diff --git a/.changes/v1.15/BUG FIXES-20251105-131122.yaml b/.changes/v1.15/BUG FIXES-20251105-131122.yaml
new file mode 100644
index 000000000000..caa0b010589c
--- /dev/null
+++ b/.changes/v1.15/BUG FIXES-20251105-131122.yaml	
@@ -0,0 +1,5 @@
+kind: BUG FIXES
+body: 'backend: Fixed a bug where backends began to ignore empty string values set in the backend configuration.'
+time: 2025-11-05T13:11:22.098037Z
+custom:
+    Issue: "37846"
diff --git a/internal/backend/backendbase/base_test.go b/internal/backend/backendbase/base_test.go
index 0882489df2c3..e892cc79b17c 100644
--- a/internal/backend/backendbase/base_test.go
+++ b/internal/backend/backendbase/base_test.go
@@ -239,3 +239,54 @@ func TestBase_nullCrash(t *testing.T) {
 		}
 	})
 }
+
+func TestBase_emptyStringsUsed(t *testing.T) {
+	// This test ensures that empty strings in config are used and aren't ignored
+	// in favor of SDKLikeDefaults
+
+	b := Base{
+		Schema: &configschema.Block{
+			Attributes: map[string]*configschema.Attribute{
+				"foo": {
+					Type:     cty.String,
+					Required: true,
+				},
+			},
+		},
+		SDKLikeDefaults: SDKLikeDefaults{
+			"foo": {
+				Fallback: "fallback",
+				EnvVars:  []string{"FOO"},
+			},
+		},
+	}
+
+	t.Run("empty string from config is used despite fallback default value and environment variable value set", func(t *testing.T) {
+		// There is a fallback value supplied by the environment
+		envValue := "value from ENV"
+		t.Setenv("FOO", envValue)
+
+		// We pass an explicit empty string as the value of foo
+		val, gotDiags := b.PrepareConfig(cty.ObjectVal(map[string]cty.Value{
+			"foo": cty.StringVal(""),
+		}))
+		if gotDiags.HasErrors() {
+			t.Fatalf("unexpected error diagnostics\n%s", gotDiags.Err())
+		}
+		attrs := val.AsValueMap()
+		if v, ok := attrs["foo"]; ok {
+			if v.IsNull() {
+				t.Fatal("value shouldn't be null")
+			}
+			if v.AsString() != "" {
+				// If the empty string from config is ignored, the value here
+				// will be either thing defined in SDKLikeDefaults above:
+				// 1) the "fallback" string.
+				// 2) the value of FOO environment variable.
+				t.Fatalf("value should be an empty string, but got: %q", v.AsString())
+			}
+		} else {
+			t.Fatal("cannot find attribute foo")
+		}
+	})
+}
diff --git a/internal/backend/backendbase/sdklike.go b/internal/backend/backendbase/sdklike.go
index 9d53cbf6b543..ec35b9d1ac5c 100644
--- a/internal/backend/backendbase/sdklike.go
+++ b/internal/backend/backendbase/sdklike.go
@@ -199,6 +199,11 @@ func (d SDKLikeDefaults) ApplyTo(base cty.Value) (cty.Value, error) {
 			retAttrs[attrName] = givenVal
 			continue
 		}
+		if !givenVal.IsNull() && (givenVal.Type() == cty.String) && (givenVal.AsString() == "") {
+			// Don't use defaults if a string attribute is explicitly set to an empty string in the configuration.
+			retAttrs[attrName] = givenVal
+			continue
+		}
 
 		// The legacy SDK shims convert all values into strings (for flatmap)
 		// and then do their work in terms of that, so we'll follow suit here.
diff --git a/internal/backend/backendbase/sdklike_test.go b/internal/backend/backendbase/sdklike_test.go
index bca3b8a4ebf8..37ba45314400 100644
--- a/internal/backend/backendbase/sdklike_test.go
+++ b/internal/backend/backendbase/sdklike_test.go
@@ -264,9 +264,9 @@ func TestSDKLikeApplyEnvDefaults(t *testing.T) {
 			"string_set_fallback":    cty.StringVal("set in config"),
 			"string_set_env":         cty.StringVal("set in config"),
 			"string_fallback_null":   cty.StringVal("boop from fallback"),
-			"string_fallback_empty":  cty.StringVal("boop from fallback"),
+			"string_fallback_empty":  cty.StringVal(""), // config value is used
 			"string_env_null":        cty.StringVal("beep from environment"),
-			"string_env_empty":       cty.StringVal("beep from environment"),
+			"string_env_empty":       cty.StringVal(""), // config value is used
 			"string_env_unsetfirst":  cty.StringVal("beep from environment"),
 			"string_env_unsetsecond": cty.StringVal("beep from environment"),
 			"string_nothing_null":    cty.NullVal(cty.String),