diff --git a/Dockerfile.api b/Dockerfile.api
index 0a9fb85c1b..c004daec25 100644
--- a/Dockerfile.api
+++ b/Dockerfile.api
@@ -1,8 +1,15 @@
-FROM python:3.11
-
-WORKDIR /sqlmesh
-
+FROM python:3.11-slim-bullseye AS venv-image
+RUN apt-get update && apt-get -y install libpq-dev gcc
 COPY setup.py setup.py
 COPY sqlmesh/_version.py sqlmesh/_version.py
+ENV VIRTUAL_ENV=/.venv
+ENV PATH="$VIRTUAL_ENV/bin:$PATH"
+RUN python3 -m venv $VIRTUAL_ENV
+RUN pip3 install -e .[dev,web]
 
-RUN pip install -e .[dev,web]
+FROM python:3.11-slim-bullseye as app-image
+WORKDIR /app
+ENV VIRTUAL_ENV=/opt/venv
+ENV PATH="$VIRTUAL_ENV/bin:$PATH"
+RUN python3 -m venv $VIRTUAL_ENV
+COPY --from=venv-image /.venv $VIRTUAL_ENV
diff --git a/docker-compose.yml b/docker-compose.yml
index ab75e0569a..b0dfa1529d 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -7,7 +7,7 @@ services:
     build:
       context: .
       dockerfile: Dockerfile.api
-    command: python web/server/openapi.py
+    command: python3 web/server/openapi.py
     volumes:
       - .:/sqlmesh
 
@@ -37,7 +37,7 @@ services:
     build:
       context: .
       dockerfile: Dockerfile.api
-    command: python -m uvicorn web.server.main:app --host 0.0.0.0 --port 8000 --reload --reload-dir /sqlmesh/web/server --reload-dir /sqlmesh/sqlmesh --timeout-keep-alive 300 --timeout-graceful-shutdown 1
+    command: python3 -m uvicorn web.server.main:app --host 0.0.0.0 --port 8000 --reload --reload-dir /sqlmesh/web/server --reload-dir /sqlmesh/sqlmesh --timeout-keep-alive 300 --timeout-graceful-shutdown 1
     ports:
       - 8000:8000
     volumes: