diff --git a/samples/rails/.devcontainer/Dockerfile b/samples/rails/.devcontainer/Dockerfile
new file mode 100644
index 00000000..a7f39527
--- /dev/null
+++ b/samples/rails/.devcontainer/Dockerfile
@@ -0,0 +1,4 @@
+ARG RUBY_VERSION=3.3.4
+FROM ghcr.io/rails/devcontainer/images/ruby:$RUBY_VERSION
+
+RUN apt-get update && apt-get install -y postgresql-client libpq-dev
diff --git a/samples/rails/.devcontainer/devcontainer.json b/samples/rails/.devcontainer/devcontainer.json
new file mode 100644
index 00000000..7cc0d8d4
--- /dev/null
+++ b/samples/rails/.devcontainer/devcontainer.json
@@ -0,0 +1,22 @@
+{
+  "build": {
+    "dockerfile": "Dockerfile",
+    "context": "."
+  },
+  "features": {
+    "ghcr.io/defanglabs/devcontainer-feature/defang-cli:1.0.4": {},
+    "ghcr.io/devcontainers/features/docker-in-docker:2": {}
+  },
+  "runArgs": [
+    "--env-file", ".env"
+  ],
+  "appPort": 3000,
+  "forwardPorts": [],
+  "customizations": {
+    "vscode": {
+      "settings": {
+        "remote.autoForwardPorts": false
+      }
+    }
+  }
+}
diff --git a/samples/rails/.env b/samples/rails/.env
new file mode 100644
index 00000000..f85288e6
--- /dev/null
+++ b/samples/rails/.env
@@ -0,0 +1,3 @@
+SECRET_KEY_BASE=example
+POSTGRES_USERNAME=postgres
+POSTGRES_HOST=db
diff --git a/samples/rails/.github/workflows/deploy.yaml b/samples/rails/.github/workflows/deploy.yaml
index 03ea61cd..0b76cb80 100644
--- a/samples/rails/.github/workflows/deploy.yaml
+++ b/samples/rails/.github/workflows/deploy.yaml
@@ -17,4 +17,8 @@ jobs:
       uses: actions/checkout@v4
 
     - name: Deploy
-      uses: DefangLabs/defang-github-action@v1.1.0
\ No newline at end of file
+      uses: DefangLabs/defang-github-action@v1.1.0
+      with:
+        config-env-vars: POSTGRES_PASSWORD
+      env:
+        POSTGRES_PASSWORD: ${{ secrets.POSTGRES_PASSWORD }}
diff --git a/samples/rails/README.md b/samples/rails/README.md
index 16f0b5c3..b44ef8cd 100644
--- a/samples/rails/README.md
+++ b/samples/rails/README.md
@@ -4,27 +4,41 @@
 
 This template is a member list project developed using Ruby on Rails, offering a starting point to help you quickly build your team management system. We have prepared all the essential files for deployment. By spending less than 10 minutes setting up the environment, as detailed in the prerequisites, and executing the commands in our step-by-step guide, your website will be ready to go live to the world!
 
-## NOTE
-
-This sample showcases how you could deploy a full-stack application with Defang in Ruby on Rails. However, it uses a SQLite database, which isn't production-ready and will be reset with every deployment. For production use cases you should use a managed database like RDS, Aiven, or others. If you stick to Rail's default SQLite database, your stored data will be lost on every deployment, and in some other cases. In the future, Defang will help you provision and connect to managed databases.
-
 ## Essential Setup Files
 
 1. A [Dockerfile](https://docs.docker.com/develop/develop-images/dockerfile_best-practices/) to describe the basic image of your applications.
 2. A [docker-compose file](https://docs.defang.io/docs/concepts/compose) to define and run multi-container Docker applications.
 3. A [.dockerignore](https://docs.docker.com/build/building/context/#dockerignore-files) file to comply with the size limit (10MB).
 
-## Prerequisite
+## Development Using [Dev Containers](https://containers.dev/)
+
+1. Open the working directory with Visual Studio Code or any editor which supports Dev Containers.
+2. Click on the bottom left corner of the window where you see "Reopen in Container".
+3. Open up a shell in the VS Code terminal and run `docker compose -f compose.dev.yaml up`.
+
+
+## Configuration
+
+For this sample, you will need to provide the following [configuration](https://docs.defang.io/docs/concepts/configuration). Note that if you are using the 1-click deploy option, you can set these values as secrets in your GitHub repository and the action will automatically deploy them for you.
+
+### `POSTGRES_PASSWORD`
+This password will be used to initialize the PostgreSQL database and to connect to it.
 
-1. Download [Defang CLI](https://github.com/DefangLabs/defang)
-2. If you are using [Defang BYOC](https://docs.defang.io/docs/concepts/defang-byoc), make sure you have properly [authenticated your AWS account](https://docs.aws.amazon.com/cli/latest/userguide/cli-chap-configure.html)
-3. Plus, make sure that you have properly set your environment variables like `AWS_PROFILE`, `AWS_REGION`, `AWS_ACCESS_KEY_ID`, and `AWS_SECRET_ACCESS_KEY`.
 
 ## Deployment
 
-1. Open the terminal and type `defang login`
-2. Type `defang compose up` in the CLI
-3. Now your application will be launched
+> [!NOTE]
+> Download [Defang CLI](https://github.com/DefangLabs/defang)
+
+### Defang Playground
+
+Deploy your application to the defang playground by opening up your terminal and typing `defang up`.
+
+### BYOC (AWS)
+
+If you want to deploy to your own cloud account, you can use Defang BYOC:
+
+1. [Authenticate your AWS account](https://docs.aws.amazon.com/cli/latest/userguide/cli-chap-configure.html), and that you have properly set your environment variables like `AWS_PROFILE`, `AWS_REGION`, `AWS_ACCESS_KEY_ID`, and `AWS_SECRET_ACCESS_KEY`.
 
 ---
 
diff --git a/samples/rails/app/.ruby-version b/samples/rails/app/.ruby-version
index 85588beb..6d5369b9 100644
--- a/samples/rails/app/.ruby-version
+++ b/samples/rails/app/.ruby-version
@@ -1 +1 @@
-ruby-3.0.0
+ruby-3.3.4
diff --git a/samples/rails/app/Dockerfile b/samples/rails/app/Dockerfile
index 92ade196..182bd516 100644
--- a/samples/rails/app/Dockerfile
+++ b/samples/rails/app/Dockerfile
@@ -1,7 +1,7 @@
 # syntax = docker/dockerfile:1
 
 # Make sure RUBY_VERSION matches the Ruby version in .ruby-version and Gemfile
-ARG RUBY_VERSION=3.3.0
+ARG RUBY_VERSION=3.3.4
 FROM ruby:$RUBY_VERSION-slim as base
 
 # Rails app lives here
@@ -18,7 +18,7 @@ FROM base as build
 
 # Install packages needed to build gems
 RUN apt-get update -qq && \
-    apt-get install --no-install-recommends -y build-essential git libvips pkg-config
+    apt-get install --no-install-recommends -y build-essential git libvips pkg-config libpq-dev
 
 # Set bundler config to force ruby platform
 RUN bundle config set force_ruby_platform true
@@ -44,7 +44,7 @@ FROM base
 
 # Install packages needed for deployment
 RUN apt-get update -qq && \
-    apt-get install --no-install-recommends -y curl libsqlite3-0 libvips && \
+    apt-get install --no-install-recommends -y curl libvips libpq-dev && \
     rm -rf /var/lib/apt/lists /var/cache/apt/archives
 
 # Copy built artifacts: gems, application
diff --git a/samples/rails/app/Dockerfile.dev b/samples/rails/app/Dockerfile.dev
new file mode 100644
index 00000000..8a9759e8
--- /dev/null
+++ b/samples/rails/app/Dockerfile.dev
@@ -0,0 +1,36 @@
+# Make sure RUBY_VERSION matches the Ruby version in .ruby-version and Gemfile
+ARG RUBY_VERSION=3.3.4
+FROM ruby:$RUBY_VERSION-slim
+
+# Rails app lives here
+WORKDIR /rails
+
+# Set development environment
+ENV RAILS_ENV="development" \
+    BUNDLE_PATH="/usr/local/bundle" \
+    PORT=3000
+
+# Install packages needed to build gems
+RUN apt-get update -qq && \
+    apt-get install --no-install-recommends -y build-essential git libvips pkg-config libpq-dev postgresql-client
+
+# Set bundler config to force ruby platform
+RUN bundle config set force_ruby_platform true
+
+# Install application gems
+COPY Gemfile Gemfile.lock ./
+RUN bundle install && \
+    rm -rf ~/.bundle/ "${BUNDLE_PATH}"/ruby/*/cache "${BUNDLE_PATH}"/ruby/*/bundler/gems/*/.git && \
+    bundle exec bootsnap precompile --gemfile
+
+# Copy application code
+COPY . .
+
+RUN ls /rails
+
+# Entrypoint prepares the database.
+ENTRYPOINT ["/rails/bin/docker-entrypoint"]
+
+# Start the server by default, this can be overwritten at runtime
+EXPOSE 3000
+CMD ["./bin/rails", "server", "-b", "0.0.0.0"]
diff --git a/samples/rails/app/Gemfile b/samples/rails/app/Gemfile
index 5a1c90aa..bfc667e5 100644
--- a/samples/rails/app/Gemfile
+++ b/samples/rails/app/Gemfile
@@ -1,6 +1,6 @@
 source "https://rubygems.org"
 
-ruby "3.3.0"
+ruby "3.3.4"
 
 # Bundle edge Rails instead: gem "rails", github: "rails/rails", branch: "main"
 gem "rails", "~> 7.1.3", ">= 7.1.3.2"
@@ -8,8 +8,8 @@ gem "rails", "~> 7.1.3", ">= 7.1.3.2"
 # The original asset pipeline for Rails [https://github.com/rails/sprockets-rails]
 gem "sprockets-rails"
 
-# Use sqlite3 as the database for Active Record
-gem "sqlite3", "~> 1.4"
+# Use postgres as the database for Active Record
+gem "pg", "~> 1.5"
 
 # Use the Puma web server [https://github.com/puma/puma]
 gem "puma", ">= 5.0"
@@ -49,6 +49,7 @@ gem 'devise', '~> 4.9', '>= 4.9.4'
 group :development, :test do
   # See https://guides.rubyonrails.org/debugging_rails_applications.html#debugging-with-the-debug-gem
   gem "debug", platforms: %i[ mri mswin mswin64 mingw x64_mingw ]
+  gem "dotenv-rails", "~> 3.1"
 end
 
 group :development do
diff --git a/samples/rails/app/Gemfile.lock b/samples/rails/app/Gemfile.lock
index c4179d0a..18420c8e 100644
--- a/samples/rails/app/Gemfile.lock
+++ b/samples/rails/app/Gemfile.lock
@@ -106,6 +106,10 @@ GEM
       railties (>= 4.1.0)
       responders
       warden (~> 1.2.3)
+    dotenv (3.1.2)
+    dotenv-rails (3.1.2)
+      dotenv (= 3.1.2)
+      railties (>= 6.1)
     drb (2.2.1)
     erubi (1.12.0)
     globalid (1.2.1)
@@ -152,6 +156,7 @@ GEM
       mini_portile2 (~> 2.8.2)
       racc (~> 1.4)
     orm_adapter (0.5.0)
+    pg (1.5.8)
     psych (5.1.2)
       stringio
     public_suffix (5.0.5)
@@ -218,8 +223,6 @@ GEM
       actionpack (>= 5.2)
       activesupport (>= 5.2)
       sprockets (>= 3.0.0)
-    sqlite3 (1.7.3)
-      mini_portile2 (~> 2.8.0)
     stimulus-rails (1.3.3)
       railties (>= 6.0.0)
     stringio (3.1.0)
@@ -255,20 +258,21 @@ DEPENDENCIES
   capybara
   debug
   devise (~> 4.9, >= 4.9.4)
+  dotenv-rails (~> 3.1)
   importmap-rails
   jbuilder
+  pg (~> 1.5)
   puma (>= 5.0)
   rails (~> 7.1.3, >= 7.1.3.2)
   selenium-webdriver
   sprockets-rails
-  sqlite3 (~> 1.4)
   stimulus-rails
   turbo-rails
   tzinfo-data
   web-console
 
 RUBY VERSION
-   ruby 3.3.0p0
+   ruby 3.3.4p94
 
 BUNDLED WITH
    2.2.3
diff --git a/samples/rails/app/bin/docker-entrypoint b/samples/rails/app/bin/docker-entrypoint
index 67ef4931..3cfa13b6 100755
--- a/samples/rails/app/bin/docker-entrypoint
+++ b/samples/rails/app/bin/docker-entrypoint
@@ -5,4 +5,6 @@ if [ "${1}" == "./bin/rails" ] && [ "${2}" == "server" ]; then
   ./bin/rails db:prepare
 fi
 
+rm -f tmp/pids/server.pid
+
 exec "${@}"
diff --git a/samples/rails/app/config/database.yml b/samples/rails/app/config/database.yml
index 796466ba..863b8431 100644
--- a/samples/rails/app/config/database.yml
+++ b/samples/rails/app/config/database.yml
@@ -1,25 +1,23 @@
-# SQLite. Versions 3.8.0 and up are supported.
-#   gem install sqlite3
-#
-#   Ensure the SQLite 3 gem is defined in your Gemfile
-#   gem "sqlite3"
-#
 default: &default
-  adapter: sqlite3
+  adapter: postgresql
   pool: <%= ENV.fetch("RAILS_MAX_THREADS") { 5 } %>
+  username: <%= ENV["POSTGRES_USERNAME"] %>
+  password: <%= ENV["POSTGRES_PASSWORD"] %>
+  host: <%= ENV["POSTGRES_HOST"] %>
+  port: 5432
   timeout: 5000
 
 development:
   <<: *default
-  database: storage/development.sqlite3
+  database: rails_development
 
 # Warning: The database defined as "test" will be erased and
 # re-generated from your development database when you run "rake".
 # Do not set this db to the same as development or production.
 test:
   <<: *default
-  database: storage/test.sqlite3
+  database: rails_test
 
 production:
   <<: *default
-  database: storage/production.sqlite3
+  database: rails_production
diff --git a/samples/rails/app/db/schema.rb b/samples/rails/app/db/schema.rb
index 0b9188e8..42981be4 100644
--- a/samples/rails/app/db/schema.rb
+++ b/samples/rails/app/db/schema.rb
@@ -11,6 +11,9 @@
 # It's strongly recommended that you check this file into your version control system.
 
 ActiveRecord::Schema[7.1].define(version: 2024_04_18_210923) do
+  # These are extensions that must be enabled in order to support this database
+  enable_extension "plpgsql"
+
   create_table "members", force: :cascade do |t|
     t.string "first_name"
     t.string "last_name"
diff --git a/samples/rails/compose.dev.yaml b/samples/rails/compose.dev.yaml
new file mode 100644
index 00000000..371e4317
--- /dev/null
+++ b/samples/rails/compose.dev.yaml
@@ -0,0 +1,25 @@
+services:
+  rails:
+    extends:
+      file: compose.yaml
+      service: rails
+    build:
+      context: ./app
+      dockerfile: Dockerfile.dev
+    env_file:
+      - .env
+    environment:
+      - POSTGRES_PASSWORD=secret
+    ports:
+      - "3000:3000"
+    volumes:
+      - ./app:/rails/
+
+  db:
+    extends:
+      file: compose.yaml
+      service: db
+    volumes:
+      - db-data:/var/lib/postgresql/data
+volumes:
+  db-data:
diff --git a/samples/rails/compose.yaml b/samples/rails/compose.yaml
index 6b81dfb8..6452117f 100644
--- a/samples/rails/compose.yaml
+++ b/samples/rails/compose.yaml
@@ -1,15 +1,42 @@
 services:
   rails:
+    # uncomment to add your own domain
+    # domainname: example.com
     restart: unless-stopped
     build:
       context: ./app
       dockerfile: Dockerfile
+    env_file:
+      - .env
     environment:
-      SECRET_KEY_BASE: example # set your own key here.
+      POSTGRES_PASSWORD:
     ports:
       - mode: ingress
         target: 3000
     deploy:
       resources:
         reservations:
-          memory: 1GB
\ No newline at end of file
+          memory: 1GB
+    healthcheck:
+      test: ["CMD", "curl", "-f", "http://localhost:3000"]
+      interval: 10s
+      timeout: 5s
+      retries: 5
+  db:
+    restart: unless-stopped
+    image: postgres:16
+    x-defang-postgres: true
+    environment:
+      POSTGRES_PASSWORD:
+    ports:
+      - mode: host
+        target: 5432
+    healthcheck:
+      test: ["CMD-SHELL", "pg_isready -U postgres"]
+      interval: 10s
+      timeout: 5s
+      retries: 5
+    deploy:
+      resources:
+        reservations:
+          memory: 1GB
diff --git a/starter-sample/README.md b/starter-sample/README.md
index 24df7e5c..e62054dd 100644
--- a/starter-sample/README.md
+++ b/starter-sample/README.md
@@ -6,7 +6,7 @@ This is a sample that shows the rough structure of an actual Defang sample. This
 
 ## Prerequisites
 
-1. Download [Defang CLI](https://github.com/DefangLabs/defang)
+1. [!NOTE] Download [Defang CLI](https://github.com/DefangLabs/defang)
 2. (Optional) If you are using [Defang BYOC](https://docs.aws.amazon.com/cli/latest/userguide/cli-chap-configure.html) authenticated with your AWS account
 3. (Optional for local development) [Docker CLI](https://docs.docker.com/engine/install/)
 
@@ -27,13 +27,21 @@ For this sample, you will need to provide the following [configuration](https://
 ### `API_KEY` #REMOVE_ME_AFTER_EDITING
 An explanation of what the env var (`API_KEY`) is, etc.
 
+## Deployment
 
-## Deploying
+> [!NOTE]
+> Download [Defang CLI](https://github.com/DefangLabs/defang)
 
-1. Open the terminal and type `defang login`
-2. Use the [`defang config`](https://docs.defang.io/docs/concepts/compose#configuration) command to setup environment variables. #REMOVE_ME_AFTER_EDITING
-3. Type `defang compose up` in the CLI.
-4. Your app will be running within a few minutes.
+### Defang Playground
+
+Deploy your application to the defang playground by opening up your terminal and typing `defang up`.
+
+### BYOC (AWS)
+
+If you want to deploy to your own cloud account, you can use Defang BYOC:
+
+1. [Authenticate your AWS account](https://docs.aws.amazon.com/cli/latest/userguide/cli-chap-configure.html), and that you have properly set your environment variables like `AWS_PROFILE`, `AWS_REGION`, `AWS_ACCESS_KEY_ID`, and `AWS_SECRET_ACCESS_KEY`.
+2. Run `defang up` in a terminal that has access to your AWS environment variables.
 
 ---