diff --git a/docker/docker-compose.middleware.yaml b/docker/docker-compose.middleware.yaml
index ab81fe779e..cc628ccdf5 100644
--- a/docker/docker-compose.middleware.yaml
+++ b/docker/docker-compose.middleware.yaml
@@ -140,11 +140,8 @@ services:
     restart: always
     volumes:
       - ./ssrf_proxy/squid.conf.template:/etc/squid/squid.conf.template
+      - ./ssrf_proxy/squid.conf.dev.template:/etc/squid/squid.conf.dev.template
       - ./ssrf_proxy/docker-entrypoint.sh:/docker-entrypoint-mount.sh
-      # DEVELOPMENT MODE: Mount dev configs that disable all SSRF protections
-      # WARNING: This configuration allows access to private networks!
-      # Only use this in development environments, never in production!
-      - ./ssrf_proxy/conf.d.dev:/etc/squid/conf.d:ro
     entrypoint: [ "sh", "-c", "cp /docker-entrypoint-mount.sh /docker-entrypoint.sh && sed -i 's/\r$$//' /docker-entrypoint.sh && chmod +x /docker-entrypoint.sh && /docker-entrypoint.sh" ]
     env_file:
       - ./middleware.env
diff --git a/docker/middleware.env.example b/docker/middleware.env.example
index 2eba62f594..36debb626c 100644
--- a/docker/middleware.env.example
+++ b/docker/middleware.env.example
@@ -64,6 +64,10 @@ SSRF_HTTP_PORT=3128
 SSRF_COREDUMP_DIR=/var/spool/squid
 SSRF_REVERSE_PROXY_PORT=8194
 SSRF_SANDBOX_HOST=sandbox
+# Development mode switch - set to true to disable all SSRF protections
+# WARNING: This allows access to localhost, private networks, and all ports!
+# Only use this in development environments, NEVER in production!
+SSRF_PROXY_DEV_MODE=false
 
 # ------------------------------
 # Environment Variables for weaviate Service
diff --git a/docker/ssrf_proxy/README.md b/docker/ssrf_proxy/README.md
index d1f3bb3894..2ab71bbc08 100644
--- a/docker/ssrf_proxy/README.md
+++ b/docker/ssrf_proxy/README.md
@@ -105,30 +105,46 @@ Development mode provides a zero-configuration environment that:
 
 ### Using Development Mode
 
-#### Option 1: Docker Compose Override (Recommended)
+#### Option 1: Environment Variable (Recommended)
 
-From the main Dify repository root:
+Simply set the `SSRF_PROXY_DEV_MODE` environment variable to `true`:
 
 ```bash
-# Use the development overlay with your existing docker-compose
-docker-compose -f docker-compose.middleware.yaml -f docker/ssrf_proxy/docker-compose.dev.yaml up ssrf_proxy
+# In your .env or middleware.env file
+SSRF_PROXY_DEV_MODE=true
+
+# Then start normally
+docker-compose -f docker-compose.middleware.yaml up ssrf_proxy
 ```
 
-#### Option 2: Manual Configuration
+Or set it directly in docker-compose:
 
-Mount the development configuration manually:
+```yaml
+services:
+  ssrf_proxy:
+    environment:
+      SSRF_PROXY_DEV_MODE: true
+```
 
+**Important Note about Docker Networking:**
+
+When accessing services on your host machine from within Docker containers:
+- Do NOT use `127.0.0.1` or `localhost` (these refer to the container itself)
+- Instead use:
+  - `host.docker.internal:port` (recommended, works on Mac/Windows/Linux with Docker 20.10+)
+  - Your host machine's actual IP address
+  - On Linux: the Docker bridge gateway (usually `172.17.0.1`)
+
+Example:
 ```bash
-docker run -d \
-  --name ssrf-proxy-dev \
-  -p 3128:3128 \
-  -v ./docker/ssrf_proxy/squid.conf.template:/etc/squid/squid.conf.template:ro \
-  -v ./docker/ssrf_proxy/docker-entrypoint.sh:/docker-entrypoint.sh:ro \
-  -v ./docker/ssrf_proxy/conf.d.dev:/etc/squid/conf.d:ro \
-  ubuntu/squid:latest
+# Wrong (won't work from inside container):
+http://127.0.0.1:1234
+
+# Correct (will work):
+http://host.docker.internal:1234
 ```
 
-The development mode configuration is in `conf.d.dev/00-development-mode.conf`.
+The development mode uses `squid.conf.dev.template` which allows all connections.
 
 ## Testing
 
diff --git a/docker/ssrf_proxy/conf.d.dev/00-development-mode.conf b/docker/ssrf_proxy/conf.d.dev/00-development-mode.conf
deleted file mode 100644
index 4d03e34e3d..0000000000
--- a/docker/ssrf_proxy/conf.d.dev/00-development-mode.conf
+++ /dev/null
@@ -1,22 +0,0 @@
-################################## DEVELOPMENT MODE CONFIGURATION ##################################
-# WARNING: This configuration DISABLES all SSRF protections!
-# Only use this in development environments. NEVER use in production!
-
-# Override all previous access rules and allow everything
-# This must be placed early in the configuration to take precedence
-
-# Allow all ports (not just 80/443)
-acl Dev_All_Ports port 1-65535
-
-# Allow all connections including private networks
-# This effectively bypasses all SSRF protections
-http_access allow all
-
-# Additional development conveniences
-# Allow cache manager access from any source (useful for debugging)
-http_access allow manager
-
-# Log everything for debugging
-debug_options ALL,1
-
-# Note: Since we're allowing all, the deny rules in the main config won't be reached
diff --git a/docker/ssrf_proxy/docker-compose.dev.yaml b/docker/ssrf_proxy/docker-compose.dev.yaml
deleted file mode 100644
index a6371a0e71..0000000000
--- a/docker/ssrf_proxy/docker-compose.dev.yaml
+++ /dev/null
@@ -1,21 +0,0 @@
-# Development Mode Docker Compose Override
-# WARNING: This configuration DISABLES all SSRF protections!
-# Only use this in development environments, never in production!
-#
-# Usage (from main Dify repository):
-#   docker-compose -f docker-compose.middleware.yaml -f docker/ssrf_proxy/docker-compose.dev.yaml up
-#
-# This overlay modifies the ssrf_proxy service to mount development configurations
-# that allow ALL requests including private networks and cloud metadata.
-
-version: '3.8'
-
-services:
-  ssrf_proxy:
-    volumes:
-      # Override the conf.d mount to use development configuration
-      - ./docker/ssrf_proxy/conf.d.dev:/etc/squid/conf.d:ro
-    environment:
-      # Optional: Add any development-specific environment variables
-      SQUID_DEV_MODE: "true"
-    container_name: dify-ssrf-proxy-dev
diff --git a/docker/ssrf_proxy/docker-entrypoint.sh b/docker/ssrf_proxy/docker-entrypoint.sh
index 613897bb7d..8be4eecb57 100755
--- a/docker/ssrf_proxy/docker-entrypoint.sh
+++ b/docker/ssrf_proxy/docker-entrypoint.sh
@@ -26,8 +26,26 @@ tail -F /var/log/squid/error.log 2>/dev/null &
 tail -F /var/log/squid/store.log 2>/dev/null &
 tail -F /var/log/squid/cache.log 2>/dev/null &
 
+# Select the appropriate template based on DEV_MODE
+echo "[ENTRYPOINT] SSRF_PROXY_DEV_MODE is set to: '${SSRF_PROXY_DEV_MODE}'"
+if [ "${SSRF_PROXY_DEV_MODE}" = "true" ] || [ "${SSRF_PROXY_DEV_MODE}" = "True" ] || [ "${SSRF_PROXY_DEV_MODE}" = "TRUE" ] || [ "${SSRF_PROXY_DEV_MODE}" = "1" ]; then
+    echo "[ENTRYPOINT] WARNING: Development mode is ENABLED! All SSRF protections are DISABLED!"
+    echo "[ENTRYPOINT] This allows access to localhost, private networks, and all ports."
+    echo "[ENTRYPOINT] DO NOT USE IN PRODUCTION!"
+    TEMPLATE_FILE="/etc/squid/squid.conf.dev.template"
+else
+    echo "[ENTRYPOINT] Using production configuration with SSRF protections enabled"
+    TEMPLATE_FILE="/etc/squid/squid.conf.template"
+fi
+
+# Check if the selected template exists
+if [ ! -f "$TEMPLATE_FILE" ]; then
+    echo "[ENTRYPOINT] ERROR: Template file $TEMPLATE_FILE not found"
+    exit 1
+fi
+
 # Replace environment variables in the template and output to the squid.conf
-echo "[ENTRYPOINT] replacing environment variables in the template"
+echo "[ENTRYPOINT] replacing environment variables in the template: $TEMPLATE_FILE"
 awk '{
     while(match($0, /\${[A-Za-z_][A-Za-z_0-9]*}/)) {
         var = substr($0, RSTART+2, RLENGTH-3)
@@ -35,7 +53,24 @@ awk '{
         $0 = substr($0, 1, RSTART-1) val substr($0, RSTART+RLENGTH)
     }
     print
-}' /etc/squid/squid.conf.template > /etc/squid/squid.conf
+}' "$TEMPLATE_FILE" > /etc/squid/squid.conf
+
+# Log first few lines of generated config for debugging
+echo "[ENTRYPOINT] First 30 lines of generated squid.conf:"
+head -n 30 /etc/squid/squid.conf
+
+# Create an empty conf.d directory if it doesn't exist
+if [ ! -d /etc/squid/conf.d ]; then
+    echo "[ENTRYPOINT] creating /etc/squid/conf.d directory"
+    mkdir -p /etc/squid/conf.d
+fi
+
+# If conf.d directory is empty, create a placeholder file to prevent include errors
+# Only needed for production template which has the include directive
+if [ "${SSRF_PROXY_DEV_MODE}" != "true" ] && [ -z "$(ls -A /etc/squid/conf.d/*.conf 2>/dev/null)" ]; then
+    echo "[ENTRYPOINT] conf.d directory is empty, creating placeholder"
+    echo "# Placeholder file to prevent include errors" > /etc/squid/conf.d/placeholder.conf
+fi
 
 /usr/sbin/squid -Nz
 echo "[ENTRYPOINT] starting squid"
diff --git a/docker/ssrf_proxy/squid.conf.dev.template b/docker/ssrf_proxy/squid.conf.dev.template
index 5369fc8124..6ba2f4b3c2 100644
--- a/docker/ssrf_proxy/squid.conf.dev.template
+++ b/docker/ssrf_proxy/squid.conf.dev.template
@@ -1,47 +1,10 @@
 ################################## DEVELOPMENT MODE CONFIGURATION ##################################
 # WARNING: This configuration DISABLES all SSRF protections!
 # Only use this in development environments. NEVER use in production!
-#
-# This is a special configuration for development that allows ALL requests
-# including private networks, cloud metadata endpoints, and any ports.
 
-################################## Allow Everything ##################################
-# In development mode, we allow all connections without restrictions
-
-# Define ACLs but don't use them for blocking
-acl private_networks dst 0.0.0.0/8
-acl private_networks dst 10.0.0.0/8
-acl private_networks dst 127.0.0.0/8
-acl private_networks dst 169.254.0.0/16
-acl private_networks dst 172.16.0.0/12
-acl private_networks dst 192.168.0.0/16
-acl localhost src 127.0.0.1/32 ::1
-acl SSL_ports port 443
-acl Safe_ports port 1-65535  # Allow ALL ports in dev mode
-acl CONNECT method CONNECT
-
-################################## Access Control Rules ##################################
-# DEVELOPMENT MODE: Allow everything!
-
-# Special rule for reverse proxy port (sandbox access)
-acl reverse_proxy_port myport ${REVERSE_PROXY_PORT}
-http_access allow reverse_proxy_port
-
-# Explicitly allow link-local addresses (169.254.0.0/16)
-acl link_local dst 169.254.0.0/16
-http_access allow link_local
-
-# Explicitly allow localhost and loopback
-http_access allow localhost
-
-# Explicitly allow all private networks
-http_access allow private_networks
-
-# ALLOW ALL REQUESTS - Development mode bypasses all security
+# Allow all requests - put this FIRST before any other rules
 http_access allow all
 
-# Note: No deny rules in development mode
-
 ################################## Proxy Server Configuration ##################################
 http_port ${HTTP_PORT}
 coredump_dir ${COREDUMP_DIR}
@@ -64,4 +27,4 @@ cache_peer ${SANDBOX_HOST} parent ${SANDBOX_PORT} 0 no-query originserver
 client_request_buffer_max_size 100 MB
 
 # Debug logging for development
-debug_options ALL,1
+debug_options ALL,1
\ No newline at end of file
diff --git a/docker/ssrf_proxy/squid.conf.template b/docker/ssrf_proxy/squid.conf.template
index 8847657e3a..ec5edb5859 100644
--- a/docker/ssrf_proxy/squid.conf.template
+++ b/docker/ssrf_proxy/squid.conf.template
@@ -61,6 +61,7 @@ http_access deny manager
 # User overrides in /etc/squid/conf.d/*.conf should be placed here
 # These can be used to add additional restrictions or allowances
 # Note: debian.conf may be present by default in the ubuntu/squid image
+# The include directive uses a script to handle optional includes
 include /etc/squid/conf.d/*.conf
 
 # Allow all other requests (public internet resources)