diff --git a/.gitignore b/.gitignore
index 0d8d136..68b1d3e 100644
--- a/.gitignore
+++ b/.gitignore
@@ -4,4 +4,4 @@
 /tests/resources/functions/**/code.tar.gz
 /tests/resources/functions/**/code.zip
 /tests/resources/sites/**/code.tar.gz
-/tests/resources/sites/**/code.zip
\ No newline at end of file
+/tests/resources/sites/**/code.zip
diff --git a/CONTRIBUTING.md b/CONTRIBUTING.md
index 9d38398..a2bc26a 100644
--- a/CONTRIBUTING.md
+++ b/CONTRIBUTING.md
@@ -76,7 +76,18 @@ Next start the Docker Compose stack that includes executor server with nessessar
 docker compose up -d
 ```
 
-You can now use `http://localhost:9800/v1/` endpoint to communicate with Open Runtimes Executor. You can see 'Getting Started' section of README to learn about endpoints.
+For development with live reload, use Docker Compose watch which automatically syncs code changes to the container:
+
+```bash
+docker compose watch
+```
+
+The `docker-compose.override.yml` file configures the development environment:
+- Changes to `app/` and `src/` sync and restart the container
+- Changes to `tests/` and `phpunit.xml` sync without restart
+- Changes to `composer.json` or `composer.lock` trigger a full rebuild
+
+You can now use `http://localhost:9900/v1/` endpoint to communicate with Open Runtimes Executor. You can see 'Getting Started' section of README to learn about endpoints.
 
 ## Testing
 
@@ -97,19 +108,19 @@ To run tests, you need to start Docker Compose stack, and then run PHPUnit:
 ```bash
 docker compose up -d
 # Wait for ~5 seconds for executor to start
-docker run --rm -v $PWD:/app --network executor_runtimes -w /app phpswoole/swoole:5.1.2-php8.3-alpine sh -c \ "composer test"
+docker run --rm -v $PWD:/app --network executor_runtimes -w /app phpswoole/swoole:5.1.2-php8.3-alpine sh -c \ "composer test:e2e"
 ```
 
-To run linter, you need to run Pint:
+To format, you can run Pint with:
 
 ```bash
 composer format
 ```
 
-To run static code analysis, you need to run PHPStan:
+To run static code analysis, you can run PHPStan with:
 
 ```bash
-composer check
+composer analyze
 ```
 
 ## Introducing New Features
@@ -148,4 +159,4 @@ Submitting documentation updates, enhancements, designs, or bug fixes. Spelling
 
 ### Helping Someone
 
-Searching for Open Runtimes, GitHub or StackOverflow and helping someone else who needs help. You can also help by teaching others how to contribute to Open Runtimes repo!
\ No newline at end of file
+Searching for Open Runtimes, GitHub or StackOverflow and helping someone else who needs help. You can also help by teaching others how to contribute to Open Runtimes repo!
diff --git a/Dockerfile b/Dockerfile
index 8d05f7b..13a9eaa 100755
--- a/Dockerfile
+++ b/Dockerfile
@@ -1,10 +1,9 @@
 # Install PHP libraries
-FROM composer:2.0 AS composer
+FROM composer:2.8 AS composer
 
 WORKDIR /usr/local/src/
 
-COPY composer.lock /usr/local/src/
-COPY composer.json /usr/local/src/
+COPY composer.lock composer.json ./
 
 RUN composer install --ignore-platform-reqs --optimize-autoloader \
     --no-plugins --no-scripts --prefer-dist
@@ -15,13 +14,13 @@ FROM openruntimes/base:0.1.0 AS final
 ARG OPR_EXECUTOR_VERSION
 ENV OPR_EXECUTOR_VERSION=$OPR_EXECUTOR_VERSION
 
-# Source code
+# Dependencies first (changes less frequently)
+COPY --from=composer /usr/local/src/vendor /usr/local/vendor
+
+# Source code last (changes more frequently)
 COPY ./app /usr/local/app
 COPY ./src /usr/local/src
 
-# Extensions and libraries
-COPY --from=composer /usr/local/src/vendor /usr/local/vendor
-
 HEALTHCHECK --interval=30s --timeout=15s --start-period=60s --retries=3 CMD curl -sf http://127.0.0.1:80/v1/health
 
 CMD [ "php", "app/http.php" ]
diff --git a/docker-compose.override.yml b/docker-compose.override.yml
new file mode 100644
index 0000000..d9d5685
--- /dev/null
+++ b/docker-compose.override.yml
@@ -0,0 +1,27 @@
+# Development overrides - use with `docker compose watch`
+services:
+  openruntimes-executor:
+    restart: unless-stopped
+    env_file:
+      - .env
+    volumes:
+      - ./tests/resources/functions:/storage/functions:rw
+      - ./tests/resources/sites:/storage/sites:rw
+    develop:
+      watch:
+        - action: sync+restart
+          path: ./app
+          target: /usr/local/app
+        - action: sync+restart
+          path: ./src
+          target: /usr/local/src
+        - action: sync
+          path: ./tests
+          target: /usr/local/tests
+        - action: sync
+          path: ./phpunit.xml
+          target: /usr/local/phpunit.xml
+        - action: rebuild
+          path: ./composer.json
+        - action: rebuild
+          path: ./composer.lock
diff --git a/docker-compose.yml b/docker-compose.yml
index 6e8700a..3c4f2b5 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -1,20 +1,6 @@
-# WARNING!
-# This is a development version of the docker-compose.yml file.
-# Avoid using this file in your production environment.
-# We're exposing here sensitive ports and mounting code volumes for rapid development and debugging of the server stack.
-
-x-logging: &x-logging
-  logging:
-    driver: "json-file"
-    options:
-      max-file: "5"
-      max-size: "10m"
-
 services:
   openruntimes-executor:
     hostname: executor
-    <<: *x-logging
-    stop_signal: SIGINT
     build:
       context: .
     networks:
@@ -29,15 +15,9 @@ services:
       start_period: 120s
     volumes:
       - /var/run/docker.sock:/var/run/docker.sock
-      - ./app:/usr/local/app:rw
-      - ./src:/usr/local/src:rw
-      - ./tests:/usr/local/tests:rw
-      - ./phpunit.xml:/usr/local/phpunit.xml
       - openruntimes-builds:/storage/builds:rw
       - openruntimes-functions:/storage/functions:rw
       - /tmp:/tmp:rw
-      - ./tests/resources/functions:/storage/functions:rw
-      - ./tests/resources/sites:/storage/sites:rw
     environment:
       - OPR_EXECUTOR_ENV
       - OPR_EXECUTOR_IMAGES