diff --git a/.gitignore b/.gitignore
index 98455bb4..e3d4fda9 100644
--- a/.gitignore
+++ b/.gitignore
@@ -1,5 +1,6 @@
 node_modules/
 */.env
+.env
 .DS_Store
 mediator/dist
 mediator/coverage
diff --git a/configurator/config/index.js b/configurator/config/index.js
index 68dce649..086c95a3 100644
--- a/configurator/config/index.js
+++ b/configurator/config/index.js
@@ -1,19 +1,38 @@
-require('dotenv/config');
+const dotenv = require('dotenv');
+const path = require('path');
 
-const OPENHIM_API_HOSTNAME = process.env.OPENHIM_API_HOSTNAME || 'openhim-core';
-const OPENHIM_API_PASSWORD =
-  process.env.OPENHIM_PASSWORD || 'openhim-password';
-const OPENHIM_API_PORT = process.env.OPENHIM_API_PORT || 8080;
-const OPENHIM_API_USERNAME =
-  process.env.OPENHIM_USERNAME || 'root@openhim.org';
-const OPENHIM_CLIENT_PASSWORD = process.env.OPENHIM_CLIENT_PASSWORD || 'interop-password';
-const OPENHIM_USER_PASSWORD = process.env.OPENHIM_USER_PASSWORD || 'interop-password';
+const isDocker = process.env.DOCKER_ENV === 'true';
+const isTest = process.env.NODE_ENV === 'integration';
+
+if (!isDocker && !isTest) {
+  const envPath = path.resolve(__dirname, '../.env');
+  const res = dotenv.config({ path: envPath });
+
+  if (res.error) {
+    throw new Error(`Error loading .env file at ${ envPath }: ${ res.error }`);
+  }
+}
+
+const getEnv = (key) => {
+  const value = process.env[key];
+  if (!value || value.trim() === '') {
+    throw new Error(
+      `Missing required environment variable: ${key}`
+    );
+  }
+  return value.trim();
+};
+
+const OPENHIM_API_URL = getEnv('OPENHIM_API_URL');
+const OPENHIM_API_USERNAME = getEnv('OPENHIM_USERNAME');
+const OPENHIM_API_PASSWORD = getEnv('OPENHIM_PASSWORD');
+const OPENHIM_CLIENT_PASSWORD = getEnv('OPENHIM_CLIENT_PASSWORD');
+const OPENHIM_USER_PASSWORD = getEnv('OPENHIM_USER_PASSWORD');
 
 module.exports = {
-  OPENHIM_API_HOSTNAME,
-  OPENHIM_API_PASSWORD,
-  OPENHIM_API_PORT,
+  OPENHIM_API_URL,
   OPENHIM_API_USERNAME,
+  OPENHIM_API_PASSWORD,
   OPENHIM_CLIENT_PASSWORD,
-  OPENHIM_USER_PASSWORD
+  OPENHIM_USER_PASSWORD,
 };
diff --git a/configurator/env.template b/configurator/env.template
index 8c172f48..44445c53 100644
--- a/configurator/env.template
+++ b/configurator/env.template
@@ -1,6 +1,7 @@
-OPENHIM_API_HOSTNAME = 'localhost';
-OPENHIM_API_PORT = 8080;
-OPENHIM_PASSWORD = 'openhim-password';
-OPENHIM_USERNAME = 'root@openhim.org';
-OPENHIM_CLIENT_PASSWORD = 'interop-password';
-OPENHIM_USER_PASSWORD = 'interop-password';
+COUCHDB_USER=admin
+COUCHDB_PASSWORD=password
+OPENHIM_API_URL=https://openhim-core:8080
+OPENHIM_PASSWORD=openhim-password
+OPENHIM_USERNAME=root@openhim.org
+OPENHIM_CLIENT_PASSWORD=interop-password
+OPENHIM_USER_PASSWORD=interop-password
diff --git a/configurator/libs/authentication.js b/configurator/libs/authentication.js
index 71c09bda..b2289732 100644
--- a/configurator/libs/authentication.js
+++ b/configurator/libs/authentication.js
@@ -1,7 +1,8 @@
 const crypto = require('crypto');
 const {
-  OPENHIM_API_USERNAME, OPENHIM_API_PASSWORD,
-  OPENHIM_API_HOSTNAME, OPENHIM_API_PORT
+  OPENHIM_API_USERNAME,
+  OPENHIM_API_PASSWORD,
+  OPENHIM_API_URL,
 } = require('../config');
 const {fetch} = require('../utils');
 
@@ -44,7 +45,7 @@ const generateAuthHeaders = async (options) => {
 
 function generateApiOptions (endpoint) {
   return {
-    apiURL: `https://${OPENHIM_API_HOSTNAME}:${OPENHIM_API_PORT}`,
+    apiURL: OPENHIM_API_URL,
     apiEndpoint: endpoint,
     username: OPENHIM_API_USERNAME,
     password: OPENHIM_API_PASSWORD,
diff --git a/docker/docker-compose.mediator.yml b/docker/docker-compose.mediator.yml
index 4a001d43..6918fbc0 100644
--- a/docker/docker-compose.mediator.yml
+++ b/docker/docker-compose.mediator.yml
@@ -1,46 +1,32 @@
 services:
   mediator:
-    build: 
+    build:
       context: ../mediator
       dockerfile: ./Dockerfile
     container_name: mediator
     ports:
       - "6000:6000"
+    env_file:
+      - ../mediator/.env
     environment:
-      - "OPENHIM_USERNAME=${OPENHIM_USERNAME:-interop@openhim.org}"
-      - "OPENHIM_PASSWORD=${OPENHIM_PASSWORD:-interop-password}"
-      - "OPENHIM_API_URL=${OPENHIM_API_URL:-https://openhim-core:8080}"
-      - "PORT=${PORT:-6000}"
-      - "FHIR_URL=${FHIR_URL:-http://openhim-core:5001/fhir}"
-      - "FHIR_USERNAME=${FHIR_USERNAME:-interop-client}"
-      - "FHIR_PASSWORD=${FHIR_PASSWORD:-interop-password}"
-      - "CHT_URL=${CHT_URL:-https://nginx}"
-      - "CHT_USERNAME=${CHT_USERNAME:-admin}"
-      - "CHT_PASSWORD=${CHT_PASSWORD:-password}"
-
+      - DOCKER_ENV=true
     depends_on:
       - configurator
     restart: 'unless-stopped'
     networks:
       - cht-net
-    
+
   configurator:
     build:
       context: ../
       dockerfile: ./configurator/Dockerfile
+    env_file:
+      - ../configurator/.env
     environment:
-      - "COUCHDB_USER=${COUCHDB_USER:-admin}"
-      - "COUCHDB_PASSWORD=${COUCHDB_PASSWORD:-password}"
-      - "OPENHIM_API_HOSTNAME=${OPENHIM_API_HOSTNAME:-openhim-core}"
-      - "OPENHIM_API_PORT=${OPENHIM_API_PORT:-8080}"
-      - "OPENHIM_PASSWORD=${OPENHIM_PASSWORD:-openhim-password}"
-      - "OPENHIM_USERNAME=${OPENHIM_USERNAME:-root@openhim.org}"
-      - "OPENHIM_CLIENT_PASSWORD=${OPENHIM_CLIENT_PASSWORD:-interop-password}"
-      - "OPENHIM_USER_PASSWORD=${OPENHIM_USER_PASSWORD:-interop-password}"
+      - DOCKER_ENV=true
     networks:
       - cht-net
 
 networks:
   cht-net:
     name: ${CHT_NETWORK:-cht-net}
-      
diff --git a/mediator/config/index.ts b/mediator/config/index.ts
index 7ca72253..74c9a40e 100644
--- a/mediator/config/index.ts
+++ b/mediator/config/index.ts
@@ -1,32 +1,44 @@
 import * as dotenv from 'dotenv';
-dotenv.config();
+import path from 'path';
 
-export const PORT = process.env.PORT || 6000;
+const isDocker = process.env.DOCKER_ENV === 'true';
+const isTest = process.env.NODE_ENV === 'integration';
+
+if (!isDocker && !isTest) {
+  const envPath = path.resolve(__dirname, '../.env');
+  const res = dotenv.config({
+    path: envPath
+  });
+  if (res.error) {
+    throw new Error(`Error loading .env file at ${envPath}: ${res.error}`);
+  }
+}
+
+export const PORT = getEnvironmentVariable('PORT');
 
 export const OPENHIM = {
-  username: getEnvironmentVariable('OPENHIM_USERNAME', 'interop@openhim.org'),
-  password: getEnvironmentVariable('OPENHIM_PASSWORD', 'interop-password'),
-  apiURL: getEnvironmentVariable('OPENHIM_API_URL', 'https://openhim-core:8080'),
+  username: getEnvironmentVariable('OPENHIM_USERNAME'),
+  password: getEnvironmentVariable('OPENHIM_PASSWORD'),
+  apiURL: getEnvironmentVariable('OPENHIM_API_URL'),
   trustSelfSigned: true,
 };
 
 export const FHIR = {
-  url: getEnvironmentVariable('FHIR_URL', 'http://openhim-core:5001/fhir'),
-  username: getEnvironmentVariable('FHIR_USERNAME', 'interop-client'),
-  password: getEnvironmentVariable('FHIR_PASSWORD', 'interop-password'),
+  url: getEnvironmentVariable('FHIR_URL'),
+  username: getEnvironmentVariable('FHIR_USERNAME'),
+  password: getEnvironmentVariable('FHIR_PASSWORD'),
 };
 
 export const CHT = {
-  url: getEnvironmentVariable('CHT_URL', 'https://nginx'),
-  username: getEnvironmentVariable('CHT_USERNAME', 'admin'),
-  password: getEnvironmentVariable('CHT_PASSWORD', 'password'),
+  url: getEnvironmentVariable('CHT_URL'),
+  username: getEnvironmentVariable('CHT_USERNAME'),
+  password: getEnvironmentVariable('CHT_PASSWORD'),
 };
 
-
-function getEnvironmentVariable(env: string, def: string) {
-  if (process.env.NODE_ENV === 'test') {
-    return def;
+function getEnvironmentVariable(env: string) {
+  const value = process.env[env];
+  if (typeof value === 'undefined' || value === '') {
+    throw new Error(`Missing required environment variable: ${env}`);
   }
-  
-  return process.env[env] || def;
+  return value;
 }
diff --git a/mediator/env.template b/mediator/env.template
index 1bd413bc..bb6d1aa1 100644
--- a/mediator/env.template
+++ b/mediator/env.template
@@ -1,10 +1,10 @@
-OPENHIM_USERNAME = "interop@openhim.org"
-OPENHIM_PASSWORD = "password"
-OPENHIM_API_URL = "https://openhim-core:8080"
-PORT = 6000
-FHIR_URL = http://openhim-core:5001/fhir
-FHIR_USERNAME = interop-client
-FHIR_PASSWORD = interop-password
-CHT_URL = http://nginx
-CHT_USERNAME = medic
-CHT_PASSWORD = password
+OPENHIM_USERNAME=interop@openhim.org
+OPENHIM_PASSWORD=interop-password
+OPENHIM_API_URL=https://openhim-core:8080
+PORT=6000
+FHIR_URL=http://openhim-core:5001/fhir
+FHIR_USERNAME=interop-client
+FHIR_PASSWORD=interop-password
+CHT_URL=https://nginx
+CHT_USERNAME=admin
+CHT_PASSWORD=password
diff --git a/mediator/jest.config.js b/mediator/jest.base.config.js
similarity index 100%
rename from mediator/jest.config.js
rename to mediator/jest.base.config.js
diff --git a/mediator/jest.e2e.config.js b/mediator/jest.e2e.config.js
new file mode 100644
index 00000000..7264b12d
--- /dev/null
+++ b/mediator/jest.e2e.config.js
@@ -0,0 +1,10 @@
+const baseConfig = require('./jest.base.config.js');
+
+module.exports = {
+  ...baseConfig,
+  displayName: 'e2e',
+  testMatch: [
+    '<rootDir>/test/**/*.spec.ts',
+  ],
+  // Note: setupFilesAfterEnv is not included here
+};
diff --git a/mediator/jest.setup.ts b/mediator/jest.setup.ts
new file mode 100644
index 00000000..6a5b1a57
--- /dev/null
+++ b/mediator/jest.setup.ts
@@ -0,0 +1,21 @@
+jest.mock('dotenv', () => ({
+  config: jest.fn(() => {
+    // Set the environment variables you need for your tests
+    process.env.DOCKER_ENV = 'false';
+    process.env.PORT = '8080';
+    process.env.OPENHIM_USERNAME = 'mock_openhim_user';
+    process.env.OPENHIM_PASSWORD = 'mock_openhim_password';
+    process.env.OPENHIM_API_URL = 'http://mock-openhim.com';
+    process.env.FHIR_URL = 'http://mock-fhir.com';
+    process.env.FHIR_USERNAME = 'mock_fhir_user';
+    process.env.FHIR_PASSWORD = 'mock_fhir_password';
+    process.env.CHT_URL = 'http://mock-cht.com';
+    process.env.CHT_USERNAME = 'mock_cht_user';
+    process.env.CHT_PASSWORD = 'mock_cht_password';
+    return { error: null };
+  }),
+}));
+
+jest.mock('path', () => ({
+  resolve: jest.fn(() => '/mock/path/.env'),
+}));
diff --git a/mediator/jest.unit.config.js b/mediator/jest.unit.config.js
new file mode 100644
index 00000000..1f662383
--- /dev/null
+++ b/mediator/jest.unit.config.js
@@ -0,0 +1,11 @@
+const baseConfig = require('./jest.base.config.js');
+
+module.exports = {
+  ...baseConfig,
+  displayName: 'unit',
+  testMatch: [
+    '<rootDir>/src/**/*.spec.ts',
+    '!<rootDir>/test/**/*',
+  ],
+  setupFilesAfterEnv: ['./jest.setup.ts'],
+};
diff --git a/mediator/package.json b/mediator/package.json
index bd1c1e2b..22cc6e07 100644
--- a/mediator/package.json
+++ b/mediator/package.json
@@ -11,7 +11,7 @@
     "test:watch": "jest --watch",
     "coverage": "jest --coverage",
     "clean": "rm -rf ./dist",
-    "unit-test": "jest src/",
+    "unit-test": "jest --config ./jest.unit.config.js",
     "e2e-test": "test/e2e-test.sh"
   },
   "repository": {
diff --git a/mediator/src/utils/cht.ts b/mediator/src/utils/cht.ts
index e0c96000..7f357b24 100644
--- a/mediator/src/utils/cht.ts
+++ b/mediator/src/utils/cht.ts
@@ -2,7 +2,6 @@ import axios from 'axios';
 import { CHT } from '../../config';
 import { generateBasicAuthUrl } from './url';
 import https from 'https';
-import path from 'path';
 
 export async function createChtRecord(patientId: string) {
   const record = {
@@ -24,5 +23,6 @@ export async function createChtRecord(patientId: string) {
 
 export const generateChtRecordsApiUrl = (chtUrl: string, username: string, password: string) => {
   const endpoint = generateBasicAuthUrl(chtUrl, username, password);
-  return path.join(endpoint, '/api/v2/records');
+
+  return new URL('/api/v2/records', endpoint).toString();
 };
diff --git a/mediator/test/e2e-test.sh b/mediator/test/e2e-test.sh
index ff3922a5..4b38a7b7 100755
--- a/mediator/test/e2e-test.sh
+++ b/mediator/test/e2e-test.sh
@@ -1,7 +1,9 @@
 #!/bin/bash
 set -e
 BASEDIR="$( cd "$( dirname "${BASH_SOURCE[0]}" )" && cd .. && cd .. && pwd )"
-MEDIATORDIR="${BASEDIR}/mediator"
+MEDIATOR_DIR="${BASEDIR}/mediator"
+MEDIATOR_ENV_FILE="${MEDIATOR_DIR}/.env"
+CONFIGURATOR_ENV_FILE="${BASEDIR}/configurator/.env"
 
 export NODE_ENV=integration
 export NODE_TLS_REJECT_UNAUTHORIZED=0
@@ -21,19 +23,70 @@ retry_startup() {
   fi
 }
 
+file_check_and_create() {
+    local filename="$1"
+    if [ ! -f "$filename" ]; then
+        touch "$filename"
+        echo true
+    else
+        echo false
+    fi
+}
+
 echo 'Cleanup from last test, in case of interruptions...'
 cd $BASEDIR
+# ensure .env file exists, this won't overwrite an existing file
+# .env is required when destroying the containers
+MEDIATOR_ENV_FILE_CREATED=$(file_check_and_create "$MEDIATOR_ENV_FILE")
+CONFIGURATOR_ENV_FILE_CREATED=$(file_check_and_create "$CONFIGURATOR_ENV_FILE")
 ./startup.sh destroy
 
 echo 'Starting the interoperability containers...'
 cd $BASEDIR
+# Only write to .env file if it doesn't exist
+if [ "$MEDIATOR_ENV_FILE_CREATED" = true ]; then
+    # Write environment variables to .env file for mediator container
+    cat > "$MEDIATOR_ENV_FILE" << EOF
+NODE_ENV=${NODE_ENV}
+NODE_TLS_REJECT_UNAUTHORIZED=${NODE_TLS_REJECT_UNAUTHORIZED}
+OPENHIM_USERNAME=interop@openhim.org
+OPENHIM_PASSWORD=interop-password
+OPENHIM_API_URL=https://openhim-core:8080
+PORT=6000
+FHIR_URL=http://openhim-core:5001/fhir
+FHIR_USERNAME=interop-client
+FHIR_PASSWORD=interop-password
+CHT_URL=https://nginx
+CHT_USERNAME=admin
+CHT_PASSWORD=password
+EOF
+    echo "Created mediator/.env file with test environment variables"
+else
+    echo "Using existing mediator/.env file"
+fi
+
+if [ "$CONFIGURATOR_ENV_FILE_CREATED" = true ]; then
+    # Write environment variables to .env file for configurator container
+    cat > "$CONFIGURATOR_ENV_FILE" << EOF
+COUCHDB_USER=admin
+COUCHDB_PASSWORD=password
+OPENHIM_API_URL=https://openhim-core:8080
+OPENHIM_PASSWORD=openhim-password
+OPENHIM_USERNAME=root@openhim.org
+OPENHIM_CLIENT_PASSWORD=interop-password
+OPENHIM_USER_PASSWORD=interop-password
+EOF
+    echo "Created configurator/.env file with test environment variables"
+else
+    echo "Using existing configurator/.env file"
+fi
 retry_startup
 
 echo 'Waiting for configurator to finish...'
 docker container wait chis-interop-configurator-1
 
 echo 'Executing mediator e2e tests...'
-cd $MEDIATORDIR
+cd $MEDIATOR_DIR
 export OPENHIM_API_URL='https://localhost:8080'
 export FHIR_URL='http://localhost:5001'
 export CHT_URL='http://localhost:5988'
@@ -43,7 +96,10 @@ export FHIR_USERNAME='interop-client'
 export FHIR_PASSWORD='interop-password'
 export CHT_USERNAME='admin'
 export CHT_PASSWORD='password'
-npm test ltfu-flow.spec.ts
+export PORT=6000
+export OPENHIM_CLIENT_PASSWORD='interop-password'
+export OPENHIM_USER_PASSWORD='interop-password'
+jest --config ./jest.e2e.config.js
 
 echo 'Cleanup after test...'
 unset NODE_ENV
@@ -57,6 +113,20 @@ unset FHIR_USERNAME
 unset FHIR_PASSWORD
 unset CHT_USERNAME
 unset CHT_PASSWORD
+unset PORT
+unset OPENHIM_CLIENT_PASSWORD
+unset OPENHIM_USER_PASSWORD
 cd $BASEDIR
 ./startup.sh destroy
 
+if [ "$MEDIATOR_ENV_FILE_CREATED" = true ]; then
+    echo "Deleting the mediator env file we created: $MEDIATOR_ENV_FILE"
+    rm "$MEDIATOR_ENV_FILE"
+fi
+
+if [ "$CONFIGURATOR_ENV_FILE_CREATED" = true ]; then
+    echo "Deleting the configurator env file we created: $CONFIGURATOR_ENV_FILE"
+    rm "$CONFIGURATOR_ENV_FILE"
+fi
+
+echo 'Finish'