diff --git a/.env.example b/.env.example
new file mode 100644
index 0000000..5b42458
--- /dev/null
+++ b/.env.example
@@ -0,0 +1,14 @@
+# Octopus Deploy Configuration for Testing
+# Copy this file to .env and fill in your actual values
+
+# Your Octopus Deploy instance URL
+OCTOPUS_SERVER_URL=https://your-octopus-instance.octopus.app
+
+# Your Octopus Deploy API key
+OCTOPUS_API_KEY=API-XXXXXXXXXXXXXXXXXXXXXXXXXX
+
+# Or use an access token (Bearer token) instead of an API key
+# OCTOPUS_ACCESS_TOKEN=your-access-token-here
+
+# Space name to use for testing (optional, defaults to "Default")
+TEST_SPACE_NAME=Default
\ No newline at end of file
diff --git a/README.md b/README.md
index 0317767..7a3093d 100644
--- a/README.md
+++ b/README.md
@@ -65,7 +65,7 @@ We are planning to release a native ARM build shortly so that those arguments wi
 #### Requirements
 - Node.js >= v20.0.0
 - Octopus Deploy instance that can be accessed by the MCP server via HTTPS
-- Octopus Deploy API Key
+- Octopus Deploy API Key or Access Token (see [Authentication](#authentication) below)
 
 #### Configuration
 
@@ -118,6 +118,49 @@ Or with configuration supplied via the command line:
 npx -y @octopusdeploy/mcp-server --server-url https://your-octopus.com --api-key YOUR_API_KEY
 ```
 
+### Authentication
+
+The MCP server supports two authentication methods:
+
+#### API Key (recommended for interactive use)
+
+API keys are the standard authentication method for Octopus Deploy. You can generate one from your Octopus Deploy user profile.
+
+```bash
+# Via environment variable
+OCTOPUS_API_KEY=API-XXXXXXXXXXXXXXXXXXXXXXXXXX
+
+# Via command line argument
+npx -y @octopusdeploy/mcp-server --api-key YOUR_API_KEY --server-url https://your-octopus.com
+```
+
+#### Access Token / Bearer Token (automated scenarios only)
+
+The server also supports short-lived access tokens (Bearer tokens) as an alternative to API keys. This authentication method is intended **only for automated scenarios** where an external system issues a short-lived token to the MCP server (e.g., CI/CD pipelines, automated orchestration, or machine-to-machine workflows). Do not use long-lived Bearer tokens — use API keys instead for interactive or long-running sessions.
+
+```bash
+# Via environment variable
+OCTOPUS_ACCESS_TOKEN=your-short-lived-token
+
+# Via command line argument
+npx -y @octopusdeploy/mcp-server --access-token YOUR_TOKEN --server-url https://your-octopus.com
+```
+
+Full example configuration with an access token:
+```json
+{
+  "mcpServers": {
+    "octopusdeploy": {
+      "type": "stdio",
+      "command": "npx",
+      "args": ["-y", "@octopusdeploy/mcp-server", "--access-token", "YOUR_TOKEN", "--server-url", "https://your-octopus.com"]
+    }
+  }
+}
+```
+
+If both an API key and an access token are provided, the access token takes precedence.
+
 ### Configuration Options
 
 The Octopus MCP Server supports several command-line options to customize which tools are available. 
diff --git a/src/helpers/errorHandling.ts b/src/helpers/errorHandling.ts
index 57e1dd1..a590db9 100644
--- a/src/helpers/errorHandling.ts
+++ b/src/helpers/errorHandling.ts
@@ -58,7 +58,7 @@ export function handleOctopusApiError(
     isErrorWithMessage(error, "provide a valid API key")
   ) {
     throw new Error(
-      "Authentication failed. Ensure OCTOPUS_API_KEY environment variable is set with a valid API key. " +
+      "Authentication failed. Ensure a valid API key (OCTOPUS_API_KEY) or access token (OCTOPUS_ACCESS_TOKEN) is provided. " +
         "You can generate an API key from your Octopus Deploy user profile.",
     );
   }
diff --git a/src/helpers/getClientConfigurationFromEnvironment.ts b/src/helpers/getClientConfigurationFromEnvironment.ts
index 34f7608..2bd4a62 100644
--- a/src/helpers/getClientConfigurationFromEnvironment.ts
+++ b/src/helpers/getClientConfigurationFromEnvironment.ts
@@ -8,6 +8,7 @@ const USER_AGENT_NAME = "octopus-mcp-server";
 export interface ConfigurationOptions {
   instanceURL?: string;
   apiKey?: string;
+  accessToken?: string;
 }
 
 function isEmpty(value: string | undefined): value is undefined | "" {
@@ -22,14 +23,31 @@ function constructUserAgent(): string {
 }
 
 function getClientConfiguration(options: ConfigurationOptions = {}): ClientConfiguration {
-  if (isEmpty(options.instanceURL) || isEmpty(options.apiKey)) {
+  const hasApiKey = !isEmpty(options.apiKey);
+  const hasAccessToken = !isEmpty(options.accessToken);
+
+  if (isEmpty(options.instanceURL)) {
     throw new Error(
-      "Octopus server URL and API key must be provided either via command line arguments (--server-url, --api-key) or environment variables (OCTOPUS_SERVER_URL, OCTOPUS_API_KEY)."
+      "Octopus server URL must be provided either via command line argument (--server-url) or environment variable (OCTOPUS_SERVER_URL)."
+    );
+  }
+
+  if (!hasApiKey && !hasAccessToken) {
+    throw new Error(
+      "Octopus authentication must be provided. Supply either an API key (--api-key or OCTOPUS_API_KEY) or an access token (--access-token or OCTOPUS_ACCESS_TOKEN)."
     );
   }
 
   const userAgent = constructUserAgent();
 
+  if (hasAccessToken) {
+    return {
+      userAgentApp: userAgent,
+      instanceURL: options.instanceURL,
+      accessToken: options.accessToken,
+    };
+  }
+
   return {
     userAgentApp: userAgent,
     instanceURL: options.instanceURL,
@@ -41,5 +59,6 @@ export function getClientConfigurationFromEnvironment(): ClientConfiguration {
   return getClientConfiguration({
     instanceURL: env["CLI_SERVER_URL"] || env["OCTOPUS_SERVER_URL"],
     apiKey: env["CLI_API_KEY"] || env["OCTOPUS_API_KEY"],
+    accessToken: env["CLI_ACCESS_TOKEN"] || env["OCTOPUS_ACCESS_TOKEN"],
   });
 }
\ No newline at end of file
diff --git a/src/index.ts b/src/index.ts
index 99abcb4..6d96023 100644
--- a/src/index.ts
+++ b/src/index.ts
@@ -33,6 +33,7 @@ program
   .version(SEMVER_VERSION)
   .option("-s, --server-url <url>", "Octopus server URL")
   .option("-k, --api-key <key>", "Octopus API key")
+  .option("-t, --access-token <token>", "Octopus access token (Bearer token)")
   .option(
     "--toolsets <toolsets>",
     `Comma-separated list of toolsets to enable, or "all" (default: all). Available toolsets: ${DEFAULT_TOOLSETS.join(", ")}`,
@@ -90,6 +91,9 @@ if (options.serverUrl) {
 if (options.apiKey) {
   process.env.CLI_API_KEY = options.apiKey;
 }
+if (options.accessToken) {
+  process.env.CLI_ACCESS_TOKEN = options.accessToken;
+}
 
 // Set up initialization callback to capture client info
 server.server.oninitialized = () => {
diff --git a/src/tools/__tests__/testSetup.ts b/src/tools/__tests__/testSetup.ts
index 4d321aa..4f39c68 100644
--- a/src/tools/__tests__/testSetup.ts
+++ b/src/tools/__tests__/testSetup.ts
@@ -7,6 +7,7 @@ config();
 export const testConfig = {
   octopusServerUrl: process.env.OCTOPUS_SERVER_URL || process.env.CLI_SERVER_URL,
   octopusApiKey: process.env.OCTOPUS_API_KEY || process.env.CLI_API_KEY,
+  octopusAccessToken: process.env.OCTOPUS_ACCESS_TOKEN || process.env.CLI_ACCESS_TOKEN,
   testSpaceName: process.env.TEST_SPACE_NAME || "Default",
   timeout: 30000, // 30 seconds
 };
@@ -18,8 +19,8 @@ export function validateTestEnvironment(): void {
     missing.push("OCTOPUS_SERVER_URL (or CLI_SERVER_URL)");
   }
 
-  if (!testConfig.octopusApiKey) {
-    missing.push("OCTOPUS_API_KEY (or CLI_API_KEY)");
+  if (!testConfig.octopusApiKey && !testConfig.octopusAccessToken) {
+    missing.push("OCTOPUS_API_KEY (or CLI_API_KEY) or OCTOPUS_ACCESS_TOKEN (or CLI_ACCESS_TOKEN)");
   }
 
   if (missing.length > 0) {