diff --git a/.env b/.env
index 6aaa6ca..419976f 100644
--- a/.env
+++ b/.env
@@ -1,11 +1 @@
 INVARIANT_API_URL=https://explorer.invariantlabs.ai
-
-# For the testing stack only
-# TODO: Check if these can be removed.
-# Currently we rely on the `invariant explorer` command
-# to setup a local instance of explorer to test the proxy.
-# That requires these variables to be set in the .env file.
-POSTGRES_USER=postgres
-POSTGRES_PASSWORD=postgres
-POSTGRES_DB=invariantmonitor
-POSTGRES_HOST=database
\ No newline at end of file
diff --git a/run.sh b/run.sh
index ce3dfc3..6a06d77 100755
--- a/run.sh
+++ b/run.sh
@@ -22,20 +22,45 @@ down() {
 
 
 tests() {
-    # Run tests
-    pip install invariant-ai
-    invariant explorer up -d --build
+  echo "Setting up test environment..."
 
-    until curl -X GET -I http://127.0.0.1/api/v1 --fail --silent --output /dev/null; do
-      echo "Backend API not available yet - checking health..."
-      sleep 2
-    done
+  # Ensure test network exists
+  docker network inspect invariant-explorer-web-test >/dev/null 2>&1 || \
+    docker network create invariant-explorer-web-test
 
-    echo "Backend API is available. Running tests..."
+  # Setup the explorer.test.yml file
+  CONFIG_DIR="/tmp/invariant-proxy-test/configs"
+  FILE="$CONFIG_DIR/explorer.test.yml"
+  mkdir -p "$CONFIG_DIR"
+  # Download the file
+  curl -L -o "$FILE" https://raw.githubusercontent.com/invariantlabs-ai/explorer/main/configs/explorer.test.yml
+  # Verify if the file exists
+  if [ ! -f "$FILE" ]; then
+    echo "Error: File $FILE not found. Issue with download."
+    exit 1
+  fi
+  echo "File successfully downloaded: $FILE"
 
-    docker build -t 'explorer-proxy-test' -f ./tests/Dockerfile.test ./tests
+  # Start containers
+  docker compose -f tests/docker-compose.test.yml down
+  docker compose -f tests/docker-compose.test.yml build
+  docker compose -f tests/docker-compose.test.yml up -d
 
-    docker run \
+  until [ "$(docker inspect -f '{{.State.Health.Status}}' explorer-proxy-test-app-api)" = "healthy" ]; do
+    echo "explorer-proxy-test-app-api container starting..."
+    sleep 2
+  done
+
+  until [ "$(docker inspect -f '{{.State.Health.Status}}' explorer-proxy-test)" = "healthy" ]; do
+    echo "explorer-proxy-test container starting..."
+    sleep 2
+  done
+
+  echo "app-api and proxy are available. Running tests..."
+
+  docker build -t 'explorer-proxy-test' -f ./tests/Dockerfile.test ./tests
+
+  docker run \
     --mount type=bind,source=./tests,target=/tests \
     --network host \
     explorer-proxy-test $@
diff --git a/tests/.env.test b/tests/.env.test
new file mode 100644
index 0000000..d0b7167
--- /dev/null
+++ b/tests/.env.test
@@ -0,0 +1,6 @@
+INVARIANT_API_URL=http://127.0.0.1
+
+POSTGRES_USER=postgres
+POSTGRES_PASSWORD=postgres
+POSTGRES_DB=invariantmonitor
+POSTGRES_HOST=database
\ No newline at end of file
diff --git a/tests/docker-compose.test.yml b/tests/docker-compose.test.yml
new file mode 100644
index 0000000..92f0377
--- /dev/null
+++ b/tests/docker-compose.test.yml
@@ -0,0 +1,110 @@
+name: explorer-proxy-test
+services:
+  traefik:
+    image: traefik:v2.0
+    container_name: "explorer-proxy-test-traefik"
+    command:
+      - --providers.docker=true
+      # Enable the API handler in insecure mode,
+      # which means that the Traefik API will be available directly
+      # on the entry point named traefik.
+      - --api.insecure=true
+      # Define Traefik entry points to port [80] for http and port [443] for https.
+      - --entrypoints.invariant-explorer-web-test.address=0.0.0.0:80
+    networks:
+      - invariant-explorer-web-test
+    ports:
+      - '${PORT_HTTP:-80}:80'
+    volumes:
+      - /var/run/docker.sock:/var/run/docker.sock
+    labels:
+      - "traefik.enable=true"
+      - "traefik.http.routers.traefik-http.entrypoints=invariant-explorer-web-test"
+
+  explorer-proxy:
+    container_name: explorer-proxy-test
+    build:
+      context: ../proxy
+      dockerfile: ../proxy/Dockerfile.proxy
+    depends_on:
+      app-api:
+        condition: service_healthy
+    working_dir: /srv/proxy
+    env_file:
+      - .env.test
+    environment:
+      - DEV_MODE=true
+    volumes:
+      - type: bind
+        source: ../proxy
+        target: /srv/proxy
+    networks:
+      - invariant-explorer-web-test
+    ports: []
+    labels:
+      - "traefik.enable=true"
+      - "traefik.http.routers.explorer-proxy-api.rule=(Host(`localhost`) && PathPrefix(`/api/v1/proxy/`)) || (Host(`127.0.0.1`) && PathPrefix(`/api/v1/proxy/`))"
+      - "traefik.http.routers.explorer-proxy-api.entrypoints=invariant-explorer-web-test"
+      - "traefik.http.services.explorer-proxy-api.loadbalancer.server.port=8000"
+      - "traefik.docker.network=invariant-explorer-web-test"
+    healthcheck:
+      test: curl -X GET -I http://localhost:8000/api/v1/proxy/health --fail
+      interval: 1s
+      timeout: 5s
+
+  app-api:
+    container_name: explorer-proxy-test-app-api
+    image: ghcr.io/invariantlabs-ai/explorer/app-api:latest
+    platform: linux/amd64
+    depends_on:
+      database:
+        condition: service_healthy
+    working_dir: /srv/app
+    env_file:
+      - .env.test
+    environment:
+      - PROJECTS_DIR=/srv/projects
+      - KEYCLOAK_CLIENT_ID_SECRET=local-does-not-use-keycloak
+      - TZ=Europe/Berlin
+      - DEV_MODE=true
+      - APP_NAME=explorer-test
+      - CONFIG_FILE=/config/explorer.config.yml
+      - PORT_HTTP=8000
+      - PORT_API=80
+    networks:
+      - internal
+      - invariant-explorer-web-test
+    volumes:
+      - /tmp/invariant-proxy-test/configs/explorer.test.yml:/config/explorer.config.yml
+    labels:
+      - "traefik.enable=true"
+      - "traefik.http.routers.explorer-test-api.rule=(Host(`localhost`) && PathPrefix(`/api/`)) || (Host(`127.0.0.1`) && PathPrefix(`/api/`))"
+      - "traefik.http.routers.explorer-test-api.entrypoints=invariant-explorer-web-test"
+      - "traefik.http.services.explorer-test-api.loadbalancer.server.port=8000"
+      - "traefik.docker.network=invariant-explorer-web-test"
+    healthcheck:
+      test: curl -X GET -I http://localhost:8000/api/v1 --fail
+      interval: 1s
+      timeout: 5s
+
+  database:
+    container_name: explorer-proxy-test-database
+    image: postgres:16
+    env_file:
+      - .env.test
+    networks:
+      - internal
+    volumes:
+      - type: bind
+        source: /tmp/invariant-explorer-test/data/database
+        target: /var/lib/postgresql/data
+    healthcheck:
+      test: [ "CMD-SHELL", "pg_isready -U postgres" ]
+      interval: 5s
+      timeout: 5s
+      retries: 5
+
+networks:
+  invariant-explorer-web-test:
+    external: true
+  internal: