diff --git a/README.md b/README.md
index 773245e..51c6803 100644
--- a/README.md
+++ b/README.md
@@ -77,7 +77,7 @@ No modules.
 | <a name="input_helm_repository"></a> [helm\_repository](#input\_helm\_repository) | Repository URL for the Materialize operator Helm chart. Leave empty if using local chart. | `string` | `"https://materializeinc.github.io/materialize/"` | no |
 | <a name="input_helm_values"></a> [helm\_values](#input\_helm\_values) | Values to pass to the Helm chart | `any` | n/a | yes |
 | <a name="input_install_metrics_server"></a> [install\_metrics\_server](#input\_install\_metrics\_server) | Whether to install the metrics-server | `bool` | `true` | no |
-| <a name="input_instances"></a> [instances](#input\_instances) | Configuration for Materialize instances | <pre>list(object({<br/>    name                 = string<br/>    namespace            = optional(string)<br/>    create_database      = optional(bool, true)<br/>    database_name        = string<br/>    metadata_backend_url = string<br/>    persist_backend_url  = string<br/>    license_key          = optional(string)<br/>    environmentd_version = optional(string, "v0.130.13") # META: mz version<br/>    environmentd_extra_env = optional(list(object({<br/>      name  = string<br/>      value = string<br/>    })), [])<br/>    cpu_request             = optional(string, "1")<br/>    memory_request          = optional(string, "1Gi")<br/>    memory_limit            = optional(string, "1Gi")<br/>    in_place_rollout        = optional(bool, true)<br/>    request_rollout         = optional(string, "00000000-0000-0000-0000-000000000001")<br/>    force_rollout           = optional(string, "00000000-0000-0000-0000-000000000001")<br/>    balancer_memory_request = optional(string, "256Mi")<br/>    balancer_memory_limit   = optional(string, "256Mi")<br/>    balancer_cpu_request    = optional(string, "100m")<br/>  }))</pre> | `[]` | no |
+| <a name="input_instances"></a> [instances](#input\_instances) | Configuration for Materialize instances | <pre>list(object({<br/>    name                 = string<br/>    namespace            = optional(string)<br/>    create_database      = optional(bool, true)<br/>    database_name        = string<br/>    metadata_backend_url = string<br/>    persist_backend_url  = string<br/>    license_key          = optional(string)<br/>    environmentd_version = optional(string, "v0.130.13") # META: mz version<br/>    environmentd_extra_env = optional(list(object({<br/>      name  = string<br/>      value = string<br/>    })), [])<br/>    environmentd_extra_args = optional(list(string), [])<br/>    cpu_request             = optional(string, "1")<br/>    memory_request          = optional(string, "1Gi")<br/>    memory_limit            = optional(string, "1Gi")<br/>    in_place_rollout        = optional(bool, true)<br/>    request_rollout         = optional(string, "00000000-0000-0000-0000-000000000001")<br/>    force_rollout           = optional(string, "00000000-0000-0000-0000-000000000001")<br/>    balancer_memory_request = optional(string, "256Mi")<br/>    balancer_memory_limit   = optional(string, "256Mi")<br/>    balancer_cpu_request    = optional(string, "100m")<br/>  }))</pre> | `[]` | no |
 | <a name="input_metrics_server_version"></a> [metrics\_server\_version](#input\_metrics\_server\_version) | Version of metrics-server to install | `string` | `"3.12.2"` | no |
 | <a name="input_monitoring_namespace"></a> [monitoring\_namespace](#input\_monitoring\_namespace) | Namespace for monitoring resources | `string` | `"monitoring"` | no |
 | <a name="input_namespace"></a> [namespace](#input\_namespace) | Namespace prefix for all resources | `string` | n/a | yes |
diff --git a/examples/aws/terraform.tfvars.example b/examples/aws/terraform.tfvars.example
index 6b0f388..cfa1a7a 100644
--- a/examples/aws/terraform.tfvars.example
+++ b/examples/aws/terraform.tfvars.example
@@ -1,4 +1,3 @@
-
 instance_configs_example = [
   {
     name              = "mz-instance-1"
@@ -10,6 +9,10 @@ instance_configs_example = [
     cpu_request      = "2"
     memory_request   = "4Gi"
     memory_limit     = "8Gi"
+    environmentd_extra_args = [
+      "--system-parameter-default=max_clusters=100",
+      "--system-parameter-default=max_connections=100"
+    ]
   },
   {
     name              = "mz-instance-2"
diff --git a/examples/gcp/terraform.tfvars.example b/examples/gcp/terraform.tfvars.example
index f6b22fe..4eae3a6 100644
--- a/examples/gcp/terraform.tfvars.example
+++ b/examples/gcp/terraform.tfvars.example
@@ -9,6 +9,10 @@ instance_configs_example = [
     cpu_request      = "2"
     memory_request   = "4Gi"
     memory_limit     = "8Gi"
+    environmentd_extra_args = [
+      "--system-parameter-default=max_clusters=100",
+      "--system-parameter-default=max_connections=100"
+    ]
   },
   {
     name              = "mz-instance-2"
diff --git a/main.tf b/main.tf
index d2926c4..c0e51ef 100644
--- a/main.tf
+++ b/main.tf
@@ -12,6 +12,14 @@ locals {
       }
     ] : null
   }
+
+  format_env_args = {
+    for instance in var.instances : instance.name =>
+    length(lookup(instance, "environmentd_extra_args", [])) > 0 ? [
+      for item in instance.environmentd_extra_args :
+      item
+    ] : null
+  }
 }
 
 resource "kubernetes_namespace" "materialize" {
@@ -98,7 +106,8 @@ resource "kubernetes_manifest" "materialize_instances" {
       requestRollout       = lookup(each.value, "request_rollout", null)
       forceRollout         = lookup(each.value, "force_rollout", null)
 
-      environmentdExtraEnv = lookup(local.format_env_vars, each.key, null)
+      environmentdExtraEnv  = lookup(local.format_env_vars, each.key, null)
+      environmentdExtraArgs = lookup(local.format_env_args, each.key, null)
 
       environmentdResourceRequirements = {
         limits = {
diff --git a/variables.tf b/variables.tf
index 7a93bb2..affd510 100644
--- a/variables.tf
+++ b/variables.tf
@@ -77,6 +77,7 @@ variable "instances" {
       name  = string
       value = string
     })), [])
+    environmentd_extra_args = optional(list(string), [])
     cpu_request             = optional(string, "1")
     memory_request          = optional(string, "1Gi")
     memory_limit            = optional(string, "1Gi")