diff --git a/.dockerignore b/.dockerignore
new file mode 100644
index 00000000..1380c2e7
--- /dev/null
+++ b/.dockerignore
@@ -0,0 +1,2 @@
+node_modules
+.next
\ No newline at end of file
diff --git a/.env.example b/.env.example
index 03efbc11..017e845c 100644
--- a/.env.example
+++ b/.env.example
@@ -2,6 +2,10 @@
 # Database 
 #
 DATABASE_URL="postgres://postgres:password@localhost:5432/postgres"
+# 
+# Use Below if you are using docker
+# DATABASE_URL="postgresql://postgres:postgres@job-board-db:5432/job-board-db"
+# POSTGRES_URL="postgresql://postgres:postgres@job-board-db:5432/job-board-db"
 #
 # AUTH 
 #
diff --git a/Dockerfile.dev b/Dockerfile.dev
new file mode 100644
index 00000000..a159aac7
--- /dev/null
+++ b/Dockerfile.dev
@@ -0,0 +1,15 @@
+FROM node:20-alpine AS base
+WORKDIR /app
+COPY package*.json ./
+
+FROM base AS development-dependencies
+RUN npm ci
+COPY prisma ./prisma
+RUN npx prisma generate
+
+FROM base AS development
+COPY --from=development-dependencies /app/node_modules ./node_modules
+COPY . .
+
+EXPOSE 3000
+CMD ["npm", "run", "dev:docker"]
\ No newline at end of file
diff --git a/README.md b/README.md
index d64fa79f..7507d75c 100644
--- a/README.md
+++ b/README.md
@@ -42,7 +42,9 @@ Follow these steps to set up the repository locally and run it.
    # Database
    #
    DATABASE_URL="postgres://postgres:password@localhost:5432/postgres"
-
+   # 
+   # Use Below if you are using docker
+   # DATABASE_URL="postgresql://postgres:postgres@job-board-db:5432/job-board-db"
    #
    # AUTH
    #
@@ -86,7 +88,7 @@ Follow these steps to set up the repository locally and run it.
 ### Running the Project with Docker
 
 ```bash
-docker compose up --build
+docker compose up --watch
 ```
 
 ### Running the Project without Docker
diff --git a/docker-compose.yaml b/docker-compose.yaml
index 7d0f3826..63194e15 100644
--- a/docker-compose.yaml
+++ b/docker-compose.yaml
@@ -1,17 +1,26 @@
 services:
   app:
     build:
-      dockerfile: Dockerfile
+      dockerfile: Dockerfile.dev
       target: development # Change this to production for prod builds (WIP)
     container_name: job-board-app
     environment:
       - DATABASE_URL=$DATABASE_URL
       - AUTH_SECRET=$AUTH_SECRET
+      - CHOKIDAR_USEPOLLING=true
+    env_file:
+      - ./.env
     ports:
       - "3000:3000"
-    volumes:
-      - .:/usr/src/app
-      - /usr/src/app/node_modules
+    develop:
+      watch:
+        - action: sync
+          path: ./src
+          target: /app/src
+          ignore:
+            - node_modules
+        - action: rebuild
+          path: ./package.json
     depends_on:
       db:
         condition: service_healthy
@@ -29,7 +38,7 @@ services:
     volumes:
       - postgres-data:/var/lib/postgresql/data
     healthcheck:
-      test: ["CMD-SHELL", "pg_isready -d $${POSTGRES_DB} -U $${POSTGRES_USER}"]
+      test: [ "CMD-SHELL", "pg_isready -d $${POSTGRES_DB} -U $${POSTGRES_USER}" ]
       interval: 10s
       timeout: 5s
       retries: 5
@@ -39,11 +48,11 @@ services:
     image: timothyjmiller/prisma-studio:latest
     restart: unless-stopped
     env_file:
-     - .env
+     - ./.env
     depends_on:
       - app
     ports:
       - 5555:5555
 
 volumes:
-  postgres-data:
\ No newline at end of file
+  postgres-data:
diff --git a/package.json b/package.json
index b4e4a018..0a3800e0 100644
--- a/package.json
+++ b/package.json
@@ -8,7 +8,7 @@
     "build": "next build",
     "start": "next start",
     "lint": "next lint",
-    "dev:docker": "npm run db:seed & next dev",
+    "dev:docker": "npm run db:seed &&  next dev",
     "db:seed": "npx prisma db push && node --loader ts-node/esm prisma/seed.ts",
     "db:studio": "npx prisma studio",
     "check": "prettier --check \"**/*.{ts,tsx,js,jsx,md,mdx,css}\"",