diff --git a/backend/danswer/configs/model_configs.py b/backend/danswer/configs/model_configs.py
index 511758ba8..b5747fa6d 100644
--- a/backend/danswer/configs/model_configs.py
+++ b/backend/danswer/configs/model_configs.py
@@ -81,3 +81,11 @@ GEN_AI_MAX_OUTPUT_TOKENS = int(os.environ.get("GEN_AI_MAX_OUTPUT_TOKENS", "512")
 
 # Danswer custom Deep Learning Models
 INTENT_MODEL_VERSION = "danswer/intent-model"
+
+#####
+# OpenAI Azure
+#####
+API_BASE_OPENAI = os.environ.get("API_BASE_OPENAI", "")
+API_TYPE_OPENAI = os.environ.get("API_TYPE_OPENAI", "").lower()
+API_VERSION_OPENAI = os.environ.get("API_VERSION_OPENAI", "")
+AZURE_DEPLOYMENT_ID = os.environ.get("AZURE_DEPLOYMENT_ID", "") # used interchangeably with "engine" parameter
\ No newline at end of file
diff --git a/backend/danswer/direct_qa/open_ai.py b/backend/danswer/direct_qa/open_ai.py
index a76604427..528d6818b 100644
--- a/backend/danswer/direct_qa/open_ai.py
+++ b/backend/danswer/direct_qa/open_ai.py
@@ -17,6 +17,10 @@ from danswer.chunking.models import InferenceChunk
 from danswer.configs.app_configs import INCLUDE_METADATA
 from danswer.configs.model_configs import GEN_AI_MAX_OUTPUT_TOKENS
 from danswer.configs.model_configs import GEN_AI_MODEL_VERSION
+from danswer.configs.model_configs import API_BASE_OPENAI
+from danswer.configs.model_configs import API_TYPE_OPENAI
+from danswer.configs.model_configs import API_VERSION_OPENAI
+from danswer.configs.model_configs import AZURE_DEPLOYMENT_ID
 from danswer.direct_qa.exceptions import OpenAIKeyMissing
 from danswer.direct_qa.interfaces import DanswerAnswer
 from danswer.direct_qa.interfaces import DanswerQuote
@@ -38,6 +42,12 @@ logger = setup_logger()
 
 F = TypeVar("F", bound=Callable)
 
+if API_BASE_OPENAI:
+    openai.api_base = API_BASE_OPENAI
+if API_TYPE_OPENAI in ["azure"]: #TODO: Azure AD support ["azure_ad", "azuread"]
+    openai.api_type = API_TYPE_OPENAI
+    openai.api_version = API_VERSION_OPENAI
+
 
 def _ensure_openai_api_key(api_key: str | None) -> str:
     try:
@@ -55,6 +65,7 @@ def _build_openai_settings(**kwargs: Any) -> dict[str, Any]:
         "top_p": 1,
         "frequency_penalty": 0,
         "presence_penalty": 0,
+        **({"deployment_id": AZURE_DEPLOYMENT_ID} if AZURE_DEPLOYMENT_ID else {}),
         **kwargs,
     }
 
diff --git a/deployment/docker_compose/docker-compose.dev.yml b/deployment/docker_compose/docker-compose.dev.yml
index 293e7f404..0c5a551bc 100644
--- a/deployment/docker_compose/docker-compose.dev.yml
+++ b/deployment/docker_compose/docker-compose.dev.yml
@@ -34,6 +34,10 @@ services:
       - GOOGLE_OAUTH_CLIENT_ID=${GOOGLE_OAUTH_CLIENT_ID:-}
       - GOOGLE_OAUTH_CLIENT_SECRET=${GOOGLE_OAUTH_CLIENT_SECRET:-}
       - DISABLE_GENERATIVE_AI=${DISABLE_GENERATIVE_AI:-}
+      - API_BASE_OPENAI${API_BASE_OPENAI:-}
+      - API_TYPE_OPENAI=${API_TYPE_OPENAI:-}
+      - API_VERSION_OPENAI=${API_VERSION_OPENAI:-}
+      - AZURE_DEPLOYMENT_ID=${AZURE_DEPLOYMENT_ID:-}
     volumes:
       - local_dynamic_storage:/home/storage
       - file_connector_tmp_storage:/home/file_connector_storage
diff --git a/deployment/docker_compose/env.prod.template b/deployment/docker_compose/env.prod.template
index f3eeda318..83755748c 100644
--- a/deployment/docker_compose/env.prod.template
+++ b/deployment/docker_compose/env.prod.template
@@ -11,6 +11,12 @@ INTERNAL_MODEL_VERSION=openai-chat-completion
 # Use a valid model for the choice above, consult https://platform.openai.com/docs/models/model-endpoint-compatibility
 GEN_AI_MODEL_VERSION=gpt-4
 
+# Neccessary environment variables for Azure OpenAI:
+API_BASE_OPENAI=
+API_TYPE_OPENAI=
+API_VERSION_OPENAI=
+AZURE_DEPLOYMENT_ID=
+
 # Could be something like danswer.companyname.com. Requires additional setup if not localhost
 WEB_DOMAIN=http://localhost:3000
 
@@ -47,3 +53,4 @@ SMTP_SERVER=
 SMTP_PORT=
 SMTP_USER=
 SMTP_PASS=
+