr/defaults_test.go
+++ b/ext/typeexpr/defaults_test.go
@@ -830,6 +830,74 @@ func TestDefaults_Apply(t *testing.T) {
 				}),
 			}),
 		},
+		"optional attribute with a default can never be null": {
+			defaults: &Defaults{
+				Type: cty.ObjectWithOptionalAttrs(map[string]cty.Type{
+					"foo": cty.String,
+				}, []string{"foo"}),
+				DefaultValues: map[string]cty.Value{
+					"foo": cty.StringVal("bar"), // Important: default is non-null
+				},
+			},
+			value: cty.ObjectVal(map[string]cty.Value{
+				"foo": cty.UnknownVal(cty.String), // could potentially be null once known
+			}),
+			want: cty.ObjectVal(map[string]cty.Value{
+				// Because the default isn't null we can guarantee that the
+				// result cannot be null even if the given value turns out to be.
+				"foo": cty.UnknownVal(cty.String).RefineNotNull(),
+			}),
+		},
+		"optional attribute with a null default could be null": {
+			defaults: &Defaults{
+				Type: cty.ObjectWithOptionalAttrs(map[string]cty.Type{
+					"foo": cty.String,
+				}, []string{"foo"}),
+				DefaultValues: map[string]cty.Value{
+					"foo": cty.NullVal(cty.String), // Important: default is null
+				},
+			},
+			value: cty.ObjectVal(map[string]cty.Value{
+				"foo": cty.UnknownVal(cty.String), // could potentially be null once known
+			}),
+			want: cty.ObjectVal(map[string]cty.Value{
+				// The default value is itself null, so this result is nullable.
+				"foo": cty.UnknownVal(cty.String),
+			}),
+		},
+		"optional attribute with no default could be null": {
+			defaults: &Defaults{
+				Type: cty.ObjectWithOptionalAttrs(map[string]cty.Type{
+					"foo": cty.String,
+				}, []string{"foo"}),
+			},
+			value: cty.ObjectVal(map[string]cty.Value{
+				"foo": cty.UnknownVal(cty.String), // could potentially be null once known
+			}),
+			want: cty.ObjectVal(map[string]cty.Value{
+				// The default value is itself null, so this result is nullable.
+				"foo": cty.UnknownVal(cty.String),
+			}),
+		},
+		"optional attribute with non-null unknown value cannot be null": {
+			defaults: &Defaults{
+				Type: cty.ObjectWithOptionalAttrs(map[string]cty.Type{
+					"foo": cty.String,
+				}, []string{"foo"}),
+				DefaultValues: map[string]cty.Value{
+					"foo": cty.NullVal(cty.String), // Important: default is null
+				},
+			},
+			value: cty.ObjectVal(map[string]cty.Value{
+				"foo": cty.UnknownVal(cty.String).RefineNotNull(),
+			}),
+			want: cty.ObjectVal(map[string]cty.Value{
+				// If the input is guaranteed not null then the default
+				// value can't possibly be selected, and so the result can
+				// also not be null.
+				"foo": cty.UnknownVal(cty.String).RefineNotNull(),
+			}),
+		},
 	}
 
 	for name, tc := range testCases {