diff --git a/.dockerignore b/.dockerignore
new file mode 100644
index 0000000..3309913
--- /dev/null
+++ b/.dockerignore
@@ -0,0 +1,50 @@
+# Python
+__pycache__/
+*.py[cod]
+*$py.class
+*.so
+.Python
+venv/
+env/
+ENV/
+*.egg-info/
+dist/
+build/
+
+# IDE
+.vscode/
+.idea/
+*.swp
+*.swo
+*~
+
+# Git
+.git/
+.gitignore
+
+# Environment files (will be mounted separately)
+.env
+
+# Documentation
+README.md
+
+# CI/CD
+.github/
+
+# Claude
+.claude/
+
+# Instance data (will be mounted as volume)
+src/app/instance/
+src/app/static/images/
+src/app/static/barcodes/
+
+# Test files
+*.pyc
+.pytest_cache/
+.coverage
+htmlcov/
+
+# OS
+.DS_Store
+Thumbs.db
diff --git a/Dockerfile b/Dockerfile
new file mode 100644
index 0000000..e440308
--- /dev/null
+++ b/Dockerfile
@@ -0,0 +1,33 @@
+# Use Python 3.11 slim image as base
+FROM python:3.11-slim
+
+# Set working directory
+WORKDIR /app
+
+# Set environment variables
+ENV PYTHONDONTWRITEBYTECODE=1 \
+    PYTHONUNBUFFERED=1 \
+    FLASK_APP=src/run.py
+
+# Install system dependencies
+RUN apt-get update && apt-get install -y --no-install-recommends \
+    gcc \
+    && rm -rf /var/lib/apt/lists/*
+
+# Copy requirements first for better layer caching
+COPY requirements.txt .
+
+# Install Python dependencies
+RUN pip install --no-cache-dir -r requirements.txt
+
+# Copy application code
+COPY . .
+
+# Create necessary directories for runtime
+RUN mkdir -p src/app/static/images src/app/static/barcodes src/app/instance
+
+# Expose port 5555
+EXPOSE 5555
+
+# Run the application
+CMD ["python", "src/run.py"]
diff --git a/README.md b/README.md
index a725579..ab60f5d 100644
--- a/README.md
+++ b/README.md
@@ -36,6 +36,47 @@ This project is a simple Flask API for demonstrating AR content retrieval for ba
 
 ## Setup
 
+### Option 1: Docker (Recommended)
+
+1. **Clone the Repository:**
+
+```bash
+git clone <repository_url>
+cd <repository_folder>
+```
+
+2. **Configure Environment:**
+
+Copy `.env.example` to `.env` and update with your Azure AD credentials:
+
+```bash
+cp .env.example .env
+```
+
+Edit `.env` and set your Azure AD configuration values.
+
+3. **Run with Docker Compose:**
+
+```bash
+docker-compose up -d
+```
+
+The application will be available at `http://localhost:5555`
+
+4. **View Logs:**
+
+```bash
+docker-compose logs -f
+```
+
+5. **Stop the Application:**
+
+```bash
+docker-compose down
+```
+
+### Option 2: Local Python Setup
+
 1. **Clone the Repository:**
 
 ```bash
@@ -49,23 +90,26 @@ cd <repository_folder>
 pip install -r requirements.txt
 ```
 
-3. **Run the Server:**
+3. **Configure Environment:**
+
+Copy `.env.example` to `.env` and update with your configuration.
+
+4. **Run the Server:**
 
 ```bash
-python app.py
+python src/run.py
 ```
 
-The application will automatically create the necessary directories and initialize the products.json file if it doesn't exist.
+The application will automatically create the necessary directories and initialize the database if it doesn't exist.
 
-4. **Access the Admin Interface:**
+### Accessing the Application
 
-Open your browser and navigate to:
+**Admin Interface:**
 ```
 http://localhost:5555/admin
 ```
 
-5. **Test the Endpoints:**
-
+**API Endpoints:**
 * Login: `GET http://localhost:5555/login`
 * Content Fields: `GET http://localhost:5555/arcontentfields`
 * AR Info (Example): `GET http://localhost:5555/arinfo?barcode=123456`
diff --git a/docker-compose.yml b/docker-compose.yml
new file mode 100644
index 0000000..189a88d
--- /dev/null
+++ b/docker-compose.yml
@@ -0,0 +1,19 @@
+version: '3.8'
+
+services:
+  web:
+    build: .
+    container_name: kcap-demo-server
+    ports:
+      - "5555:5555"
+    environment:
+      - FLASK_DEBUG=1
+    env_file:
+      - .env
+    volumes:
+      # Mount static directories for persistent storage
+      - ./src/app/static/images:/app/src/app/static/images
+      - ./src/app/static/barcodes:/app/src/app/static/barcodes
+      # Mount instance directory for database persistence
+      - ./src/app/instance:/app/src/app/instance
+    restart: unless-stopped