diff --git a/cloud/rds b/cloud/rds
index 99b0fb5446e..cf937ef57a4 100644
--- a/cloud/rds
+++ b/cloud/rds
@@ -349,12 +349,12 @@ def main():
         elif 'EC2_ACCESS_KEY' in os.environ:
             aws_access_key = os.environ['EC2_ACCESS_KEY']
 
-    if not aws_region:
+    if not region:
         module.fail_json(msg = str("region not specified and unable to determine region from EC2_REGION."))
 
     # connect to the rds endpoint
     try:
-        conn = boto.rds.connect_to_region(aws_region, aws_access_key_id=aws_access_key, aws_secret_access_key=aws_secret_key)
+        conn = boto.rds.connect_to_region(region, aws_access_key_id=aws_access_key, aws_secret_access_key=aws_secret_key)
     except boto.exception.BotoServerError, e:
         module.fail_json(msg = e.error_message)
 
@@ -438,7 +438,10 @@ def main():
         params["iops"] = iops
 
     if security_groups:
-        params["security_groups"] = security_groups.split(',')
+        if subnet:
+            params["vpc_security_groups"] = security_groups.split(',')
+        else:
+            params["security_groups"] = security_groups.split(',')
 
     try: 
         if command == 'create':