diff --git a/.env b/.env
index 1d44286e25..1e73d045f4 100644
--- a/.env
+++ b/.env
@@ -38,6 +38,9 @@ POSTGRES_DB=app
 POSTGRES_USER=postgres
 POSTGRES_PASSWORD=changethis
 
+# Database URL for the backend (uses localhost for local dev, overridden in compose.yml for Docker)
+DATABASE_URL=postgresql+psycopg://postgres:changethis@localhost:5432/app
+
 SENTRY_DSN=
 
 # Configure these with your own Docker registry images
diff --git a/backend/app/alembic/env.py b/backend/app/alembic/env.py
index 5e2c22f844..7f407fabb9 100755
--- a/backend/app/alembic/env.py
+++ b/backend/app/alembic/env.py
@@ -31,7 +31,7 @@
 
 
 def get_url():
-    return str(settings.SQLALCHEMY_DATABASE_URI)
+    return str(settings.DATABASE_URL)
 
 
 def run_migrations_offline():
diff --git a/backend/app/core/config.py b/backend/app/core/config.py
index 650b9f7910..49a70aa3d6 100644
--- a/backend/app/core/config.py
+++ b/backend/app/core/config.py
@@ -50,23 +50,7 @@ def all_cors_origins(self) -> list[str]:
 
     PROJECT_NAME: str
     SENTRY_DSN: HttpUrl | None = None
-    POSTGRES_SERVER: str
-    POSTGRES_PORT: int = 5432
-    POSTGRES_USER: str
-    POSTGRES_PASSWORD: str = ""
-    POSTGRES_DB: str = ""
-
-    @computed_field  # type: ignore[prop-decorator]
-    @property
-    def SQLALCHEMY_DATABASE_URI(self) -> PostgresDsn:
-        return PostgresDsn.build(
-            scheme="postgresql+psycopg",
-            username=self.POSTGRES_USER,
-            password=self.POSTGRES_PASSWORD,
-            host=self.POSTGRES_SERVER,
-            port=self.POSTGRES_PORT,
-            path=self.POSTGRES_DB,
-        )
+    DATABASE_URL: PostgresDsn
 
     SMTP_TLS: bool = True
     SMTP_SSL: bool = False
@@ -108,7 +92,6 @@ def _check_default_secret(self, var_name: str, value: str | None) -> None:
     @model_validator(mode="after")
     def _enforce_non_default_secrets(self) -> Self:
         self._check_default_secret("SECRET_KEY", self.SECRET_KEY)
-        self._check_default_secret("POSTGRES_PASSWORD", self.POSTGRES_PASSWORD)
         self._check_default_secret(
             "FIRST_SUPERUSER_PASSWORD", self.FIRST_SUPERUSER_PASSWORD
         )
diff --git a/backend/app/core/db.py b/backend/app/core/db.py
index ba991fb36d..f19ac0d3bf 100644
--- a/backend/app/core/db.py
+++ b/backend/app/core/db.py
@@ -4,7 +4,7 @@
 from app.core.config import settings
 from app.models import User, UserCreate
 
-engine = create_engine(str(settings.SQLALCHEMY_DATABASE_URI))
+engine = create_engine(str(settings.DATABASE_URL))
 
 
 # make sure all SQLModel models are imported (app.models) before initializing DB
diff --git a/compose.yml b/compose.yml
index 2488fc007b..870a8bc3c3 100644
--- a/compose.yml
+++ b/compose.yml
@@ -69,11 +69,7 @@ services:
       - SMTP_USER=${SMTP_USER}
       - SMTP_PASSWORD=${SMTP_PASSWORD}
       - EMAILS_FROM_EMAIL=${EMAILS_FROM_EMAIL}
-      - POSTGRES_SERVER=db
-      - POSTGRES_PORT=${POSTGRES_PORT}
-      - POSTGRES_DB=${POSTGRES_DB}
-      - POSTGRES_USER=${POSTGRES_USER?Variable not set}
-      - POSTGRES_PASSWORD=${POSTGRES_PASSWORD?Variable not set}
+      - DATABASE_URL=postgresql+psycopg://${POSTGRES_USER?Variable not set}:${POSTGRES_PASSWORD?Variable not set}@db:${POSTGRES_PORT}/${POSTGRES_DB}
       - SENTRY_DSN=${SENTRY_DSN}
 
   backend:
@@ -102,11 +98,7 @@ services:
       - SMTP_USER=${SMTP_USER}
       - SMTP_PASSWORD=${SMTP_PASSWORD}
       - EMAILS_FROM_EMAIL=${EMAILS_FROM_EMAIL}
-      - POSTGRES_SERVER=db
-      - POSTGRES_PORT=${POSTGRES_PORT}
-      - POSTGRES_DB=${POSTGRES_DB}
-      - POSTGRES_USER=${POSTGRES_USER?Variable not set}
-      - POSTGRES_PASSWORD=${POSTGRES_PASSWORD?Variable not set}
+      - DATABASE_URL=postgresql+psycopg://${POSTGRES_USER?Variable not set}:${POSTGRES_PASSWORD?Variable not set}@db:${POSTGRES_PORT}/${POSTGRES_DB}
       - SENTRY_DSN=${SENTRY_DSN}
 
     healthcheck: