diff --git a/apps/api/src/persistence/PersistenceModeVerification.test.ts b/apps/api/src/persistence/PersistenceModeVerification.test.ts
new file mode 100644
index 000000000..a43245dbf
--- /dev/null
+++ b/apps/api/src/persistence/PersistenceModeVerification.test.ts
@@ -0,0 +1,144 @@
+import { describe, it, expect, beforeEach, afterEach } from 'vitest';
+
+/**
+ * Unit test to verify persistence mode configuration
+ * This test ensures that the correct persistence modules are loaded
+ * based on the GRIDPILOT_API_PERSISTENCE environment variable
+ */
+describe('Persistence Mode Verification', () => {
+  const originalEnv = { ...process.env };
+
+  beforeEach(() => {
+    // Reset modules before each test
+    vi.resetModules();
+  });
+
+  afterEach(() => {
+    // Restore original environment
+    process.env = { ...originalEnv };
+  });
+
+  it('should load postgres persistence when GRIDPILOT_API_PERSISTENCE=postgres', async () => {
+    process.env.GRIDPILOT_API_PERSISTENCE = 'postgres';
+    process.env.DATABASE_URL = 'postgres://user:pass@localhost:5432/test';
+
+    const { getApiPersistence } = await import('../env');
+    const persistence = getApiPersistence();
+    
+    expect(persistence).toBe('postgres');
+  });
+
+  it('should load inmemory persistence when GRIDPILOT_API_PERSISTENCE=inmemory', async () => {
+    process.env.GRIDPILOT_API_PERSISTENCE = 'inmemory';
+    delete process.env.DATABASE_URL;
+
+    const { getApiPersistence } = await import('../env');
+    const persistence = getApiPersistence();
+    
+    expect(persistence).toBe('inmemory');
+  });
+
+  it('should default to inmemory in test environment without DATABASE_URL', async () => {
+    process.env.NODE_ENV = 'test';
+    delete process.env.GRIDPILOT_API_PERSISTENCE;
+    delete process.env.DATABASE_URL;
+
+    const { getApiPersistence } = await import('../env');
+    const persistence = getApiPersistence();
+    
+    expect(persistence).toBe('inmemory');
+  });
+
+  it('should verify all persistence modules have both inmemory and postgres alternatives', async () => {
+    const fs = require('fs');
+    const path = require('path');
+
+    // Dynamically discover all persistence modules by scanning directories
+    const inMemoryDir = path.join(__dirname, 'inmemory');
+    const postgresDir = path.join(__dirname, 'postgres');
+
+    // Get all module files from inmemory directory
+    const inMemoryModules = fs.readdirSync(inMemoryDir)
+      .filter((file: string) => file.endsWith('PersistenceModule.ts'))
+      .map((file: string) => file.replace('.ts', ''));
+
+    // Get all module files from postgres directory
+    const postgresModules = fs.readdirSync(postgresDir)
+      .filter((file: string) => file.endsWith('PersistenceModule.ts'))
+      .map((file: string) => file.replace('.ts', ''));
+
+    // Verify we have the same number of modules in both directories
+    expect(inMemoryModules.length).toBe(postgresModules.length);
+    expect(inMemoryModules.length).toBeGreaterThan(0);
+
+    // Verify each in-memory module has a corresponding postgres module
+    for (const inMemoryModule of inMemoryModules) {
+      // Convert InMemoryX to PostgresX
+      const postgresModule = inMemoryModule.replace('InMemory', 'Postgres');
+      expect(postgresModules).toContain(postgresModule);
+
+      // Verify both files exist
+      expect(fs.existsSync(path.join(inMemoryDir, `${inMemoryModule}.ts`))).toBe(true);
+      expect(fs.existsSync(path.join(postgresDir, `${postgresModule}.ts`))).toBe(true);
+    }
+
+    // Log the discovered modules for verification
+    console.log('Discovered persistence modules:', {
+      count: inMemoryModules.length,
+      modules: inMemoryModules.map((m: string) => m.replace('InMemory', ''))
+    });
+  });
+
+  it('should verify that postgres persistence modules exist and are properly structured', async () => {
+    const fs = require('fs');
+    const path = require('path');
+
+    // Verify that PostgresRacingPersistenceModule exists and exports TypeORM repositories
+    const postgresRacingModulePath = path.join(__dirname, 'postgres', 'PostgresRacingPersistenceModule.ts');
+    expect(fs.existsSync(postgresRacingModulePath)).toBe(true);
+
+    // Read the module to verify it uses TypeORM
+    const moduleContent = fs.readFileSync(postgresRacingModulePath, 'utf-8');
+    expect(moduleContent).toContain('TypeOrmModule');
+    expect(moduleContent).toContain('TypeOrmDriverRepository');
+    expect(moduleContent).toContain('TypeOrmLeagueRepository');
+  });
+
+  it('should verify that in-memory modules exist for comparison', async () => {
+    const fs = require('fs');
+    const path = require('path');
+
+    // Verify that InMemoryRacingPersistenceModule exists
+    const inMemoryRacingModulePath = path.join(__dirname, 'inmemory', 'InMemoryRacingPersistenceModule.ts');
+    expect(fs.existsSync(inMemoryRacingModulePath)).toBe(true);
+
+    // Read the module to verify it uses InMemory repositories
+    const moduleContent = fs.readFileSync(inMemoryRacingModulePath, 'utf-8');
+    expect(moduleContent).toContain('InMemoryDriverRepository');
+    expect(moduleContent).toContain('InMemoryLeagueRepository');
+    expect(moduleContent).not.toContain('TypeOrmModule');
+  });
+
+  it('should verify docker-compose.test.yml is configured for PostgreSQL', async () => {
+    const fs = require('fs');
+    const path = require('path');
+
+    const dockerComposePath = path.join(__dirname, '..', '..', '..', '..', 'docker-compose.test.yml');
+    expect(fs.existsSync(dockerComposePath)).toBe(true);
+
+    const content = fs.readFileSync(dockerComposePath, 'utf-8');
+
+    // Verify PostgreSQL service exists
+    expect(content).toContain('db:');
+    expect(content).toContain('postgres:15-alpine');
+
+    // Verify API service uses postgres persistence
+    expect(content).toContain('GRIDPILOT_API_PERSISTENCE=postgres');
+    expect(content).toContain('DATABASE_URL=');
+
+    // Verify database connection environment variables
+    expect(content).toContain('POSTGRES_DB=gridpilot_test');
+    expect(content).toContain('POSTGRES_USER=gridpilot_test_user');
+    expect(content).toContain('POSTGRES_PASSWORD=gridpilot_test_pass');
+  });
+});
\ No newline at end of file
diff --git a/docker-compose.test.yml b/docker-compose.test.yml
index 5c1c2f8e1..f4fc02636 100644
--- a/docker-compose.test.yml
+++ b/docker-compose.test.yml
@@ -1,4 +1,25 @@
 services:
+  # PostgreSQL database for real-world testing
+  db:
+    image: postgres:15-alpine
+    environment:
+      - POSTGRES_DB=gridpilot_test
+      - POSTGRES_USER=gridpilot_test_user
+      - POSTGRES_PASSWORD=gridpilot_test_pass
+    ports:
+      - "5433:5432" # Use different port to avoid conflicts with dev
+    volumes:
+      - test_db_data:/var/lib/postgresql/data
+    networks:
+      - gridpilot-test-network
+    healthcheck:
+      test: ["CMD-SHELL", "pg_isready -U gridpilot_test_user -d gridpilot_test"]
+      interval: 2s
+      timeout: 2s
+      retries: 10
+      start_period: 5s
+    restart: "no"
+
   # Ready check - simple service that verifies dependencies are available
   ready:
     image: node:20-alpine
@@ -15,26 +36,32 @@ services:
       - gridpilot-test-network
     restart: "no"
 
-  # Real API server (not mock)
+  # Real API server with TypeORM/PostgreSQL
   api:
     image: node:20-alpine
     working_dir: /app/apps/api
     environment:
       - NODE_ENV=test
       - PORT=3000
-      - GRIDPILOT_API_PERSISTENCE=inmemory
+      - GRIDPILOT_API_PERSISTENCE=postgres
       - GRIDPILOT_API_BOOTSTRAP=true
       - GRIDPILOT_API_FORCE_RESEED=true
       - GRIDPILOT_FEATURES_JSON={"sponsors.portal":"enabled","admin.dashboard":"enabled"}
+      - DATABASE_URL=postgres://gridpilot_test_user:gridpilot_test_pass@db:5432/gridpilot_test
+      - POSTGRES_DB=gridpilot_test
+      - POSTGRES_USER=gridpilot_test_user
+      - POSTGRES_PASSWORD=gridpilot_test_pass
     ports:
       - "3101:3000"
     volumes:
       - ./:/app
       - /Users/marcmintel/Projects/gridpilot/node_modules:/app/node_modules:ro
-    command: ["sh", "-lc", "echo '[api] Starting real API...'; npm run start:dev"]
+    command: ["sh", "-lc", "echo '[api] Starting real API with TypeORM...'; npm run start:dev"]
     depends_on:
       ready:
         condition: service_completed_successfully
+      db:
+        condition: service_healthy
     networks:
       - gridpilot-test-network
     restart: unless-stopped
@@ -88,4 +115,7 @@ services:
 
 networks:
   gridpilot-test-network:
-    driver: bridge
\ No newline at end of file
+    driver: bridge
+
+volumes:
+  test_db_data:
\ No newline at end of file