diff --git a/libs/python/agent/agent/ui/gradio/app.py b/libs/python/agent/agent/ui/gradio/app.py
index 13c0786f..be04d931 100644
--- a/libs/python/agent/agent/ui/gradio/app.py
+++ b/libs/python/agent/agent/ui/gradio/app.py
@@ -178,13 +178,20 @@ def create_computer_instance(
     """Create or get the global Computer instance."""
     global global_computer
     if global_computer is None:
-        global_computer = Computer(
-            verbosity=verbosity,
-            os_type=os_type,
-            provider_type=provider_type,
-            name=name if name else "",
-            api_key=api_key
-        )
+        if provider_type == "localhost":
+            global_computer = Computer(
+                verbosity=verbosity,
+                os_type=os_type,
+                use_host_computer_server=True
+            )
+        else:
+            global_computer = Computer(
+                verbosity=verbosity,
+                os_type=os_type,
+                provider_type=provider_type,
+                name=name if name else "",
+                api_key=api_key
+            )
     return global_computer
 
 
diff --git a/libs/python/agent/agent/ui/gradio/ui_components.py b/libs/python/agent/agent/ui/gradio/ui_components.py
index dfcceb4e..c601fb6c 100644
--- a/libs/python/agent/agent/ui/gradio/ui_components.py
+++ b/libs/python/agent/agent/ui/gradio/ui_components.py
@@ -211,7 +211,7 @@ if __name__ == "__main__":
                     is_windows = platform.system().lower() == "windows"
                     is_mac = platform.system().lower() == "darwin"
                     
-                    providers = ["cloud"]
+                    providers = ["cloud", "localhost"]
                     if is_mac:
                         providers += ["lume"]
                     if is_windows:
@@ -403,6 +403,23 @@ if __name__ == "__main__":
                         type="password",
                     )
                     
+                    # Provider visibility update function
+                    def update_provider_visibility(provider):
+                        """Update visibility of container name and API key based on selected provider."""
+                        is_localhost = provider == "localhost"
+                        return [
+                            gr.update(visible=not is_localhost),  # container_name
+                            gr.update(visible=not is_localhost and not has_cua_key)  # cua_cloud_api_key
+                        ]
+                    
+                    # Connect provider change event
+                    computer_provider.change(
+                        fn=update_provider_visibility,
+                        inputs=[computer_provider],
+                        outputs=[container_name, cua_cloud_api_key],
+                        queue=False
+                    )
+                    
                     # Connect UI update events
                     for dropdown in [agent_loop, omni_model_choice, uitars_model_choice, openai_model_choice, anthropic_model_choice]:
                         dropdown.change(
diff --git a/libs/python/agent/pyproject.toml b/libs/python/agent/pyproject.toml
index be10f729..1280999b 100644
--- a/libs/python/agent/pyproject.toml
+++ b/libs/python/agent/pyproject.toml
@@ -19,7 +19,7 @@ dependencies = [
     "pydantic>=2.6.4",
     "rich>=13.7.1",
     "python-dotenv>=1.0.1",
-    "cua-computer>=0.3.0,<0.5.0",
+    "cua-computer>=0.4.0,<0.5.0",
     "cua-core>=0.1.8,<0.2.0",
     "certifi>=2024.2.2",
     "litellm>=1.74.8"
diff --git a/libs/python/computer/pyproject.toml b/libs/python/computer/pyproject.toml
index 2e564fa9..4a9b41bb 100644
--- a/libs/python/computer/pyproject.toml
+++ b/libs/python/computer/pyproject.toml
@@ -4,7 +4,7 @@ build-backend = "pdm.backend"
 
 [project]
 name = "cua-computer"
-version = "0.3.0"
+version = "0.4.0"
 description = "Computer-Use Interface (CUI) framework powering Cua"
 readme = "README.md"
 authors = [