diff --git a/README.md b/README.md
index 9b5f7548..0336b48d 100644
--- a/README.md
+++ b/README.md
@@ -23,6 +23,8 @@ Refer to [INSTALL.md](INSTALL.md)
 
 Make sure `bitcoind` is running before running `teosd` (it will fail at startup if it cannot connect to `bitcoind`). [Here](DEPENDENCIES.md#installing-bitcoind) you can find a sample bitcoin.conf.
 
+Please see [Docker instructions](docker/README.md) for instructions on how to set up `teosd` in Docker.
+
 ### Starting the tower daemon ♖
 
 Once installed, you can start the tower by running:
diff --git a/docker/Dockerfile b/docker/Dockerfile
new file mode 100644
index 00000000..1333ea8f
--- /dev/null
+++ b/docker/Dockerfile
@@ -0,0 +1,49 @@
+# Use the rust image as the base image for the build stage
+FROM rust:latest AS builder
+
+# Copy the rust-teos source code
+COPY . /tmp/rust-teos
+
+# Install the dependencies required for building rust-teos
+RUN apt-get update\
+    && apt-get -y --no-install-recommends install libffi-dev libssl-dev musl-tools pkg-config
+
+RUN cd /tmp/rust-teos \
+    && rustup target add x86_64-unknown-linux-musl \
+    # Rustfmt is needed to format the grpc stubs generated by tonic
+    && rustup component add rustfmt \
+    # Cross compile with musl as the target, so teosd can run on alpine
+    && RUSTFLAGS='-C target-feature=+crt-static' cargo build --manifest-path=teos/Cargo.toml --locked --release --target x86_64-unknown-linux-musl
+
+# Use a new stage with a smaller base image to reduce image size
+FROM alpine:latest
+
+RUN apk update && apk upgrade
+
+# UID and GID for the teosd user
+ENV TEOS_UID=1001 TEOS_GID=1001
+
+# Copy the teos binaries from the build stage to the new stage
+COPY --from=builder \
+    /tmp/rust-teos/target/x86_64-unknown-linux-musl/release/teosd \
+    /tmp/rust-teos/target/x86_64-unknown-linux-musl/release/teos-cli /usr/local/bin/
+
+# Copy the entrypoint script to the container
+COPY docker/entrypoint.sh /entrypoint.sh
+
+# Set the entrypoint script as executable and add running user
+RUN chmod +x /entrypoint.sh \
+    && addgroup -g ${TEOS_GID} -S teos \
+    && adduser -S -G teos -u ${TEOS_UID} teos
+
+# Expose the default port used by teosd
+EXPOSE 9814/tcp
+
+# Switch user so that we don't run stuff as root
+USER teos
+
+# Create the teos data directory
+RUN mkdir /home/teos/.teos
+
+# Start teosd when the container starts
+ENTRYPOINT [ "/entrypoint.sh" ]
diff --git a/docker/README.md b/docker/README.md
new file mode 100644
index 00000000..6c4289a6
--- /dev/null
+++ b/docker/README.md
@@ -0,0 +1,113 @@
+## Running `teosd` in a docker container
+A `teos` image can be built from the Dockerfile located in `docker`. You can create the image by running:
+
+	cd rust-teos
+	docker build -f docker/Dockerfile -t teos .
+	
+Then we can create a container by running:
+
+	docker run -it teos
+
+One way to feed `teos` custom config options is to set environment variables:
+
+	docker run -it -e <ENV_VARIABLES> teos
+	
+Notice that the ENV variables are optional, if unset the corresponding default setting is used. The following ENVs are available:
+
+```
+- API_BIND=<teos_api_hostname>
+- API_PORT=<teos_api_port>
+- RPC_BIND=<teos_rpc_hostname>
+- RPC_PORT=<teos_rpc_port>
+- BTC_NETWORK=<btc_network>
+- BTC_RPC_CONNECT=<btc_node_hostname>
+- BTC_RPC_PORT=<btc_node_port>
+- BTC_RPC_USER=<btc_rpc_username>
+- BTC_RPC_PASSWORD=<btc_rpc_password>
+# The following options can be set turned on by setting them to "true"
+- DEBUG=<debug_bool>
+- DEPS_DEBUG=<deps_debug_bool>
+- OVERWRITE_KEY=<overwrite_key_bool>
+- FORCE_UPDATE=<force_update_bool>
+```
+
+### Volume persistence
+
+You may also want to run docker with a volume, so you can have data persistence in `teosd` databases and keys.
+If so, run:
+
+    docker volume create teos-data
+    
+And add the the mount parameter to `docker run`:
+
+    -v teos-data:/home/teos/.teos
+
+If you are running `teosd` and `bitcoind` in the same machine, continue reading for how to create the container based on your OS.
+
+### `bitcoind` running on the same machine (UNIX)
+The easiest way to run both together in the same machine using UNIX is to set the container to use the host network.
+	
+For example, if both `teosd` and `bitcoind` are running on default settings, run:
+    
+```
+docker run \
+  --network=host \
+  --name teos \
+  -v teos-data:/home/teos/.teos \
+  -e BTC_RPC_USER=<btc_rpc_username> \
+  -e BTC_RPC_PASSWORD=<btc_rpc_password> \
+  -it teos
+```
+
+Notice that you may still need to set your RPC authentication details, since, hopefully, your credentials won't match the `teosd` defaults.
+
+### `bitcoind` running on the same machine (OSX or Windows)
+
+Docker for OSX and Windows does not allow to use the host network (nor to use the `docker0` bridge interface). To work around this
+you can use the special `host.docker.internal` domain:
+
+```
+docker run \
+  -p 9814:9814 \
+  -p 8814:8814 \
+  --name teos \
+  -v teos-data:/home/teos/.teos \
+  -e BTC_RPC_CONNECT=host.docker.internal \
+  -e BTC_RPC_USER=<btc_rpc_username> \
+  -e BTC_RPC_PASSWORD=<btc_rpc_password> \
+  -e API_BIND=0.0.0.0 \
+  -e RPC_BIND=0.0.0.0 \
+  -it teos
+```
+
+Notice that we also needed to add `API_BIND=0.0.0.0` and `RPC_BIND=0.0.0.0` to bind the API to all interfaces of the container.
+Otherwise it will bind to `localhost` and we won't be able to send requests to the tower from the host.
+
+### Interacting with a TEOS instance
+
+Once our `teos` instance is running in the container, we can interact with it using `teos-cli`. We have two main ways of doing so:
+
+1) You can open a shell to the Docker instance by calling:
+
+`docker exec -it <CONTAINER_NAME> sh`
+
+Then you can use the `teos-cli` binary from inside the container as you would use it from your host machine.
+
+2) Using `teos-cli` remotely (assuming you have it installed in the source machine) and pointing to the container. To do so, you will need to copy over the necessary credentials to the host machine. To do so, you can follow the instructions in [the main README](https://github.com/talaia-labs/rust-teos/blob/master/README.md#running-teos-cli-remotely).
+
+### Plugging in Tor
+
+You may have noticed, in the above section where the environment variables are covered, that the Tor options are nowhere to be found. That's because these instructions assume that users will likely be setting up Tor in another container.
+
+On the machine where you have Tor running, you can follow [these instructions](https://community.torproject.org/onion-services/setup/) for setting up a hidden service manually.
+
+For instance, if you're running `teosd` in a Docker container on the same machine as where Tor is running, you can create a hidden service from the host machine to hide the IP of the `teosd` API (listening on port 9814 for example). If you're using Linux, you can do so by editing your `torrc` file on the host machine with the below option:
+
+```
+HiddenServiceDir /var/lib/tor/teosd # Path for Linux. This may differ depending on your OS.
+HiddenServicePort 9814 127.0.0.1:9814
+```
+
+Then restart Tor.
+
+If all works correctly, the hidden service public key will be located in the `HiddenServiceDir` you set above, in the file called `hostname`.
diff --git a/docker/entrypoint.sh b/docker/entrypoint.sh
new file mode 100755
index 00000000..f8975af2
--- /dev/null
+++ b/docker/entrypoint.sh
@@ -0,0 +1,66 @@
+#!/bin/sh
+
+# Define the start command
+START_COMMAND="teosd"
+
+# Set the API bind address
+if [[ ! -z ${API_BIND} ]]; then
+    START_COMMAND="$START_COMMAND --apibind $API_BIND"
+fi
+
+# Set the API port
+if [[ ! -z ${API_PORT} ]]; then
+    START_COMMAND="$START_COMMAND --apiport $API_PORT"
+fi
+
+# Set the RPC bind address
+if [[ ! -z ${RPC_BIND} ]]; then
+    START_COMMAND="$START_COMMAND --rpcbind $RPC_BIND"
+fi
+
+# Set the RPC port
+if [[ ! -z ${RPC_PORT} ]]; then
+    START_COMMAND="$START_COMMAND --rpcport $RPC_PORT"
+fi
+
+# Set the Bitcoin network
+if [[ ! -z ${BTC_NETWORK} ]]; then
+    START_COMMAND="$START_COMMAND --btcnetwork $BTC_NETWORK"
+fi
+
+# Set the Bitcoin RPC credentials
+if [[ ! -z ${BTC_RPC_USER} ]]; then
+    START_COMMAND="$START_COMMAND --btcrpcuser $BTC_RPC_USER"
+fi
+
+if [[ ! -z ${BTC_RPC_PASSWORD} ]]; then
+    START_COMMAND="$START_COMMAND --btcrpcpassword $BTC_RPC_PASSWORD"
+fi
+
+# Set the Bitcoin RPC connection details
+if [[ ! -z ${BTC_RPC_CONNECT} ]]; then
+    START_COMMAND="$START_COMMAND --btcrpcconnect $BTC_RPC_CONNECT"
+fi
+
+if [[ ! -z ${BTC_RPC_PORT} ]]; then
+    START_COMMAND="$START_COMMAND --btcrpcport $BTC_RPC_PORT"
+fi
+
+if [ "${DEBUG}" == "true" ]; then
+    START_COMMAND="$START_COMMAND --debug"
+fi
+
+if [ "${DEPS_DEBUG}" == "true" ]; then
+    START_COMMAND="$START_COMMAND --depsdebug"
+fi
+
+if [ "${OVERWRITE_KEY}" == "true" ]; then
+    START_COMMAND="$START_COMMAND --overwritekey"
+fi
+
+if [ "${FORCE_UPDATE}" == "true" ]; then
+    START_COMMAND="$START_COMMAND --forceupdate"
+fi
+
+# Start the TEOS daemon
+$START_COMMAND