diff --git a/docs/install/olake-ui/index.mdx b/docs/install/olake-ui/index.mdx
index c53bef59..96a1ff81 100644
--- a/docs/install/olake-ui/index.mdx
+++ b/docs/install/olake-ui/index.mdx
@@ -132,17 +132,51 @@ x-app-defaults:
 
 This will create and use `/custom/path/to/olake-data` instead of the default `./olake-data` directory.
 
+### External PostgreSQL Configuration
+
+OLake supports using an **external PostgreSQL instance** instead of the built-in Postgres service included in the docker-compose file. This PostgreSQL stores all job data, configurations, sync state, and Temporal workflow data.
+
+Within the [compose file](https://raw.githubusercontent.com/datazip-inc/olake-ui/master/docker-compose.yml), an extension field named `x-db-envs` defines all database configuration values used by OLake and Temporal. These values can be modified to point to the external PostgreSQL instance.
+
+```yaml
+x-db-envs:
+  DB_HOST: &DBHost postgresql
+  DB_PORT: &DBPort 5432
+  DB_USER: &DBUser temporal
+  DB_PASSWORD: &DBPassword temporal
+  DB_SSLMODE: &DBSSLMode disable
+  OLAKE_DB_NAME: &olakeDBName postgres
+  TEMPORAL_DB_NAME: &temporalDBName temporal
+```
+
+If connection to external PostgreSQL instance is over TLS, the following variables need to be uncommented under `services.temporal.env` section in the compose file:
+
+```yaml
+  # for TLS enabled external postgres database
+  SQL_TLS: true
+  SQL_TLS_DISABLE_HOST_VERIFICATION: true
+  SQL_TLS_ENABLED: true
+  SQL_HOST_VERIFICATION: false
+```
+
+:::info **Optional**
+A separate PostgreSQL container (`postgresql` service) is included by default.
+When an external database is used, this service is not needed and can be stopped after all the services are started and healthy.
+:::
+
 ### Service Environment Variables
 
-Key environment variables that can be customized within specific services:
+Key environment variables that can be customized within `x-envs` section. These variables are automatically injected into the `olake-ui` and `olake-worker` containers:
 
 ```yaml
-services:
-  olake-ui:
-    environment:
-      PERSISTENT_DIR: *hostPersistencePath
-      POSTGRES_DB: "postgres://olake:olake@postgresql:5432/olakedb"
-      OLAKE_SECRET_KEY: *encryptionKey
+x-envs:
+  shared: &sharedEnvs
+    CONTAINER_REGISTRY_BASE: ${CONTAINER_REGISTRY_BASE:-registry-1.docker.io}
+    OLAKE_SECRET_KEY: *encryptionKey
+    PERSISTENT_DIR: *hostPersistencePath
+    FOO: bar
+    KEY: value
+    NAME: example
 ```
 
 ### Data Persistence