diff --git a/.env.example b/.env.example
index 8f1898d6a4..0938a650d8 100644
--- a/.env.example
+++ b/.env.example
@@ -63,10 +63,18 @@ DATABASE_URL='postgresql://postgres:postgres@localhost:5432/formbricks?schema=pu
 # Set explicitly to avoid confusion; override as needed when using docker-compose.dev.yml.
 HUB_API_KEY=dev-api-key
 HUB_API_URL=http://localhost:8080
-HUB_DATABASE_URL=postgresql://postgres:postgres@postgres:5432/postgres?sslmode=disable
+HUB_DATABASE_URL=postgresql://postgres:postgres@postgres:5432/hub?sslmode=disable
 # Hub image tag used by docker-compose.dev.yml (hub + hub-migrate). Leave unset to use the
 # pinned default in the compose file; override here when testing a specific Hub release.
-# HUB_IMAGE_TAG=0.2.0
+# HUB_IMAGE_TAG=0.3.0
+
+# Hub embeddings are optional. Set a provider and model to enable semantic search embeddings in
+# the Hub API and hub-worker. For provider-specific settings, see:
+# https://hub.formbricks.com/reference/environment-variables/#embeddings
+# Example with Google AI Studio:
+# EMBEDDING_PROVIDER=google
+# EMBEDDING_MODEL=gemini-embedding-001
+# EMBEDDING_PROVIDER_API_KEY=
 
 ###########################
 #  CUBE ANALYTICS (XM V5) #
diff --git a/charts/formbricks/README.md b/charts/formbricks/README.md
index 92177fc161..03857b23d3 100644
--- a/charts/formbricks/README.md
+++ b/charts/formbricks/README.md
@@ -214,7 +214,7 @@ Autoscaling is opt-in for Hub API, Hub worker, and the embeddings runtime. If yo
 | hub.image.digest                                                   | string | `"sha256:14db7b3d285b6e9165b55693f9b83d08beff840a255fd77dd12882ee0a62f5cb"` | When set, takes precedence over tag (immutable pin). |
 | hub.image.pullPolicy                                               | string | `"IfNotPresent"`                  |             |
 | hub.image.repository                                               | string | `"ghcr.io/formbricks/hub"`        |             |
-| hub.image.tag                                                      | string | `"0.2.0"`                         | Fallback when digest is empty. |
+| hub.image.tag                                                      | string | `"0.3.0"`                         | Fallback when digest is empty. |
 | hub.migration.activeDeadlineSeconds                                | int    | `900`                             |             |
 | hub.migration.backoffLimit                                         | int    | `3`                               |             |
 | hub.migration.ttlSecondsAfterFinished                              | int    | `300`                             |             |
diff --git a/docker-compose.dev.yml b/docker-compose.dev.yml
index 3f89cfeeef..c90d40ba7d 100644
--- a/docker-compose.dev.yml
+++ b/docker-compose.dev.yml
@@ -77,6 +77,21 @@ services:
       - /bin/sh
       - /usr/local/bin/rustfs-init.sh
 
+  # Create Hub's dedicated dev database before migrations run. Idempotent; runs on every compose up.
+  hub-db-create:
+    image: pgvector/pgvector:pg18
+    restart: "no"
+    entrypoint: ["sh", "-c"]
+    command:
+      [
+        'if [ "$$(psql "$$POSTGRES_DATABASE_URL" -tAc "SELECT 1 FROM pg_database WHERE datname = ''hub''")" != "1" ]; then psql "$$POSTGRES_DATABASE_URL" -v ON_ERROR_STOP=1 -c "CREATE DATABASE hub"; fi',
+      ]
+    environment:
+      POSTGRES_DATABASE_URL: postgresql://postgres:postgres@postgres:5432/postgres?sslmode=disable
+    depends_on:
+      postgres:
+        condition: service_healthy
+
   # Run Hub DB migrations (goose + river) before the API starts. Idempotent; runs on every compose up.
   # Hub image pinned via HUB_IMAGE_TAG so docker does not silently reuse a stale :latest cache.
   # Keep hub, hub-migrate, and any future hub-worker on the same tag — they share one image and
@@ -90,12 +105,12 @@ services:
         'if [ -x /usr/local/bin/goose ] && [ -x /usr/local/bin/river ]; then /usr/local/bin/goose -dir /app/migrations postgres "$$DATABASE_URL" up && /usr/local/bin/river migrate-up --database-url "$$DATABASE_URL"; else echo ''Migration tools (goose/river) not in image.''; exit 1; fi',
       ]
     environment:
-      DATABASE_URL: postgresql://postgres:postgres@postgres:5432/postgres?sslmode=disable
+      DATABASE_URL: ${HUB_DATABASE_URL:-postgresql://postgres:postgres@postgres:5432/hub?sslmode=disable}
     depends_on:
-      postgres:
-        condition: service_healthy
+      hub-db-create:
+        condition: service_completed_successfully
 
-  # Formbricks Hub API (ghcr.io/formbricks/hub). Shares the same Postgres database as Formbricks by default.
+  # Formbricks Hub API (ghcr.io/formbricks/hub). Uses a dedicated local Hub database by default.
   hub:
     image: ghcr.io/formbricks/hub:${HUB_IMAGE_TAG:-0.3.0}
     depends_on:
@@ -103,16 +118,41 @@ services:
         condition: service_completed_successfully
     ports:
       - "8080:8080"
-    environment:
+    environment: &hub-runtime-environment
       API_KEY: ${HUB_API_KEY:-dev-api-key}
-      DATABASE_URL: postgresql://postgres:postgres@postgres:5432/postgres?sslmode=disable
+      DATABASE_URL: ${HUB_DATABASE_URL:-postgresql://postgres:postgres@postgres:5432/hub?sslmode=disable}
       # Explicit Postgres env so migrations and any libpq fallback use the service host, not localhost
       PGHOST: postgres
       PGPORT: "5432"
       PGUSER: postgres
       PGPASSWORD: postgres
-      PGDATABASE: postgres
+      PGDATABASE: hub
       PGSSLMODE: disable
+      # Hub embeddings are disabled unless EMBEDDING_PROVIDER and EMBEDDING_MODEL are set.
+      EMBEDDING_PROVIDER: ${EMBEDDING_PROVIDER:-}
+      EMBEDDING_MODEL: ${EMBEDDING_MODEL:-}
+      EMBEDDING_PROVIDER_API_KEY: ${EMBEDDING_PROVIDER_API_KEY:-}
+      EMBEDDING_BASE_URL: ${EMBEDDING_BASE_URL:-}
+      EMBEDDING_MAX_CONCURRENT: ${EMBEDDING_MAX_CONCURRENT:-5}
+      EMBEDDING_MAX_ATTEMPTS: ${EMBEDDING_MAX_ATTEMPTS:-3}
+      EMBEDDING_NORMALIZE: ${EMBEDDING_NORMALIZE:-false}
+      EMBEDDING_GOOGLE_CLOUD_PROJECT: ${EMBEDDING_GOOGLE_CLOUD_PROJECT:-}
+      EMBEDDING_GOOGLE_CLOUD_LOCATION: ${EMBEDDING_GOOGLE_CLOUD_LOCATION:-}
+      GOOGLE_APPLICATION_CREDENTIALS: ${GOOGLE_APPLICATION_CREDENTIALS:-}
+
+  # Hub worker processes async jobs enqueued by the API, including embeddings.
+  hub-worker:
+    image: ghcr.io/formbricks/hub:${HUB_IMAGE_TAG:-0.3.0}
+    depends_on:
+      hub-migrate:
+        condition: service_completed_successfully
+      postgres:
+        condition: service_healthy
+    entrypoint: ["/app/hub-worker"]
+    healthcheck:
+      disable: true
+    environment:
+      <<: *hub-runtime-environment
 
   cube:
     profiles: ["xm"]
diff --git a/docker/README.md b/docker/README.md
index 6868d67227..15c36e5e81 100644
--- a/docker/README.md
+++ b/docker/README.md
@@ -33,8 +33,8 @@ That's it! After running the command and providing the required information, vis
 The stack includes the [Formbricks Hub](https://github.com/formbricks/hub) API (`ghcr.io/formbricks/hub`) and can also run a bundled Cube.js service for XM Suite v5 analytics. Hub and Cube share the same database as Formbricks by default, and Cube is enabled through the optional Docker Compose `xm` profile.
 
 - **Migrations**: A `hub-migrate` service runs Hub's database migrations (goose + river) before the Hub API starts. It runs on every `docker compose up` and is idempotent.
-- **Production** (`docker/docker-compose.yml`): Set `HUB_API_KEY` (required). `HUB_API_URL` defaults to `http://hub:8080` so the Formbricks app can reach Hub inside the compose network. To enable XM Suite v5 analytics, set `COMPOSE_PROFILES=xm` and `CUBEJS_API_SECRET`; `CUBEJS_API_URL` defaults to `http://cube:4000`. Cube JWT issuer/audience default to `formbricks-web` and `formbricks-cube`, and the bundled Cube service exposes only `meta,data` API scopes. Override `HUB_DATABASE_URL` and `CUBEJS_DB_*` only if Hub or Cube should use a separate database. The Hub image tracks `:latest` by default so `formbricks.sh update` advances Hub in lockstep with the app. `hub` and `hub-migrate` always resolve to the same image. To pin to an immutable reference, set `HUB_IMAGE_REF` in `docker/.env` to either a tag (e.g. `:0.2.0`) or a digest (e.g. `@sha256:14db7b3d...`).
-- **Development** (`docker-compose.dev.yml`): Hub uses the same local Postgres database and `HUB_API_KEY` defaults to `dev-api-key`. Cube is behind the `xm` profile, `CUBEJS_API_URL` defaults to `http://localhost:4000`, and `pnpm dev:setup` generates `CUBEJS_API_SECRET` in the repo root `.env`. The Hub image is pinned to a semver tag (`hub` and `hub-migrate` share the same value); override `HUB_IMAGE_TAG` in the repo root `.env` to test a specific Hub release.
+- **Production** (`docker/docker-compose.yml`): Set `HUB_API_KEY` (required). `HUB_API_URL` defaults to `http://hub:8080` so the Formbricks app can reach Hub inside the compose network. To enable XM Suite v5 analytics, set `COMPOSE_PROFILES=xm` and `CUBEJS_API_SECRET`; `CUBEJS_API_URL` defaults to `http://cube:4000`. Cube JWT issuer/audience default to `formbricks-web` and `formbricks-cube`, and the bundled Cube service exposes only `meta,data` API scopes. Override `HUB_DATABASE_URL` and `CUBEJS_DB_*` only if Hub or Cube should use a separate database. The Hub image tracks `:latest` by default so `formbricks.sh update` advances Hub in lockstep with the app. `hub` and `hub-migrate` always resolve to the same image. To pin to an immutable reference, set `HUB_IMAGE_REF` in `docker/.env` to either a tag (e.g. `:0.3.0`) or a digest (e.g. `@sha256:14db7b3d...`).
+- **Development** (`docker-compose.dev.yml`): Hub uses a dedicated local `hub` database and `HUB_API_KEY` defaults to `dev-api-key`. The dev stack starts `hub` plus `hub-worker`; set `EMBEDDING_PROVIDER`, `EMBEDDING_MODEL`, and any provider credentials in the repo root `.env` to enable Hub embeddings locally. See the [Hub embeddings environment reference](https://hub.formbricks.com/reference/environment-variables/#embeddings) for provider-specific values. Cube is behind the `xm` profile, `CUBEJS_API_URL` defaults to `http://localhost:4000`, and `pnpm dev:setup` generates `CUBEJS_API_SECRET` in the repo root `.env`. The Hub image is pinned to a semver tag (`hub`, `hub-worker`, and `hub-migrate` share the same value); override `HUB_IMAGE_TAG` in the repo root `.env` to test a specific Hub release.
 
 In development, Hub is exposed locally on port **8080**. When the `xm` profile is enabled, Cube is exposed on **4000** (with the Cube playground on **4001**). In production Docker Compose, Hub stays internal to the compose network at `http://hub:8080`; Cube also stays internal at `http://cube:4000` when enabled.