diff --git a/terraform/.gitignore b/terraform/.gitignore
new file mode 100644
index 000000000..a3b6fa3db
--- /dev/null
+++ b/terraform/.gitignore
@@ -0,0 +1,15 @@
+# Terraform
+*.tfstate
+*.tfstate.*
+*.tfvars
+.terraform/
+.terraform.lock.hcl
+crash.log
+override.tf
+*.tfplan
+
+# Secrets
+*.pem
+*.key
+.env
+.env.local
\ No newline at end of file
diff --git a/terraform/main.tf b/terraform/main.tf
new file mode 100644
index 000000000..7e0772a73
--- /dev/null
+++ b/terraform/main.tf
@@ -0,0 +1,143 @@
+terraform {
+  required_version = ">= 1.6.0"
+  
+  required_providers {
+    google = {
+      source  = "hashicorp/google"
+      version = "~> 5.0"
+    }
+  }
+
+  # backend "gcs" {
+  #   bucket = "terraform-state-bucket"
+  #   prefix = "terraform/state"
+  # }
+}
+
+provider "google" {
+  project = var.project_id
+  region  = var.region
+}
+
+locals {
+  service_name = "petclinic-${var.environment}"
+  labels = {
+    environment = var.environment
+    application = "petclinic"
+    managed-by  = "terraform"
+  }
+}
+
+# Artifact Registry Repository
+resource "google_artifact_registry_repository" "petclinic" {
+  location      = var.region
+  repository_id = "petclinic"
+  description   = "Docker repository for PetClinic application"
+  format        = "DOCKER"
+  
+  labels = local.labels
+}
+
+# Service Account for Cloud Run
+resource "google_service_account" "petclinic" {
+  account_id   = "petclinic-${var.environment}"
+  display_name = "PetClinic Service Account (${var.environment})"
+  description  = "Service account for PetClinic Cloud Run service"
+}
+
+# Grant Cloud Run service account 
+resource "google_project_iam_member" "petclinic_log_writer" {
+  project = var.project_id
+  role    = "roles/logging.logWriter"
+  member  = "serviceAccount:${google_service_account.petclinic.email}"
+}
+
+resource "google_project_iam_member" "petclinic_metric_writer" {
+  project = var.project_id
+  role    = "roles/monitoring.metricWriter"
+  member  = "serviceAccount:${google_service_account.petclinic.email}"
+}
+
+# Cloud Run Service
+resource "google_cloud_run_v2_service" "petclinic" {
+  name     = local.service_name
+  location = var.region
+  
+  labels = local.labels
+  
+  template {
+    service_account = google_service_account.petclinic.email
+    
+    scaling {
+      min_instance_count = var.min_instances
+      max_instance_count = var.max_instances
+    }
+    
+    containers {
+      image = "${var.region}-docker.pkg.dev/${var.project_id}/petclinic/spring-petclinic:${var.image_tag}"
+      
+      resources {
+        limits = {
+          cpu    = var.cpu_limit
+          memory = var.memory_limit
+        }
+        cpu_idle          = true
+        startup_cpu_boost = true
+      }
+      
+      env {
+        name  = "SPRING_PROFILES_ACTIVE"
+        value = var.environment
+      }
+      
+      env {
+        name  = "JAVA_OPTS"
+        value = "-XX:MaxRAMPercentage=75.0 -XX:+UseContainerSupport"
+      }
+      
+      # Health check probes
+      startup_probe {
+        http_get {
+          path = "/actuator/health/liveness"
+          port = 8080
+        }
+        initial_delay_seconds = 0
+        timeout_seconds       = 1
+        period_seconds        = 3
+        failure_threshold     = 10
+      }
+      
+      liveness_probe {
+        http_get {
+          path = "/actuator/health/liveness"
+          port = 8080
+        }
+        initial_delay_seconds = 0
+        timeout_seconds       = 1
+        period_seconds        = 10
+        failure_threshold     = 3
+      }
+    }
+  }
+  
+  traffic {
+    type    = "TRAFFIC_TARGET_ALLOCATION_TYPE_LATEST"
+    percent = 100
+  }
+  
+  depends_on = [
+    google_project_iam_member.petclinic_log_writer,
+    google_project_iam_member.petclinic_metric_writer,
+  ]
+}
+
+# IAM Policy for Public Access
+resource "google_cloud_run_v2_service_iam_member" "public_access" {
+  count = var.allow_public_access ? 1 : 0
+  
+  project  = var.project_id
+  location = var.region
+  name     = google_cloud_run_v2_service.petclinic.name
+  role     = "roles/run.invoker"
+  member   = "allUsers"
+}
\ No newline at end of file
diff --git a/terraform/outputs.tf b/terraform/outputs.tf
new file mode 100644
index 000000000..45167395f
--- /dev/null
+++ b/terraform/outputs.tf
@@ -0,0 +1,19 @@
+output "service_url" {
+  description = "URL of the deployed Cloud Run service"
+  value       = google_cloud_run_v2_service.petclinic.uri
+}
+
+output "service_name" {
+  description = "Name of the Cloud Run service"
+  value       = google_cloud_run_v2_service.petclinic.name
+}
+
+output "artifact_registry_url" {
+  description = "URL of the Artifact Registry repository"
+  value       = "${var.region}-docker.pkg.dev/${var.project_id}/${google_artifact_registry_repository.petclinic.repository_id}"
+}
+
+output "environment" {
+  description = "Deployment environment"
+  value       = var.environment
+}
\ No newline at end of file
diff --git a/terraform/variables.tf b/terraform/variables.tf
new file mode 100644
index 000000000..7943bae61
--- /dev/null
+++ b/terraform/variables.tf
@@ -0,0 +1,57 @@
+variable "project_id" {
+  description = "GCP Project ID"
+  type        = string
+}
+
+variable "region" {
+  description = "GCP Region"
+  type        = string
+  default     = "us-central1"
+}
+
+variable "environment" {
+  description = "Environment name (dev, prod)"
+  type        = string
+  
+  validation {
+    condition     = contains(["dev", "prod"], var.environment)
+    error_message = "Environment must be dev or prod."
+  }
+}
+
+variable "image_tag" {
+  description = "Docker image tag to deploy"
+  type        = string
+  default     = "latest"
+}
+
+# Cloud Run Configuration
+variable "min_instances" {
+  description = "Minimum number of Cloud Run instances"
+  type        = number
+  default     = 0
+}
+
+variable "max_instances" {
+  description = "Maximum number of Cloud Run instances"
+  type        = number
+  default     = 10
+}
+
+variable "cpu_limit" {
+  description = "CPU limit for Cloud Run container"
+  type        = string
+  default     = "1"
+}
+
+variable "memory_limit" {
+  description = "Memory limit for Cloud Run container"
+  type        = string
+  default     = "512Mi"
+}
+
+variable "allow_public_access" {
+  description = "Allow public access to the service"
+  type        = bool
+  default     = true
+}
\ No newline at end of file