diff --git a/physical/postgresql/postgresql.go b/physical/postgresql/postgresql.go
index dbd3a0d2ef773..596b6c519bea0 100644
--- a/physical/postgresql/postgresql.go
+++ b/physical/postgresql/postgresql.go
@@ -4,6 +4,7 @@ import (
 	"context"
 	"database/sql"
 	"fmt"
+	"os"
 	"strconv"
 	"strings"
 	"sync"
@@ -88,8 +89,8 @@ type PostgreSQLLock struct {
 // API client, server address, credentials, and database.
 func NewPostgreSQLBackend(conf map[string]string, logger log.Logger) (physical.Backend, error) {
 	// Get the PostgreSQL credentials to perform read/write operations.
-	connURL, ok := conf["connection_url"]
-	if !ok || connURL == "" {
+	connURL := connectionURL(conf)
+	if connURL == "" {
 		return nil, fmt.Errorf("missing connection_url")
 	}
 
@@ -197,6 +198,19 @@ func NewPostgreSQLBackend(conf map[string]string, logger log.Logger) (physical.B
 	return m, nil
 }
 
+// connectionURL first check the environment variables for a connection URL. If
+// no connection URL exists in the environment variable, the Vault config file is
+// checked. If neither the environment variables or the config file set the connection
+// URL for the Postgres backend, because it is a required field, an error is returned.
+func connectionURL(conf map[string]string) string {
+	connURL := conf["connection_url"]
+	if envURL := os.Getenv("VAULT_PG_CONNECTION_URL"); envURL != "" {
+		connURL = envURL
+	}
+
+	return connURL
+}
+
 // splitKey is a helper to split a full path key into individual
 // parts: parentPath, path, key
 func (m *PostgreSQLBackend) splitKey(fullPath string) (string, string, string) {
diff --git a/physical/postgresql/postgresql_test.go b/physical/postgresql/postgresql_test.go
index 20cb8ae0b78b4..759e1a0673b19 100644
--- a/physical/postgresql/postgresql_test.go
+++ b/physical/postgresql/postgresql_test.go
@@ -114,6 +114,67 @@ func TestPostgreSQLBackendMaxIdleConnectionsParameter(t *testing.T) {
 	}
 }
 
+func TestConnectionURL(t *testing.T) {
+	type input struct {
+		envar string
+		conf  map[string]string
+	}
+
+	var cases = map[string]struct {
+		want  string
+		input input
+	}{
+		"environment_variable_not_set_use_config_value": {
+			want: "abc",
+			input: input{
+				envar: "",
+				conf:  map[string]string{"connection_url": "abc"},
+			},
+		},
+
+		"no_value_connection_url_set_key_exists": {
+			want: "",
+			input: input{
+				envar: "",
+				conf:  map[string]string{"connection_url": ""},
+			},
+		},
+
+		"no_value_connection_url_set_key_doesnt_exist": {
+			want: "",
+			input: input{
+				envar: "",
+				conf:  map[string]string{},
+			},
+		},
+
+		"environment_variable_set": {
+			want: "abc",
+			input: input{
+				envar: "abc",
+				conf:  map[string]string{"connection_url": "def"},
+			},
+		},
+	}
+
+	for name, tt := range cases {
+		t.Run(name, func(t *testing.T) {
+			// This is necessary to avoid always testing the branch where the env is set.
+			// As long the the env is set --- even if the value is "" --- `ok` returns true.
+			if tt.input.envar != "" {
+				os.Setenv("VAULT_PG_CONNECTION_URL", tt.input.envar)
+				defer os.Unsetenv("VAULT_PG_CONNECTION_URL")
+			}
+
+			got := connectionURL(tt.input.conf)
+
+			if got != tt.want {
+				t.Errorf("connectionURL(%s): want '%s', got '%s'", tt.input, tt.want, got)
+			}
+		})
+	}
+}
+
 // Similar to testHABackend, but using internal implementation details to
 // trigger the lock failure scenario by setting the lock renew period for one
 // of the locks to a higher value than the lock TTL.
diff --git a/website/source/docs/configuration/storage/postgresql.html.md b/website/source/docs/configuration/storage/postgresql.html.md
index 8ee819520efa2..59c192cbfbf84 100644
--- a/website/source/docs/configuration/storage/postgresql.html.md
+++ b/website/source/docs/configuration/storage/postgresql.html.md
@@ -93,7 +93,8 @@ LANGUAGE plpgsql;
 ## `postgresql` Parameters
 
 - `connection_url` `(string: <required>)` – Specifies the connection string to
-  use to authenticate and connect to PostgreSQL. A full list of supported
+  use to authenticate and connect to PostgreSQL. The connection URL can also be
+  set using the `VAULT_PG_CONNECTION_URL` environment variable. A full list of supported
   parameters can be found in [the pq library documentation][pglib]. For example
   connection string URLs, see the examples section below.