diff --git a/.env.example b/.env.example
new file mode 100644
index 0000000..7fc2d86
--- /dev/null
+++ b/.env.example
@@ -0,0 +1,50 @@
+# Local development environment (.env file)
+# Copy to .env and fill in your local/dev URLs
+# .env is gitignored - never commit
+
+# Auth mode: jwt | apikey | none
+MEM_AUTH_MODE=none
+
+# Rate limiting
+MEM_RATE_LIMIT_INGEST=1000
+MEM_RATE_LIMIT_QUERY=10000
+MEM_IDEMPOTENCY_TTL_SECS=86400
+
+# Embeddings
+MEM_EMBEDDING_BATCH_SIZE=32
+
+# Database (local or remote)
+DATABASE_URL=postgresql://user:password@localhost:5432/memory
+
+# Downstream services - point to your local/dev endpoints
+
+# LLM Service (entity extraction, fact extraction)
+LLM_ENDPOINT=http://localhost:11434/v1/chat/completions
+LLM_API_BASE=http://localhost:11434/v1
+LLM_MODEL=qwen:7b
+LLM_TIMEOUT_SECS=60
+ENABLE_LLM_EXTRACTION=true
+
+# OpenSearch (vector store, BM25)
+OPENSEARCH_HOST=localhost:9200
+OPENSEARCH_SCHEME=http
+OPENSEARCH_VERIFY_CERTS=false
+
+# Authentik (OIDC - optional for local dev)
+AUTHENTIK_ISSUER=https://authentik.riotpiao.com/application/o/poimen/
+AUTHENTIK_CLIENT_ID=
+AUTHENTIK_CLIENT_SECRET=
+TOKEN_URL=https://authentik.riotpiao.com/application/o/token/
+AUTHENTIK_VERIFY_SSL=false
+
+# Temporal (workflow orchestration - future)
+TEMPORAL_ENDPOINT=localhost:7233
+TEMPORAL_NAMESPACE=poimen
+
+# API Gateway (route optimization - future)
+GATEWAY_URL=http://localhost:8080
+
+# Server config
+MEM_PORT=8080
+MEM_API_KEY=test-key
+MEM_HOME=/tmp
diff --git a/LOCAL_DEV.md b/LOCAL_DEV.md
new file mode 100644
index 0000000..c11b6e4
--- /dev/null
+++ b/LOCAL_DEV.md
@@ -0,0 +1,84 @@
+# Local Development Setup
+
+Running poimen-memory locally for development.
+
+## Quick Start
+
+1. **Copy env template**:
+   ```bash
+   cp .env.example .env
+   ```
+
+2. **Edit `.env`** with your local endpoints:
+   ```bash
+   # Edit .env with your local/dev service URLs
+   # Example: LLM service on localhost:11434, OpenSearch on localhost:9200
+   ```
+
+3. **Run the service**:
+   ```bash
+   cargo run --release -- serve --port 8080
+   ```
+
+The application loads configuration from `.env` (via `dotenvy` or similar).
+
+## `.env` File
+
+**Location**: Project root (`.env`)
+**Status**: Gitignored - never committed
+**Template**: `.env.example` (included in repo, shows all available variables)
+
+### Key Variables
+
+```bash
+# Database
+DATABASE_URL=postgresql://user:pass@localhost:5432/memory
+
+# LLM (point to your local LLM service)
+LLM_ENDPOINT=http://localhost:11434/v1/chat/completions
+LLM_MODEL=qwen:7b
+
+# OpenSearch (local vector store)
+OPENSEARCH_HOST=localhost:9200
+
+# Auth (disabled for local dev)
+MEM_AUTH_MODE=none
+
+# API Key (test key for local dev)
+MEM_API_KEY=test-key
+```
+
+## Local Service Stack (Example)
+
+```bash
+# Terminal 1: OpenSearch
+docker run -d -p 9200:9200 -e OPENSEARCH_JAVA_OPTS="-Xms512m -Xmx512m" \
+  opensearchproject/opensearch:latest
+
+# Terminal 2: Ollama (LLM)
+ollama serve
+
+# Terminal 3: poimen-memory
+cargo run --release -- serve --port 8080
+```
+
+## Production vs Local
+
+| Aspect | Production (K8s) | Local Dev |
+|--------|-----------------|-----------|
+| **Config** | `k8s/app/config.yaml` (SOPS-encrypted) | `.env` (gitignored) |
+| **Injection** | ConfigMap via `envFrom:` | dotenv via `dotenvy` crate |
+| **Services** | Cluster-internal DNS | localhost/127.0.0.1 |
+| **Auth** | JWT (Authentik) | None (disabled) |
+| **Commit?** | Yes (encrypted) | No (gitignored) |
+
+## Switching to Production Config
+
+To run against production services (not recommended locally):
+1. Edit `.env` with production URLs
+2. Set credentials appropriately
+3. Ensure network access to production services
+
+---
+
+See `.env.example` for all available environment variables.
diff --git a/k8s/app/kustomization.yaml b/k8s/app/kustomization.yaml
index 6e0eed2..7ec3af7 100644
--- a/k8s/app/kustomization.yaml
+++ b/k8s/app/kustomization.yaml
@@ -6,7 +6,6 @@ resources:
   - deployment.yaml
   - service.yaml
   - config.yaml        # Production config (SOPS-encrypted)
-  # config.local.yaml  # Optional: plaintext local/dev overrides
 
 generators:
   - secret-generator.yaml