diff --git a/docs/DeploymentGuide.md b/docs/DeploymentGuide.md
index ae1277834..cb9d0789a 100644
--- a/docs/DeploymentGuide.md
+++ b/docs/DeploymentGuide.md
@@ -194,6 +194,14 @@ Once you've opened the project in [Codespaces](#github-codespaces), [Dev Contain
 
      - Follow steps in [Delete Resource Group](./DeleteResourceGroup.md) if your deployment fails and/or you need to clean up the resources.
 
+## Environment configuration for local development & debugging
+> Set APP_ENV in your .env file to control Azure authentication. Set the environment variable to dev to use Azure CLI credentials, or to prod to use Managed Identity for production. **Ensure you're logged in via az login when using dev in local**.
+To configure your environment, follow these steps:
+1. Navigate to the `src` folder.
+2. Create a `.env` file based on the `.env.sample` file.
+3. Fill in the `.env` file using the deployment output or by checking the Azure Portal under "Deployments" in your resource group.
+4. Ensure that `APP_ENV` is set to "**dev**" in your `.env` file.
+
 ## Next Steps
 Now that you've completed your deployment, you can start using the solution.