diff --git a/.dockerignore b/.dockerignore
new file mode 100644
index 00000000..1838bc1b
--- /dev/null
+++ b/.dockerignore
@@ -0,0 +1,12 @@
+.git
+.gitignore
+node_modules
+__pycache__
+*.pyc
+.env
+.env.*
+*.egg-info
+dist
+build
+.pytest_cache
+.mypy_cache
diff --git a/DEVELOPMENT.md b/DEVELOPMENT.md
index cb9ed8e3..d5752dca 100644
--- a/DEVELOPMENT.md
+++ b/DEVELOPMENT.md
@@ -121,6 +121,45 @@ uv run data_formulator --dev   # Run backend only (for frontend development)
     Open [http://localhost:5567](http://localhost:5567) to view it in the browser.
 
 
+## Docker
+
+Docker is the easiest way to run Data Formulator without installing Python or Node.js locally.
+
+### Quick start
+
+1. **Copy the environment template and add your API keys:**
+
+    ```bash
+    cp .env.template .env
+    # Edit .env and set your OPENAI_API_KEY, ANTHROPIC_API_KEY, etc.
+    ```
+
+2. **Build and start the container:**
+
+    ```bash
+    docker compose up --build
+    ```
+
+3. Open [http://localhost:5567](http://localhost:5567) in your browser.
+
+To stop the container: `docker compose down`
+
+Workspace data (uploaded files, sessions) is persisted in a Docker volume (`data_formulator_home`) so it survives container restarts.
+
+### Build the image manually
+
+```bash
+docker build -t data-formulator .
+docker run --rm -p 5567:5567 --env-file .env data-formulator
+```
+
+### Docker sandbox (`SANDBOX=docker`) is not supported inside a container
+
+The Docker sandbox backend works by calling `docker run -v <host_path>:...` to bind-mount temporary workspace directories into child containers. When Data Formulator itself runs in a Docker container those paths refer to the *container* filesystem, not the host, so Docker daemon cannot mount them and the feature does not work.
+
+Use `SANDBOX=docker` only when running Data Formulator **directly on the host** (e.g. with `uv run data_formulator --sandbox docker` or `python -m data_formulator --sandbox docker`). When using the Docker image, keep the default `SANDBOX=local`.
+
+
 ## Sandbox
 
 AI-generated Python code runs inside a **sandbox** to isolate it from the main server process. Two backends are available:
diff --git a/Dockerfile b/Dockerfile
new file mode 100644
index 00000000..dd12e34e
--- /dev/null
+++ b/Dockerfile
@@ -0,0 +1,65 @@
+# Copyright (c) Microsoft Corporation.
+# Licensed under the MIT License.
+
+# ---------------------------------------------------------------------------
+# Stage 1: Build the React/TypeScript frontend
+# ---------------------------------------------------------------------------
+FROM node:20-slim AS frontend-builder
+
+WORKDIR /app
+
+# Install dependencies
+COPY package.json yarn.lock ./
+RUN yarn install --frozen-lockfile
+
+# Copy source and build
+COPY index.html tsconfig.json vite.config.ts eslint.config.js ./
+COPY public ./public
+COPY src ./src
+RUN yarn build
+
+# ---------------------------------------------------------------------------
+# Stage 2: Python runtime with the built frontend bundled in
+# ---------------------------------------------------------------------------
+FROM python:3.11-slim AS runtime
+
+# System dependencies needed by some Python packages
+RUN apt-get update && apt-get install -y --no-install-recommends \
+        gcc \
+        g++ \
+        libpq-dev \
+        unixodbc-dev \
+        curl \
+    && rm -rf /var/lib/apt/lists/*
+
+# Create a non-root user to run the application
+RUN useradd -m -s /bin/bash appuser
+
+# Set the home directory for workspace data to a deterministic path
+ENV DATA_FORMULATOR_HOME=/home/appuser/.data_formulator
+
+WORKDIR /app
+
+# Copy Python package sources
+COPY pyproject.toml MANIFEST.in README.md ./
+COPY py-src ./py-src
+
+# Copy the compiled frontend into the package's expected location
+COPY --from=frontend-builder /app/py-src/data_formulator/dist ./py-src/data_formulator/dist
+
+# Install the package and its dependencies
+RUN pip install --no-cache-dir .
+
+# Switch to non-root user and ensure workspace and app directories are owned by it
+RUN mkdir -p "${DATA_FORMULATOR_HOME}" && chown -R appuser:appuser /app "${DATA_FORMULATOR_HOME}"
+USER appuser
+
+EXPOSE 5567
+
+HEALTHCHECK --interval=30s --timeout=5s --retries=3 \
+  CMD curl -f http://localhost:5567/ || exit 1
+
+# Run the app on all interfaces so Docker port-forwarding works.
+# We do not pass --dev so Flask runs in production mode (no debugger/reloader).
+# webbrowser.open() fails silently in a headless container, which is harmless.
+ENTRYPOINT ["python", "-m", "data_formulator", "--port", "5567"]
diff --git a/docker-compose.yml b/docker-compose.yml
new file mode 100644
index 00000000..24db9753
--- /dev/null
+++ b/docker-compose.yml
@@ -0,0 +1,28 @@
+# Copyright (c) Microsoft Corporation.
+# Licensed under the MIT License.
+
+# Docker Compose configuration for Data Formulator.
+#
+# Quick start:
+#   1. Copy .env.template to .env and fill in your API keys.
+#   2. docker compose up --build
+#   3. Open http://localhost:5567 in your browser.
+
+services:
+  data-formulator:
+    build:
+      context: .
+      dockerfile: Dockerfile
+    image: data-formulator:latest
+    ports:
+      - "5567:5567"
+    env_file:
+      - .env
+    user: "0:0"
+    volumes:
+      # Persist workspace data (uploaded files, sessions, etc.) across container restarts.
+      - data_formulator_home:/home/appuser/.data_formulator
+    restart: unless-stopped
+
+volumes:
+  data_formulator_home:
diff --git a/py-src/data_formulator/sandbox/Dockerfile.sandbox b/py-src/data_formulator/sandbox/Dockerfile.sandbox
new file mode 100644
index 00000000..a6be9e1e
--- /dev/null
+++ b/py-src/data_formulator/sandbox/Dockerfile.sandbox
@@ -0,0 +1,26 @@
+# Copyright (c) Microsoft Corporation.
+# Licensed under the MIT License.
+
+# Minimal sandbox image used by the Docker sandbox backend.
+# This image is intentionally small — it only needs the packages
+# required to execute user-generated data-transformation code.
+#
+# Build:
+#   docker build -t data-formulator-sandbox \
+#       -f py-src/data_formulator/sandbox/Dockerfile.sandbox .
+
+FROM python:3.11-slim
+
+RUN pip install --no-cache-dir \
+    pandas \
+    numpy \
+    duckdb \
+    pyarrow \
+    scikit-learn \
+    scipy
+
+# Drop to a non-root user for extra isolation
+RUN useradd -m sandbox
+USER sandbox
+
+WORKDIR /sandbox/workdir