diff --git a/.env.default b/.env.default
new file mode 100644
index 000000000..b78b5599a
--- /dev/null
+++ b/.env.default
@@ -0,0 +1,18 @@
+# Please copy and rename this file.
+#
+# !Attention!
+# Always ensure to load the env variables in every terminal session.
+# Otherwise the env variables will not be available
+
+DOCKER_COMPOSE_APP_DEV_PORT_PUBLISHED=9001
+DOCKER_COMPOSE_APP_DEV_PORT_TARGET=9001
+
+# IMPORTANT: When the env var DEFAULT_PAD_TEXT is unset or empty, then the pad is not established (not the landing page).
+# The env var DEFAULT_PAD_TEXT seems to be mandatory in the latest version of etherpad.
+DOCKER_COMPOSE_APP_DEV_ENV_DEFAULT_PAD_TEXT="Welcome to etherpad"
+
+DOCKER_COMPOSE_APP_DEV_ADMIN_PASSWORD=
+
+DOCKER_COMPOSE_POSTGRES_DEV_ENV_POSTGRES_DATABASE=db
+DOCKER_COMPOSE_POSTGRES_DEV_ENV_POSTGRES_PASSWORD=etherpad-lite-password
+DOCKER_COMPOSE_POSTGRES_DEV_ENV_POSTGRES_USER=etherpad-lite-user
\ No newline at end of file
diff --git a/.github/workflows/docker.yml b/.github/workflows/docker.yml
index 9909d9583..2edf31cee 100644
--- a/.github/workflows/docker.yml
+++ b/.github/workflows/docker.yml
@@ -30,6 +30,7 @@ jobs:
         uses: docker/build-push-action@v5
         with:
           context: .
+          target: production
           load: true
           tags: ${{ env.TEST_TAG }}
           cache-from: type=gha
@@ -97,6 +98,7 @@ jobs:
         uses: docker/build-push-action@v5
         with:
           context: .
+          target: production
           platforms: linux/amd64,linux/arm64
           push: true
           tags: ${{ steps.meta.outputs.tags }}
diff --git a/.gitignore b/.gitignore
index cb81fbc85..5364f4397 100644
--- a/.gitignore
+++ b/.gitignore
@@ -6,6 +6,7 @@ node_modules
 APIKEY.txt
 SESSIONKEY.txt
 var/dirty.db
+.env
 *~
 *.patch
 npm-debug.log
diff --git a/Dockerfile b/Dockerfile
index ff6417001..a50d6bca5 100644
--- a/Dockerfile
+++ b/Dockerfile
@@ -4,7 +4,7 @@
 #
 # Author: muxator
 
-FROM node:alpine AS builder
+FROM node:alpine as build
 LABEL maintainer="Etherpad team, https://github.com/ether/etherpad-lite"
 
 ARG TIMEZONE=
@@ -44,11 +44,6 @@ ARG INSTALL_ABIWORD=
 #   INSTALL_LIBREOFFICE=true
 ARG INSTALL_SOFFICE=
 
-# By default, Etherpad container is built and run in "production" mode. This is
-# leaner (development dependencies are not installed) and runs faster (among
-# other things, assets are minified & compressed).
-ENV NODE_ENV=production
-ENV ETHERPAD_PRODUCTION=true
 # Install dependencies required for modifying access.
 RUN apk add shadow bash
 # Follow the principle of least privilege: run as unprivileged user.
@@ -63,9 +58,6 @@ ARG EP_UID=5001
 ARG EP_GID=0
 ARG EP_SHELL=
 
-ARG NODE_ENV
-ENV NODE_ENV=${NODE_ENV:-production}
-
 RUN groupadd --system ${EP_GID:+--gid "${EP_GID}" --non-unique} etherpad && \
     useradd --system ${EP_UID:+--uid "${EP_UID}" --non-unique} --gid etherpad \
         ${EP_HOME:+--home-dir "${EP_HOME}"} --create-home \
@@ -74,7 +66,6 @@ RUN groupadd --system ${EP_GID:+--gid "${EP_GID}" --non-unique} etherpad && \
 ARG EP_DIR=/opt/etherpad-lite
 RUN mkdir -p "${EP_DIR}" && chown etherpad:etherpad "${EP_DIR}"
 
-USER root
 # the mkdir is needed for configuration of openjdk-11-jre-headless, see
 # https://bugs.debian.org/cgi-bin/bugreport.cgi?bug=863199
 RUN  \
@@ -92,7 +83,31 @@ USER etherpad
 
 WORKDIR "${EP_DIR}"
 
-COPY --chown=etherpad:etherpad ./ ./
+# etherpads version feature requires this. Only copy what is really needed
+COPY --chown=etherpad:etherpad ./.git/HEAD ./.git/HEAD
+COPY --chown=etherpad:etherpad ./.git/refs ./.git/refs
+COPY --chown=etherpad:etherpad ${SETTINGS} ./settings.json
+COPY --chown=etherpad:etherpad ./var ./var
+COPY --chown=etherpad:etherpad ./node_modules ./node_modules
+
+FROM build as development
+
+COPY --chown=etherpad:etherpad ./src/package.json .npmrc ./src/pnpm-lock.yaml ./src/
+COPY --chown=etherpad:etherpad ./src/bin ./src/bin
+
+RUN { [ -z "${ETHERPAD_PLUGINS}" ] || \
+      pnpm install --no-save --legacy-peer-deps ${ETHERPAD_PLUGINS}; } && \
+    src/bin/installDeps.sh
+
+FROM build as production
+
+# By default, Etherpad container is built and run in "production" mode. This is
+# leaner (development dependencies are not installed) and runs faster (among
+# other things, assets are minified & compressed).
+ENV NODE_ENV=production
+ENV ETHERPAD_PRODUCTION=true
+
+COPY --chown=etherpad:etherpad ./src ./src
 
 # Plugins must be installed before installing Etherpad's dependencies, otherwise
 # npm will try to hoist common dependencies by removing them from
@@ -103,7 +118,7 @@ COPY --chown=etherpad:etherpad ./ ./
 # seems to confuse tools such as `npm outdated`, `npm update`, and some ESLint
 # rules.
 RUN { [ -z "${ETHERPAD_PLUGINS}" ] || \
-      npm install --no-save --legacy-peer-deps ${ETHERPAD_PLUGINS}; } && \
+      pnpm install --no-save --legacy-peer-deps ${ETHERPAD_PLUGINS}; } && \
     src/bin/installDeps.sh && \
     rm -rf ~/.npm
 
@@ -111,15 +126,13 @@ RUN { [ -z "${ETHERPAD_PLUGINS}" ] || \
 COPY --chown=etherpad:etherpad ${SETTINGS} "${EP_DIR}"/settings.json
 
 # Fix group permissions
-#RUN chmod -R g=u .
-
-USER root
+# Note: For some reason increases image size from 257 to 334.
+# RUN chmod -R g=u .
 
 USER etherpad
 
-WORKDIR /opt/etherpad-lite
-
 HEALTHCHECK --interval=5s --timeout=3s \
-    CMD curl --silent http://localhost:9001/health | grep -E "pass|ok|up" > /dev/null || exit 1
+  CMD curl --silent http://localhost:9001/health | grep -E "pass|ok|up" > /dev/null || exit 1
+
 EXPOSE 9001
 CMD ["npm", "run", "prod", "--prefix", "./src"]
diff --git a/doc/docker.adoc b/doc/docker.adoc
index 5f4b78120..ec5277f80 100644
--- a/doc/docker.adoc
+++ b/doc/docker.adoc
@@ -20,6 +20,37 @@ If you want to use a personalized settings file, **you will have to rebuild your
 All of the following instructions are as a member of the `docker` group.
 By default, the Etherpad Docker image is built and run in `production` mode: no development dependencies are installed, and asset bundling speeds up page load time.
 
+=== Building and running with docker compose
+A docker compose file is provided in the project. Please first copy `.env.default` to `.env` and adjust the variables to your preference.
+
+```
+docker compose up -d # will build and start the docker container on port 9001 with development settings.
+```
+
+Starting dev server:
+
+```
+docker compose exec app bash -c "./src/bin/run.sh"
+```
+
+For production, please create your own docker compose file and change the `target` property in the build section to `production`. In addition, change the NODE_ENV in environment to production. For instance:
+
+```
+docker compose -f docker-compose-production.yml up -d
+```
+
+For plugins, please add them in the build section under ETHERPAD_PLUGINS, for instance:
+
+```
+     args:
+        ETHERPAD_PLUGINS: >-
+          ep_image_upload
+          ep_embedded_hyperlinks2
+          ep_headings2
+          ep_align
+					...
+```
+
 ==== Rebuilding with custom settings
 Edit `<BASEDIR>/settings.json.docker` at your will. When rebuilding the image, this file will be copied inside your image and renamed to `settings.json`.
 
diff --git a/docker-compose.yml b/docker-compose.yml
new file mode 100644
index 000000000..bb4ac85ee
--- /dev/null
+++ b/docker-compose.yml
@@ -0,0 +1,64 @@
+version: "3.8"
+
+# Add this file to extend the docker-compose setup, e.g.:
+# docker-compose build --no-cache
+# docker-compose up -d --build --force-recreate
+
+services:
+  app:
+    build:
+      context: .
+      args:
+        ETHERPAD_PLUGINS:
+      # change from development to production if needed
+      target: development
+    tty: true
+    stdin_open: true
+    volumes:
+      - ./src:/opt/etherpad-lite/src
+      - node_modules:/opt/etherpad-lite/src/node_modules
+      - pnpm-store:/home/etherpad/.local/share/pnpm/store/v3
+    depends_on:
+      - postgres
+    environment:
+      # change from development to production if needed
+      NODE_ENV: development
+      ADMIN_PASSWORD: ${DOCKER_COMPOSE_APP_DEV_ADMIN_PASSWORD}
+      DB_CHARSET: ${DOCKER_COMPOSE_APP_DEV_ENV_DB_CHARSET:-utf8mb4}
+      DB_HOST: postgres
+      DB_NAME: ${DOCKER_COMPOSE_POSTGRES_DEV_ENV_POSTGRES_DATABASE:?}
+      DB_PASS: ${DOCKER_COMPOSE_POSTGRES_DEV_ENV_POSTGRES_PASSWORD:?}
+      DB_PORT: ${DOCKER_COMPOSE_POSTGRES_DEV_ENV_POSTGRES_PORT:-5432}
+      DB_TYPE: "postgres"
+      DB_USER: ${DOCKER_COMPOSE_POSTGRES_DEV_ENV_POSTGRES_USER:?}
+      # For now, the env var DEFAULT_PAD_TEXT cannot be unset or empty; it seems to be mandatory in the latest version of etherpad
+      DEFAULT_PAD_TEXT: ${DOCKER_COMPOSE_APP_DEV_ENV_DEFAULT_PAD_TEXT:- }
+      DISABLE_IP_LOGGING: ${DOCKER_COMPOSE_APP_DEV_ENV_DISABLE_IP_LOGGING:-true}
+      SOFFICE: ${DOCKER_COMPOSE_APP_DEV_ENV_SOFFICE:-null}
+      TRUST_PROXY: ${DOCKER_COMPOSE_APP_DEV_ENV_TRUST_PROXY:-true}
+    restart: always
+    ports:
+      - "${DOCKER_COMPOSE_APP_DEV_PORT_PUBLISHED:-9001}:${DOCKER_COMPOSE_APP_DEV_PORT_TARGET:-9001}"
+
+  postgres:
+    image: postgres:15-alpine
+    # Pass config parameters to the mysql server.
+    # Find more information below when you need to generate the ssl-relevant file your self
+    environment:
+      POSTGRES_DB: ${DOCKER_COMPOSE_POSTGRES_DEV_ENV_POSTGRES_DATABASE:?}
+      POSTGRES_PASSWORD: ${DOCKER_COMPOSE_POSTGRES_DEV_ENV_POSTGRES_PASSWORD:?}
+      POSTGRES_PORT: ${DOCKER_COMPOSE_POSTGRES_DEV_ENV_POSTGRES_PORT:-5432}
+      POSTGRES_USER: ${DOCKER_COMPOSE_POSTGRES_DEV_ENV_POSTGRES_USER:?}
+      PGDATA: /var/lib/postgresql/data/pgdata
+    restart: always
+    # Exposing the port is not needed unless you want to access this database instance from the host.
+    # Be careful when other postgres docker container are running on the same port
+    # ports:
+    #   - "5432:5432"
+    volumes:
+      - postgres_data:/var/lib/postgresql/data/pgdata
+
+volumes:
+  postgres_data:
+  node_modules:
+  pnpm-store:
\ No newline at end of file