diff --git a/.env.example b/.env.example
index 2911e09..1c9211c 100644
--- a/.env.example
+++ b/.env.example
@@ -12,3 +12,13 @@ AI_HANDLER_URL="http://ai_service:8000"
 # OpenAI API Key
 OPENAI_API_KEY=your_openai_api_key_here
 AI_HANDLER_TOKEN=common_token_here
+
+# db_service
+LOG_TOKEN=your_log_token_here
+
+
+# PostgreSQL Configuration
+POSTGRES_USER=database_user
+POSTGRES_PASSWORD=database_password
+POSTGRES_DB=database_name
+POSTGRES_HOST=postgres
\ No newline at end of file
diff --git a/db_service/Dockerfile b/db_service/Dockerfile
new file mode 100644
index 0000000..30c68f8
--- /dev/null
+++ b/db_service/Dockerfile
@@ -0,0 +1,20 @@
+FROM python:3.11-slim
+
+# Prevent Python from buffering stdout/stderr so logs appear immediately
+ENV PYTHONUNBUFFERED=1
+
+# Install system dependencies (none needed for asyncpg on slim)
+
+WORKDIR /app
+
+# Install Python dependencies first to leverage Docker layer caching
+COPY requirements.txt .
+RUN pip install --no-cache-dir -r requirements.txt
+
+# Copy service source code only after dependencies
+COPY . /app
+
+EXPOSE 8000
+
+# Use Uvicorn as the ASGI server
+CMD ["uvicorn", "main:app", "--host", "0.0.0.0", "--port", "8000"]
diff --git a/db_service/main.py b/db_service/main.py
new file mode 100644
index 0000000..39affc4
--- /dev/null
+++ b/db_service/main.py
@@ -0,0 +1,182 @@
+from __future__ import annotations
+
+import logging
+import os
+from typing import AsyncGenerator
+
+from dotenv import load_dotenv
+from fastapi import Depends, FastAPI, Header, HTTPException, status
+from pydantic import BaseModel, Field
+from sqlalchemy import BigInteger, Column, MetaData, Table, Text, text
+from sqlalchemy.exc import OperationalError
+from sqlalchemy.ext.asyncio import (
+    AsyncEngine,
+    AsyncSession,
+    async_sessionmaker,
+    create_async_engine,
+)
+
+# ---------------------------------------------------------------------------
+# Environment & logging setup
+# ---------------------------------------------------------------------------
+
+load_dotenv()
+LOG_LEVEL = os.getenv("LOG_LEVEL", "INFO").upper()
+logging.basicConfig(level=LOG_LEVEL, format="%(levelname)s | %(name)s | %(message)s")
+log = logging.getLogger("db_service")
+
+LOG_TOKEN = os.getenv("LOG_TOKEN", "changeme")
+POSTGRES_USER = os.getenv("POSTGRES_USER", "postgres")
+POSTGRES_PASSWORD = os.getenv("POSTGRES_PASSWORD", "postgres")
+POSTGRES_DB = os.getenv("POSTGRES_DB", "botbot")
+POSTGRES_HOST = os.getenv("POSTGRES_HOST", "postgres")
+POSTGRES_PORT = os.getenv("POSTGRES_PORT", "5432")
+
+DATABASE_URL = (
+    f"postgresql+asyncpg://{POSTGRES_USER}:{POSTGRES_PASSWORD}" f"@{POSTGRES_HOST}:{POSTGRES_PORT}/{POSTGRES_DB}"
+)
+ADMIN_URL = (
+    f"postgresql+asyncpg://{POSTGRES_USER}:{POSTGRES_PASSWORD}" f"@{POSTGRES_HOST}:{POSTGRES_PORT}/postgres"
+)
+
+# ---------------------------------------------------------------------------
+# SQLAlchemy table definition (metadata)
+# ---------------------------------------------------------------------------
+
+metadata = MetaData()
+
+messages = Table(
+    "messages",
+    metadata,
+    Column("event_id", Text, primary_key=True),
+    Column("room_id", Text, nullable=False),
+    Column("user_id", Text, nullable=False),
+    Column("ts_ms", BigInteger, nullable=False),
+    Column("body", Text, nullable=False),
+)
+
+# ---------------------------------------------------------------------------
+# FastAPI app
+# ---------------------------------------------------------------------------
+
+app = FastAPI(title="Botbot Logging Service", version="1.1.0")
+
+
+class MessageIn(BaseModel):
+    """Payload received from matrix_service."""
+
+    event_id: str = Field(..., example="$14327358242610PhrSn:matrix.org")
+    room_id: str = Field(..., example="!someroomid:matrix.org")
+    user_id: str = Field(..., example="@alice:matrix.org")
+    ts_ms: int = Field(..., example=1713866689000, description="Matrix server_timestamp in ms since epoch")
+    body: str = Field(..., example="Hello, world!")
+
+
+# ---------------------------------------------------------------------------
+# Database engine/session factories (populated on startup)
+# ---------------------------------------------------------------------------
+
+engine: AsyncEngine | None = None
+SessionLocal: async_sessionmaker[AsyncSession] | None = None
+
+
+async def ensure_database_exists() -> None:
+    """Connect to the admin DB and create `POSTGRES_DB` if it is missing."""
+
+    log.info("Checking whether database %s exists", POSTGRES_DB)
+
+    admin_engine = create_async_engine(ADMIN_URL, pool_pre_ping=True)
+    try:
+        async with admin_engine.begin() as conn:
+            db_exists = await conn.scalar(
+                text("SELECT 1 FROM pg_database WHERE datname = :db"),
+                {"db": POSTGRES_DB},
+            )
+            if not db_exists:
+                log.warning("Database %s not found – creating it", POSTGRES_DB)
+                await conn.execute(text(f'CREATE DATABASE "{POSTGRES_DB}"'))
+                log.info("Database %s created", POSTGRES_DB)
+    finally:
+        await admin_engine.dispose()
+
+
+async def create_engine_and_tables() -> None:
+    """Initialise SQLAlchemy engine and create the `messages` table if needed."""
+
+    global engine, SessionLocal  # noqa: PLW0603
+
+    engine = create_async_engine(DATABASE_URL, pool_pre_ping=True)
+
+    async with engine.begin() as conn:
+        await conn.run_sync(metadata.create_all)
+
+    SessionLocal = async_sessionmaker(engine, expire_on_commit=False)
+    log.info("Database initialised and tables ensured.")
+
+
+async def get_session() -> AsyncGenerator[AsyncSession, None]:
+    async with SessionLocal() as session:  # type: ignore[arg-type]
+        yield session
+
+
+# ---------------------------------------------------------------------------
+# Lifespan events
+# ---------------------------------------------------------------------------
+
+@app.on_event("startup")
+async def on_startup() -> None:  # noqa: D401 (imperative mood)
+    """Ensure the database *and* table exist before serving traffic."""
+    log.info("Starting up")
+
+    try:
+        await create_engine_and_tables()
+    except OperationalError as err:
+        # Common case: database itself does not yet exist.
+        if "does not exist" in str(err):
+            log.warning("Primary database missing – attempting to create it")
+            await ensure_database_exists()
+            # Retry now that DB exists
+            await create_engine_and_tables()
+        else:
+            log.error("Database connection failed: %s", err)
+            raise
+
+
+@app.on_event("shutdown")
+async def on_shutdown() -> None:  # noqa: D401
+    if engine:
+        await engine.dispose()
+
+
+# ---------------------------------------------------------------------------
+# API endpoints
+# ---------------------------------------------------------------------------
+
+
+@app.get("/healthz", tags=["health"])
+async def healthz() -> dict[str, str]:
+    return {"status": "ok"}
+
+
+@app.post("/api/v1/log", status_code=status.HTTP_202_ACCEPTED, tags=["log"])
+async def log_message(
+    payload: MessageIn,
+    x_log_token: str = Header(alias="X-Log-Token"),
+    session: AsyncSession = Depends(get_session),
+) -> dict[str, str]:
+    """Persist one Matrix message to Postgres.
+
+    Requires header `X-Log-Token` matching the `LOG_TOKEN` env‑var.
+    """
+
+    if x_log_token != LOG_TOKEN:
+        raise HTTPException(status_code=status.HTTP_401_UNAUTHORIZED, detail="invalid token")
+
+    stmt = (
+        messages.insert()
+        .values(**payload.model_dump())
+        .on_conflict_do_nothing(index_elements=[messages.c.event_id])
+    )
+    await session.execute(stmt)
+    await session.commit()
+    return {"status": "accepted"}
diff --git a/db_service/requirements.txt b/db_service/requirements.txt
new file mode 100644
index 0000000..7a9715b
--- /dev/null
+++ b/db_service/requirements.txt
@@ -0,0 +1,10 @@
+# Web framework & ASGI server
+fastapi
+uvicorn[standard]
+
+# Database access
+sqlalchemy[asyncio]>=2.0
+asyncpg>=0.29
+
+# Environment / configuration helpers
+python-dotenv>=1.0
diff --git a/docker-compose.yml b/docker-compose.yml
index c7221a2..9b9f52c 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -1,4 +1,42 @@
 services:
+  # -----------------------
+  # Database (PostgreSQL)
+  # -----------------------
+  postgres:
+    image: postgres:16-alpine
+    restart: unless-stopped
+    environment:
+      - POSTGRES_USER
+      - POSTGRES_PASSWORD
+      - POSTGRES_DB
+    volumes:
+      - postgres-data:/var/lib/postgresql/data
+    healthcheck:
+      test: "pg_isready -U ${POSTGRES_USER} -d ${POSTGRES_DB}"
+      interval: 10s
+      timeout: 5s
+      retries: 5
+
+  # -----------------------
+  # Conversation‑logging microservice
+  # -----------------------
+  db_service:
+    build:
+      context: ./db_service
+    restart: unless-stopped
+    environment:
+      - POSTGRES_USER
+      - POSTGRES_PASSWORD
+      - POSTGRES_DB
+      - POSTGRES_HOST
+      - LOG_TOKEN
+    depends_on:
+      postgres:
+        condition: service_healthy
+    ports:
+      - "8000:8000"  # expose externally only if needed
+
+
   matrix_service:
     build: ./matrix_service
     environment:
@@ -25,6 +63,10 @@ services:
   redis:
     image: redis:7
     restart: unless-stopped
+    volumes:
+      - redis-data:/data    
 
 volumes:
-  matrix_data:
\ No newline at end of file
+  matrix_data:
+  redis-data:
+  postgres-data:
\ No newline at end of file
diff --git a/matrix_service/requirements.txt b/matrix_service/requirements.txt
index 170594a..8f2bc1e 100644
--- a/matrix_service/requirements.txt
+++ b/matrix_service/requirements.txt
@@ -1,4 +1,4 @@
-matrix-nio[e2e]>=0.25.0
+matrix-nio[e2e]>=0.25.2
 python-dotenv>=1.0.0
 httpx>=0.23.0
 pydantic>=1.10
\ No newline at end of file