diff --git a/docs/guides/configuration.md b/docs/guides/configuration.md
index 88c7840..b24472f 100644
--- a/docs/guides/configuration.md
+++ b/docs/guides/configuration.md
@@ -244,7 +244,7 @@ When creating a new project or external app, dependency versions in `pyproject.t
 
 ```toml
 [tool.poetry.dependencies]
-python = "^3.11"
+python = ">=3.11,<4.0"
 fastapi = ">=0.120.0,<0.130"  # Specific range instead of *
 sqlalchemy = ">=2.0,<3.0"
 alembic = ">=1.17.2,<1.18"
diff --git a/docs/guides/deployment.md b/docs/guides/deployment.md
index c6a5ff7..47b0571 100644
--- a/docs/guides/deployment.md
+++ b/docs/guides/deployment.md
@@ -23,7 +23,7 @@ Update dependency versions in `pyproject.toml` from `*` to specific ranges for p
 
 ```toml
 [tool.poetry.dependencies]
-python = "^3.11"
+python = ">=3.11,<4.0"
 fastapi = ">=0.120.0,<0.130"
 sqlalchemy = ">=2.0,<3.0"
 alembic = ">=1.17.2,<1.18"
diff --git a/fastappkit/cli/app.py b/fastappkit/cli/app.py
index 8c5bab1..e986f5c 100644
--- a/fastappkit/cli/app.py
+++ b/fastappkit/cli/app.py
@@ -126,8 +126,10 @@ def new(
                 ("app/external/__init__.py.j2", f"{name}/{name}/__init__.py"),
                 ("app/external/models.py.j2", f"{name}/{name}/models.py"),
                 ("app/external/router.py.j2", f"{name}/{name}/router.py"),
+                ("app/external/config.py.j2", f"{name}/{name}/config.py"),
                 ("app/external/pyproject.toml.j2", f"{name}/pyproject.toml"),
                 ("app/external/README.md.j2", f"{name}/README.md"),
+                ("app/external/main.py.j2", f"{name}/main.py"),
             ]
 
             # Create fastappkit.toml INSIDE package directory (included in package when published)
@@ -172,6 +174,11 @@ def new(
                 context,
             )
             output.verbose("Created .gitignore")
+
+            # Create .env from env.example template
+            env_example_content = template_engine.render("app/external/env.example.j2", context)
+            (app_path / ".env").write_text(env_example_content, encoding="utf-8")
+            output.verbose("Created .env")
         else:
             # Internal app templates
             # Internal apps don't have their own migrations - they use core's migrations
@@ -205,7 +212,9 @@ def new(
             output.info("\nNext steps:")
             output.info(f"  cd {name}")
             output.info("  pip install -e .  # Install the package")
-            output.info(f"  # Add '{name}' to fastappkit.toml apps list")
+            output.info("  # Configure .env file (DATABASE_URL, DEBUG, etc.)")
+            output.info("  # Run independently: uvicorn main:app --reload")
+            output.info("  # Or add to fastappkit.toml apps list in a core project")
             output.info(f"  fastappkit migrate app {name} makemigrations")
             output.warning(
                 "\n⚠️  Note: Dependency versions in pyproject.toml are set to '*' (any version)."
diff --git a/fastappkit/cli/templates/app/external/README.md.j2 b/fastappkit/cli/templates/app/external/README.md.j2
index 5ca0827..9830e88 100644
--- a/fastappkit/cli/templates/app/external/README.md.j2
+++ b/fastappkit/cli/templates/app/external/README.md.j2
@@ -8,9 +8,68 @@ External pluggable app for fastappkit.
 pip install -e .
 ```
 
-## Usage
+## Configuration
 
-Add to your `fastappkit.toml`:
+This app uses a `.env` file for configuration. A `.env` file is created automatically when you create the app.
+
+**Configure your environment:**
+
+1. Edit the `.env` file in the app root directory:
+   ```bash
+   # Database Configuration
+   DATABASE_URL=sqlite:///./{{ app_name }}.db
+
+   # Development Settings
+   DEBUG=false
+   ```
+
+2. For production or different databases, update `DATABASE_URL`:
+   ```bash
+   DATABASE_URL=postgresql://user:password@localhost/{{ app_name }}
+   ```
+
+The `.env` file is automatically loaded by `config.py` using `pydantic-settings`.
+
+## Independent Development
+
+This external app can be developed and tested independently without requiring a full fastappkit project.
+
+### Running the Server
+
+Start the development server:
+
+```bash
+# From the app root directory
+uvicorn main:app --reload
+```
+
+Or use Python directly:
+
+```bash
+python main.py
+```
+
+The server will start on `http://127.0.0.1:8000` with the app's routes available at `/{{ app_name }}/`.
+
+### Project Structure
+
+```
+{{ app_name }}/
+├── {{ app_name }}/          # Package directory
+│   ├── __init__.py          # register() function
+│   ├── models.py            # SQLAlchemy models
+│   ├── router.py            # FastAPI routes
+│   ├── config.py            # Settings (loads from .env)
+│   └── migrations/          # Alembic migrations
+├── main.py                  # Entry point for independent development
+├── alembic.ini              # Alembic configuration
+├── .env                     # Environment variables (gitignored)
+└── pyproject.toml           # Package metadata
+```
+
+## Usage in a Core Project
+
+To use this app in a fastappkit project, add it to your `fastappkit.toml`:
 
 ```toml
 [tool.fastappkit]
@@ -53,7 +112,9 @@ alembic downgrade -1
 alembic upgrade head --sql
 ```
 
-**Database URL**: Set `DATABASE_URL` environment variable, or edit `alembic.ini` to configure your database.
+**Database URL**: The `DATABASE_URL` is read from the `.env` file automatically. You can also:
+- Set `DATABASE_URL` environment variable (takes precedence)
+- Edit `alembic.ini` sqlalchemy.url (fallback)
 
 ### When Using the External App in a Core Project
 
diff --git a/fastappkit/cli/templates/app/external/alembic.ini.j2 b/fastappkit/cli/templates/app/external/alembic.ini.j2
index dd95c38..e444566 100644
--- a/fastappkit/cli/templates/app/external/alembic.ini.j2
+++ b/fastappkit/cli/templates/app/external/alembic.ini.j2
@@ -59,9 +59,18 @@ version_path_separator = os  # Use os.pathsep. Default configuration used for ne
 # are written from script.py.mako
 # output_encoding = utf-8
 
-# Database URL - can be overridden via DATABASE_URL environment variable
+# Database URL configuration
+#
+# This can be configured in three ways (in order of precedence):
+# 1. DATABASE_URL environment variable (from .env file when running independently)
+# 2. This sqlalchemy.url setting (fallback)
+# 3. Set programmatically in migrations/env.py
+#
+# For independent development, create a .env file with:
+#   DATABASE_URL=sqlite:///./{{ app_name }}.db
+#
+# The migrations/env.py will automatically read DATABASE_URL from the environment.
 # Default uses SQLite for development
-# Edit this line or set DATABASE_URL environment variable
 sqlalchemy.url = sqlite:///./{{ app_name }}.db
 
 
diff --git a/fastappkit/cli/templates/app/external/config.py.j2 b/fastappkit/cli/templates/app/external/config.py.j2
new file mode 100644
index 0000000..e7c0302
--- /dev/null
+++ b/fastappkit/cli/templates/app/external/config.py.j2
@@ -0,0 +1,31 @@
+"""
+Settings configuration for {{ app_name }}.
+
+Uses pydantic-settings to load from .env file.
+"""
+
+from pydantic import Field
+from pydantic_settings import BaseSettings, SettingsConfigDict
+
+
+class Settings(BaseSettings):
+    """
+    Application settings.
+
+    Loads from .env file automatically.
+    """
+
+    database_url: str = Field(
+        default="sqlite:///./{{ app_name }}.db",
+        alias="DATABASE_URL"
+    )
+    debug: bool = Field(
+        default=False,
+        alias="DEBUG"
+    )
+
+    model_config = SettingsConfigDict(
+        env_file=".env",
+        env_file_encoding="utf-8",
+        populate_by_name=True
+    )
diff --git a/fastappkit/cli/templates/app/external/env.example.j2 b/fastappkit/cli/templates/app/external/env.example.j2
new file mode 100644
index 0000000..aef7687
--- /dev/null
+++ b/fastappkit/cli/templates/app/external/env.example.j2
@@ -0,0 +1,5 @@
+# Database Configuration
+DATABASE_URL=sqlite:///./{{ app_name }}.db
+
+# Development Settings
+DEBUG=false
diff --git a/fastappkit/cli/templates/app/external/main.py.j2 b/fastappkit/cli/templates/app/external/main.py.j2
new file mode 100644
index 0000000..065eded
--- /dev/null
+++ b/fastappkit/cli/templates/app/external/main.py.j2
@@ -0,0 +1,44 @@
+"""
+Main entry point for {{ app_name }}.
+
+Run with: uvicorn main:app --reload
+
+This allows you to develop and test the external app independently
+without requiring a full fastappkit project.
+"""
+
+import sys
+from pathlib import Path
+
+# Add current directory to sys.path so we can import the package
+# This allows running without 'pip install -e .' (though that's recommended)
+_current_dir = Path(__file__).parent
+if str(_current_dir) not in sys.path:
+    sys.path.insert(0, str(_current_dir))
+
+from fastapi import FastAPI
+
+from {{ app_name }}.config import Settings
+from {{ app_name }} import register
+
+# Load settings from .env
+settings = Settings()
+
+# Create FastAPI app
+app = FastAPI(
+    title="{{ app_name }}",
+    description="External pluggable app for fastappkit",
+    debug=settings.debug,
+)
+
+# Register this app's router
+router = register(app)
+if router is not None:
+    # If register() returns a router, mount it with default prefix
+    app.include_router(router, prefix="/{{ app_name }}", tags=["{{ app_name }}"])
+
+
+if __name__ == "__main__":
+    import uvicorn
+
+    uvicorn.run(app, host="127.0.0.1", port=8000, reload=True)
diff --git a/fastappkit/cli/templates/app/external/migrations/env.py.j2 b/fastappkit/cli/templates/app/external/migrations/env.py.j2
index 0413a46..727ef6b 100644
--- a/fastappkit/cli/templates/app/external/migrations/env.py.j2
+++ b/fastappkit/cli/templates/app/external/migrations/env.py.j2
@@ -31,12 +31,17 @@ target_metadata = Base.metadata
 
 config = context.config
 
-# Get database URL from config (set by fastappkit when running from core project)
-# or from environment variable (when running Alembic directly from external app)
-# or from alembic.ini (fallback for direct Alembic usage)
+# Get database URL with the following precedence order:
+# 1. Config (set by fastappkit when running from core project)
+# 2. DATABASE_URL environment variable (from .env file when running independently)
+# 3. alembic.ini sqlalchemy.url (fallback)
+#
+# This allows the external app to work both:
+# - When used in a core project (fastappkit sets it via config)
+# - When developed independently (reads from .env file)
 database_url = config.get_main_option("sqlalchemy.url")
 if not database_url:
-    # If not set in config, try environment variable
+    # If not set in config, try environment variable (from .env)
     import os
     database_url = os.getenv("DATABASE_URL")
     if database_url:
diff --git a/fastappkit/cli/templates/app/external/pyproject.toml.j2 b/fastappkit/cli/templates/app/external/pyproject.toml.j2
index 7a74a80..0519818 100644
--- a/fastappkit/cli/templates/app/external/pyproject.toml.j2
+++ b/fastappkit/cli/templates/app/external/pyproject.toml.j2
@@ -14,10 +14,12 @@ license = "MIT"
 packages = [{include = "{{ app_name }}"}]
 
 [tool.poetry.dependencies]
-python = "^3.11"
+python = ">=3.11,<4.0"
 fastapi = "*"
 sqlalchemy = "*"
 alembic = "*"
+pydantic-settings = "*"
+uvicorn = {extras = ["standard"], version = "*"}
 
 # Note: FastAppKit metadata is in {{ app_name }}/fastappkit.toml
 # This file is included in the package when published to PyPI
diff --git a/fastappkit/cli/templates/project/pyproject.toml.j2 b/fastappkit/cli/templates/project/pyproject.toml.j2
index 1ca00dc..de5cdad 100644
--- a/fastappkit/cli/templates/project/pyproject.toml.j2
+++ b/fastappkit/cli/templates/project/pyproject.toml.j2
@@ -7,7 +7,7 @@ readme = "README.md"
 license = "MIT"
 
 [tool.poetry.dependencies]
-python = "^3.11"
+python = ">=3.11,<4.0"
 fastapi = "*"
 fastappkit = "*"
 {% if use_poetry %}uvicorn = {extras = ["standard"], version = "*"}{% endif %}
diff --git a/poetry.lock b/poetry.lock
index fbc5957..fcd2265 100644
--- a/poetry.lock
+++ b/poetry.lock
@@ -1876,5 +1876,5 @@ files = [
 
 [metadata]
 lock-version = "2.1"
-python-versions = "^3.11.6"
-content-hash = "45fc26d0962e7b4ce838d4e1425eff68e07bc8bb24bbef5f7e6238bcf4c78925"
+python-versions = ">=3.11,<4.0"
+content-hash = "4cbcebe5a48f8238a237b33a8e0abeb477fd2fc15d6ce38a9b8aa885a2374106"
diff --git a/pyproject.toml b/pyproject.toml
index d2df39f..095b2d4 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -27,7 +27,7 @@ include = [
 ]
 
 [tool.poetry.dependencies]
-python = "^3.11.6"
+python = ">=3.11,<4.0"
 fastapi = ">=0.120.0,<0.130"
 sqlalchemy = ">=2.0,<3.0"
 alembic = ">=1.17.2,<1.18"