diff --git a/.dockerignore b/.dockerignore
index 7fd795a0..920a34e8 100644
--- a/.dockerignore
+++ b/.dockerignore
@@ -75,3 +75,7 @@ logs/
 # Temporary files
 tmp/
 temp/
+
+# Docker
+docker/Dockerfile*
+docker/docker-compose.yml
diff --git a/.env-example b/.env-example
new file mode 100644
index 00000000..29ad6ac4
--- /dev/null
+++ b/.env-example
@@ -0,0 +1,2 @@
+FLASK_DEBUG=1
+CACHE_REDIS_HOST=redis
\ No newline at end of file
diff --git a/.vscode/settings.json b/.vscode/settings.json
index d99f2f30..3b87ee45 100644
--- a/.vscode/settings.json
+++ b/.vscode/settings.json
@@ -2,5 +2,8 @@
     "[python]": {
         "editor.defaultFormatter": "ms-python.black-formatter"
     },
-    "python.formatting.provider": "none"
+    "python.formatting.provider": "none",
+    "python-envs.defaultEnvManager": "ms-python.python:conda",
+    "python-envs.defaultPackageManager": "ms-python.python:conda",
+    "python-envs.pythonProjects": []
 }
\ No newline at end of file
diff --git a/Makefile b/Makefile
index 31a985ea..4b1ddd9c 100644
--- a/Makefile
+++ b/Makefile
@@ -1,22 +1,26 @@
-install:
+.PHONY: help
+help:  ## Print this message
+	@grep -E '^[a-zA-Z_-]+:.*?## .*$$' $(MAKEFILE_LIST) | sort | awk 'BEGIN {FS = ":.*?## "}; {printf "\033[36m%-24s\033[0m %s\n", $$1, $$2}'
+
+install: ## Install Python dependencies
 	pip install -U -e .[dev]
 
-debug:
-	FLASK_APP=policyengine_household_api.api FLASK_DEBUG=1 flask run --without-threads
+debug: ## Run Flask app with FLASK_DEBUG=1
+	FLASK_APP=policyengine_household_api.api FLASK_DEBUG=1 flask run --without-threads --host=0.0.0.0
 
-test:
+test: ## Run unit tests
 	pytest -vv --timeout=150 -rP tests/to_refactor tests/unit
 
-test-with-auth:
+test-with-auth: ## Run integration tests
 	CONFIG_FILE=config/test_with_auth.yaml pytest -vv --timeout=150 -rP tests/integration_with_auth
 
-debug-test:
+debug-test: ## Run tests with FLASK_DEBUG=1
 	FLASK_DEBUG=1 pytest -vv --durations=0 --timeout=150 -rP tests
 
-format:
+format: ## Run black
 	black . -l 79
 
-deploy:
+deploy: ## Deploy to GCP
 	python gcp/export.py
 	gcloud config set app/cloud_build_timeout 1800
 	cp gcp/policyengine_household_api/* .
@@ -25,9 +29,56 @@ deploy:
 	rm Dockerfile
 	rm .gac.json
 
-changelog:
+changelog: ## Build changelog
 	build-changelog changelog.yaml --output changelog.yaml --update-last-date --start-from 0.1.0 --append-file changelog_entry.yaml
 	build-changelog changelog.yaml --org PolicyEngine --repo policyengine-household-api --output CHANGELOG.md --template .github/changelog_template.md
 	bump-version changelog.yaml setup.py policyengine_household_api/constants.py
 	rm changelog_entry.yaml || true
-	touch changelog_entry.yaml 
\ No newline at end of file
+	touch changelog_entry.yaml
+
+COMPOSE_FILE ?= docker/docker-compose.yml
+COMPOSE_EXTERNAL_FILE ?= docker/docker-compose.external.yml
+DOCKER_IMG ?= policyengine:policyengine-household-api
+DOCKER_NAME ?= policyengine-household-api
+ifeq (, $(shell which docker))
+DOCKER_CONTAINER_ID := docker-is-not-installed
+else
+DOCKER_CONTAINER_ID := $(shell docker ps --filter ancestor=$(DOCKER_IMG) --format "{{.ID}}")
+endif
+DOCKER_NETWORK ?= policyengine-api_default
+DOCKER_CONSOLE ?= policyengine-api-console
+
+.PHONY: docker-build
+docker-build: ## Build the docker image
+	docker compose --file $(COMPOSE_FILE) build --force-rm
+
+.PHONY: docker-run
+docker-run:  ## Run the app as docker container with supporting services
+	docker compose --file $(COMPOSE_FILE) up
+
+.PHONY: docker-run-external
+docker-run-external:  ## Run with external network (for multi-service setups)
+	docker compose --file $(COMPOSE_FILE) --file $(COMPOSE_EXTERNAL_FILE) up
+
+.PHONY: services-start
+services-start:  ## Run the docker containers for supporting services (e.g. Redis)
+	docker compose --file $(COMPOSE_FILE) up -d redis
+
+.PHONY: services-start-external
+services-start-external:  ## Start services with external network
+	docker compose --file $(COMPOSE_FILE) --file $(COMPOSE_EXTERNAL_FILE) up -d redis
+
+.PHONY: services-stop
+services-stop:  ## Stop the docker containers for supporting services
+	docker compose --file $(COMPOSE_FILE) down
+
+.PHONY: docker-network-create
+docker-network-create:  ## Create the external Docker network (for multi-service setups)
+	docker network create $(DOCKER_NETWORK) || true
+
+.PHONY: docker-console
+docker-console:  ## Open a one-off container bash session
+	@docker run -p 8080:5000 -v $(PWD):/code \
+   --network $(DOCKER_NETWORK) \
+   --rm --name $(DOCKER_CONSOLE) -it \
+   $(DOCKER_IMG) bash
\ No newline at end of file
diff --git a/README.md b/README.md
index 20e01c21..da52da01 100644
--- a/README.md
+++ b/README.md
@@ -2,6 +2,54 @@
 
 A version of the PolicyEngine API that runs the `calculate` endpoint over household object. To debug locally, run `make debug`. 
 
+## Local development with Docker Compose
+
+To run this app locally via Docker Compose:
+
+```
+% make docker-build
+% make docker-run
+```
+
+and point your browser at http://localhost:8080 to access the API.
+
+To develop the code locally, you will want to instead start only the Redis docker container and a one-off
+API container, with your local filesystem mounted into the running docker container.
+
+```
+% make services-start
+% make docker-console
+```
+
+Then inside the container, start the Flask service:
+
+```
+policyapi@[your-docker-id]:/code$ make debug
+```
+
+and point your browser at http://localhost:8080 to access the API.
+
+### Running with other PolicyEngine services
+
+If you're running this alongside other PolicyEngine services (e.g., the main API) and need
+containers to communicate across projects, use the external network mode:
+
+```
+% make docker-network-create   # Create shared network (once)
+% make docker-run-external     # Run with external network
+```
+
+This connects the household API to a shared `policyengine-api_default` network that other
+PolicyEngine docker-compose projects can also join.
+
+For development with external networking:
+
+```
+% make docker-network-create
+% make services-start-external
+% make docker-console
+```
+
 ## Development rules
 
 1. Every endpoint should return a JSON object with at least a "status" and "message" field.
diff --git a/changelog_entry.yaml b/changelog_entry.yaml
index e69de29b..6dacd217 100644
--- a/changelog_entry.yaml
+++ b/changelog_entry.yaml
@@ -0,0 +1,6 @@
+- bump: minor
+  changes:
+    added:
+    - Docker Compose support for local development with Redis
+    - Makefile targets for building and running Docker containers
+    - Support for external Docker networks when running alongside other PolicyEngine services
diff --git a/config/README.md b/config/README.md
index 8870a9fd..543188c3 100644
--- a/config/README.md
+++ b/config/README.md
@@ -95,6 +95,16 @@ services:
       - ANTHROPIC_API_KEY=${ANTHROPIC_API_KEY}
 ```
 
+Or, alternately, use the `docker/docker-compose.yml` file and create a `.env` file in your root directory
+to set all environment variables. Example:
+
+```
+% cat .env
+CONFIG_FILE=/code/config/custom.yaml
+DATABASE__PASSWORD=your-secret-password
+ANTHROPIC_API_KEY=your-key-here
+```
+
 #### Kubernetes ConfigMap
 ```yaml
 apiVersion: v1
diff --git a/docker/Dockerfile.api b/docker/Dockerfile.api
new file mode 100644
index 00000000..1bfe1bae
--- /dev/null
+++ b/docker/Dockerfile.api
@@ -0,0 +1,26 @@
+FROM python:3.12
+
+# use root to install pip libs
+USER root
+
+WORKDIR /code
+
+COPY . /code/
+
+ENV PYTHONDONTWRITEBYTECODE 1
+ENV PYTHONUNBUFFERED 1
+
+# can't use make install because we ignore .github/ via .dockerignore
+# and env is set via docker-compose.yml or injection at container run time
+RUN pip install -e ".[dev]" --config-settings editable_mode=compat
+
+# switch to app user
+RUN groupadd policyapi && \
+  useradd -g policyapi policyapi && \
+  apt-get purge -y --auto-remove build-essential && \
+  apt-get -y install make && \
+  chown -R policyapi:policyapi /code
+
+RUN chown -R policyapi:policyapi /usr/local/lib/python3.12/site-packages/policyengine*
+
+USER policyapi
\ No newline at end of file
diff --git a/docker/docker-compose.external.yml b/docker/docker-compose.external.yml
new file mode 100644
index 00000000..7eb1810f
--- /dev/null
+++ b/docker/docker-compose.external.yml
@@ -0,0 +1,17 @@
+# Override file for connecting to an external Docker network.
+# Use this when running alongside other PolicyEngine services.
+#
+# Usage:
+#   make docker-run-external
+#
+# Or manually:
+#   docker compose -f docker/docker-compose.yml -f docker/docker-compose.external.yml up
+#
+# Prerequisites:
+#   The external network must exist. Create it with:
+#   docker network create policyengine-api_default
+
+networks:
+  my_network:
+    name: ${DOCKER_NETWORK:-policyengine-api_default}
+    external: true
diff --git a/docker/docker-compose.yml b/docker/docker-compose.yml
new file mode 100644
index 00000000..394934ce
--- /dev/null
+++ b/docker/docker-compose.yml
@@ -0,0 +1,33 @@
+services:
+  redis:
+    image: "redis:alpine"
+    expose:
+      - "6379"
+    volumes:
+      - redis-data:/data
+    networks:
+      - my_network
+
+  policyengine:
+    build:
+      context: ../
+      dockerfile: docker/Dockerfile.api
+    command: ["/bin/bash", "/code/docker/start.sh"]
+    image: policyengine:policyengine-household-api
+    depends_on:
+      - redis
+    env_file:
+      - ../.env
+    expose:
+      - 8080
+    ports:
+      - "8080:8080"
+    networks:
+      - my_network
+
+volumes:
+  redis-data:
+
+networks:
+  my_network:
+    name: ${DOCKER_NETWORK:-policyengine-api_default}
\ No newline at end of file
diff --git a/docker/start.sh b/docker/start.sh
new file mode 100644
index 00000000..47e5f335
--- /dev/null
+++ b/docker/start.sh
@@ -0,0 +1,13 @@
+#!/bin/bash
+# Environment variables
+PORT="${PORT:-8080}"
+WORKER_COUNT="${WORKER_COUNT:-3}"
+REDIS_PORT="${REDIS_PORT:-6379}"
+
+# Start the API
+gunicorn -b :"$PORT" policyengine_household_api.api --timeout 300 --workers 5 --preload &
+
+# Keep the script running and handle shutdown gracefully
+trap "pkill -P $$; exit 1" INT TERM
+
+wait