diff --git a/Dockerfile b/Dockerfile
new file mode 100644
index 000000000..ed5429bb8
--- /dev/null
+++ b/Dockerfile
@@ -0,0 +1,60 @@
+# Multi-stage Dockerfile for Spring PetClinic
+# Stage 1: Build
+FROM eclipse-temurin:21-jdk-jammy AS builder
+
+WORKDIR /app
+
+# Copy Maven wrapper and pom.xml for dependency caching
+COPY .mvn/ .mvn/
+COPY mvnw pom.xml ./
+
+# Download dependencies
+RUN ./mvnw dependency:go-offline -B
+
+# Copy source code
+COPY src ./src
+
+# Build application
+RUN ./mvnw clean package -DskipTests -B
+
+# Extract JAR layers for better caching
+RUN mkdir -p target/extracted && \
+    java -Djarmode=layertools -jar target/*.jar extract --destination target/extracted
+
+# Stage 2: Runtime
+FROM eclipse-temurin:21-jre-jammy
+
+# Install curl for health checks
+RUN apt-get update && \
+    apt-get install -y --no-install-recommends curl && \
+    apt-get clean && \
+    rm -rf /var/lib/apt/lists/*
+
+# Create non-root user
+RUN groupadd -r spring && useradd -r -g spring spring
+
+WORKDIR /app
+
+# Copy extracted layers from builder
+COPY --from=builder /app/target/extracted/dependencies/ ./
+COPY --from=builder /app/target/extracted/spring-boot-loader/ ./
+COPY --from=builder /app/target/extracted/snapshot-dependencies/ ./
+COPY --from=builder /app/target/extracted/application/ ./
+
+# Change ownership
+RUN chown -R spring:spring /app
+
+# Switch to non-root user
+USER spring:spring
+
+EXPOSE 8080
+
+# Health check
+HEALTHCHECK --interval=30s --timeout=3s --start-period=60s --retries=3 \
+    CMD curl -f http://localhost:8080/actuator/health || exit 1
+
+# JVM options for containers
+ENV JAVA_OPTS="-XX:+UseContainerSupport -XX:MaxRAMPercentage=75.0"
+
+# Run application
+ENTRYPOINT ["sh", "-c", "java $JAVA_OPTS org.springframework.boot.loader.launch.JarLauncher"]
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diff --git a/docker-compose.yml b/docker-compose.yml
index b2313a1e6..8dd63798a 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -1,21 +1,73 @@
+version: '3.9'
+
 services:
+  petclinic:
+    build:
+      context: .
+      dockerfile: Dockerfile
+    image: petclinic:local
+    container_name: petclinic-app
+    ports:
+      - "8080:8080"
+    environment:
+      - SPRING_PROFILES_ACTIVE=postgres
+      - SPRING_DATASOURCE_URL=jdbc:postgresql://postgres:5432/petclinic
+      - SPRING_DATASOURCE_USERNAME=petclinic
+      - SPRING_DATASOURCE_PASSWORD=petclinic
+      - JAVA_OPTS=-XX:MaxRAMPercentage=75.0
+    depends_on:
+      postgres:
+        condition: service_healthy
+    healthcheck:
+      test: ["CMD", "curl", "-f", "http://localhost:8080/actuator/health"]
+      interval: 30s
+      timeout: 10s
+      retries: 3
+      start_period: 60s
+    networks:
+      - petclinic-network
+
+  # MySQL Database
   mysql:
-    image: mysql:9.5
+    image: mysql:9.2
+    container_name: petclinic-mysql
     ports:
       - "3306:3306"
     environment:
-      - MYSQL_ROOT_PASSWORD=
-      - MYSQL_ALLOW_EMPTY_PASSWORD=true
+      - MYSQL_ROOT_PASSWORD=root
       - MYSQL_USER=petclinic
       - MYSQL_PASSWORD=petclinic
       - MYSQL_DATABASE=petclinic
     volumes:
       - "./conf.d:/etc/mysql/conf.d:ro"
+      - mysql-data:/var/lib/mysql
+    networks:
+      - petclinic-network
+
+  # PostgreSQL Database 
   postgres:
-    image: postgres:18.1
+    image: postgres:15-alpine
+    container_name: petclinic-postgres
     ports:
       - "5432:5432"
     environment:
-      - POSTGRES_PASSWORD=petclinic
-      - POSTGRES_USER=petclinic
       - POSTGRES_DB=petclinic
+      - POSTGRES_USER=petclinic
+      - POSTGRES_PASSWORD=petclinic
+    volumes:
+      - postgres-data:/var/lib/postgresql/data
+    healthcheck:
+      test: ["CMD-SHELL", "pg_isready -U petclinic -d petclinic"]
+      interval: 10s
+      timeout: 5s
+      retries: 5
+    networks:
+      - petclinic-network
+
+networks:
+  petclinic-network:
+    driver: bridge
+
+volumes:
+  mysql-data:
+  postgres-data:
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