diff --git a/Dockerfile b/Dockerfile
new file mode 100644
index 0000000..94825db
--- /dev/null
+++ b/Dockerfile
@@ -0,0 +1,12 @@
+FROM python:3.11-slim
+
+WORKDIR /app
+
+COPY requirements.txt .
+RUN pip install --no-cache-dir -r requirements.txt
+
+COPY . .
+
+EXPOSE 8000
+
+CMD ["uvicorn", "app.main:app", "--host", "0.0.0.0", "--port", "8000"]
diff --git a/RUNNING.md b/RUNNING.md
index 77896cf..69b9fa8 100644
--- a/RUNNING.md
+++ b/RUNNING.md
@@ -1,33 +1,97 @@
-# Running the Todo API
+# Running the Hello API
+
+## TEAM_BRIEF
+stack: Python/FastAPI
+test_runner: pytest tests/
+lint_tool: ruff check .
+coverage_tool: pytest-cov
+coverage_threshold: 70
+coverage_applies: true
 
 ## Prerequisites
 
-- Python 3.10 or later
+- Docker and Docker Compose installed, **or**
+- Python 3.11+ installed locally
+
+---
+
+## Docker-based Setup (Recommended)
+
+### Build and Start the Server
+
+```bash
+docker-compose up --build
+```
+
+The API will be available at `http://localhost:8000`.
+
+### Verify the /hello Endpoint
+
+```bash
+curl http://localhost:8000/hello
+```
+
+Expected response:
 
-## Install dependencies
+```json
+{"message": "hello"}
+```
+
+### Run Tests inside Docker
 
 ```bash
-pip install fastapi uvicorn pydantic
+docker-compose run --rm api pytest tests/ -v
 ```
 
-For running the test suite you will also need:
+### Stop the Server
 
 ```bash
-pip install httpx pytest
+docker-compose down
 ```
 
-## Start the server
+---
+
+## Local Setup (without Docker)
+
+### Install Dependencies
 
 ```bash
-uvicorn main:app --reload --host 0.0.0.0 --port 8000
+pip install -r requirements.txt
 ```
 
-The API will be available at <http://localhost:8000>.
+### Start the Server
 
-Interactive docs are served at <http://localhost:8000/docs>.
+```bash
+uvicorn app.main:app --host 0.0.0.0 --port 8000
+```
 
-## Run the tests
+### Run Tests
 
 ```bash
-pytest tests/
+pytest tests/ -v
 ```
+
+---
+
+## Project Structure
+
+```
+.
+├── app/
+│   ├── __init__.py
+│   └── main.py          # FastAPI application with GET /hello
+├── tests/
+│   ├── __init__.py
+│   └── test_hello.py    # Pytest tests for the /hello endpoint
+├── conftest.py           # Root pytest configuration
+├── requirements.txt      # Python dependencies
+├── Dockerfile            # Container image definition
+├── docker-compose.yml    # Docker Compose orchestration
+└── RUNNING.md            # This file
+```
+
+## API Endpoints
+
+| Method | Path     | Description                       | Response              |
+|--------|----------|-----------------------------------|-----------------------|
+| GET    | `/hello` | Returns a JSON greeting message   | `{"message": "hello"}` |
diff --git a/app/__init__.py b/app/__init__.py
new file mode 100644
index 0000000..e69de29
diff --git a/app/main.py b/app/main.py
new file mode 100644
index 0000000..40cd178
--- /dev/null
+++ b/app/main.py
@@ -0,0 +1,20 @@
+"""FastAPI application entry point.
+
+Initialises the FastAPI app and defines the GET /hello endpoint.
+"""
+
+from __future__ import annotations
+
+from fastapi import FastAPI
+
+app = FastAPI(
+    title="Hello API",
+    description="A minimal API server with a /hello endpoint.",
+    version="0.1.0",
+)
+
+
+@app.get("/hello", tags=["hello"])
+async def hello() -> dict:
+    """Return a simple JSON greeting."""
+    return {"message": "hello"}
diff --git a/conftest.py b/conftest.py
index 2cb6af4..e21aa40 100644
--- a/conftest.py
+++ b/conftest.py
@@ -7,6 +7,11 @@
 import sys
 from pathlib import Path
 
+# Ensure the project root is on sys.path so that 'app' package is importable.
+_PROJECT_ROOT = str(Path(__file__).resolve().parent)
+if _PROJECT_ROOT not in sys.path:
+    sys.path.insert(0, _PROJECT_ROOT)
+
 
 def pytest_addoption(parser):
     """Register --timeout so pytest doesn't choke when the plugin is absent."""
diff --git a/docker-compose.yml b/docker-compose.yml
new file mode 100644
index 0000000..6011f7d
--- /dev/null
+++ b/docker-compose.yml
@@ -0,0 +1,12 @@
+version: "3.9"
+
+services:
+  api:
+    build: .
+    ports:
+      - "8000:8000"
+    volumes:
+      - .:/app
+    environment:
+      - PYTHONUNBUFFERED=1
+    command: uvicorn app.main:app --host 0.0.0.0 --port 8000 --reload
diff --git a/requirements.txt b/requirements.txt
index 5a6ebf7..ecbcde8 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -1,6 +1,4 @@
-fastapi>=0.100.0
-uvicorn>=0.23.0
-pydantic>=2.0.0
-pytest>=7.0.0
-pytest-timeout>=2.1.0
-httpx>=0.24.0
+fastapi>=0.110.0,<1.0.0
+uvicorn>=0.29.0,<1.0.0
+pytest>=8.0.0,<9.0.0
+httpx>=0.27.0,<1.0.0
diff --git a/tests/test_hello.py b/tests/test_hello.py
new file mode 100644
index 0000000..9e89c38
--- /dev/null
+++ b/tests/test_hello.py
@@ -0,0 +1,42 @@
+"""Tests for the GET /hello endpoint.
+
+Verifies that the endpoint returns HTTP 200 and the expected JSON body.
+"""
+
+from __future__ import annotations
+
+from fastapi.testclient import TestClient
+
+from app.main import app
+
+client = TestClient(app)
+
+
+def test_get_hello_status_code() -> None:
+    """GET /hello should return HTTP 200."""
+    response = client.get("/hello")
+    assert response.status_code == 200
+
+
+def test_get_hello_json_body() -> None:
+    """GET /hello should return JSON {'message': 'hello'}."""
+    response = client.get("/hello")
+    assert response.json() == {"message": "hello"}
+
+
+def test_get_hello_content_type() -> None:
+    """GET /hello should return application/json content type."""
+    response = client.get("/hello")
+    assert "application/json" in response.headers["content-type"]
+
+
+def test_post_hello_not_allowed() -> None:
+    """POST /hello should return HTTP 405 Method Not Allowed."""
+    response = client.post("/hello")
+    assert response.status_code == 405
+
+
+def test_nonexistent_endpoint_returns_404() -> None:
+    """Requesting a non-existent path should return HTTP 404."""
+    response = client.get("/nonexistent")
+    assert response.status_code == 404