diff --git a/application/core/model_settings.py b/application/core/model_settings.py
index 3f4dc030..5361f067 100644
--- a/application/core/model_settings.py
+++ b/application/core/model_settings.py
@@ -6,19 +6,6 @@ from typing import Dict, List, Optional
 logger = logging.getLogger(__name__)
 
 
-def _is_valid_api_key(key: Optional[str]) -> bool:
-    """
-    Check if an API key is valid (not None, not empty, not string 'None').
-    Handles Pydantic loading 'None' from .env as string "None".
-    """
-    if key is None:
-        return False
-    if not isinstance(key, str):
-        return False
-    key_stripped = key.strip().lower()
-    return key_stripped != "" and key_stripped != "none"
-
-
 class ModelProvider(str, Enum):
     OPENAI = "openai"
     AZURE_OPENAI = "azure_openai"
@@ -101,29 +88,29 @@ class ModelRegistry:
         if not settings.OPENAI_BASE_URL:
             self._add_docsgpt_models(settings)
         if (
-            _is_valid_api_key(settings.OPENAI_API_KEY)
-            or (settings.LLM_PROVIDER == "openai" and _is_valid_api_key(settings.API_KEY))
+            settings.OPENAI_API_KEY
+            or (settings.LLM_PROVIDER == "openai" and settings.API_KEY)
             or settings.OPENAI_BASE_URL
         ):
             self._add_openai_models(settings)
         if settings.OPENAI_API_BASE or (
-            settings.LLM_PROVIDER == "azure_openai" and _is_valid_api_key(settings.API_KEY)
+            settings.LLM_PROVIDER == "azure_openai" and settings.API_KEY
         ):
             self._add_azure_openai_models(settings)
-        if _is_valid_api_key(settings.ANTHROPIC_API_KEY) or (
-            settings.LLM_PROVIDER == "anthropic" and _is_valid_api_key(settings.API_KEY)
+        if settings.ANTHROPIC_API_KEY or (
+            settings.LLM_PROVIDER == "anthropic" and settings.API_KEY
         ):
             self._add_anthropic_models(settings)
-        if _is_valid_api_key(settings.GOOGLE_API_KEY) or (
-            settings.LLM_PROVIDER == "google" and _is_valid_api_key(settings.API_KEY)
+        if settings.GOOGLE_API_KEY or (
+            settings.LLM_PROVIDER == "google" and settings.API_KEY
         ):
             self._add_google_models(settings)
-        if _is_valid_api_key(settings.GROQ_API_KEY) or (
-            settings.LLM_PROVIDER == "groq" and _is_valid_api_key(settings.API_KEY)
+        if settings.GROQ_API_KEY or (
+            settings.LLM_PROVIDER == "groq" and settings.API_KEY
         ):
             self._add_groq_models(settings)
-        if _is_valid_api_key(settings.HUGGINGFACE_API_KEY) or (
-            settings.LLM_PROVIDER == "huggingface" and _is_valid_api_key(settings.API_KEY)
+        if settings.HUGGINGFACE_API_KEY or (
+            settings.LLM_PROVIDER == "huggingface" and settings.API_KEY
         ):
             self._add_huggingface_models(settings)
         # Default model selection
@@ -140,7 +127,7 @@ class ModelRegistry:
                 self.default_model_id = settings.LLM_NAME
 
         if not self.default_model_id:
-            if settings.LLM_PROVIDER and _is_valid_api_key(settings.API_KEY):
+            if settings.LLM_PROVIDER and settings.API_KEY:
                 for model_id, model in self.models.items():
                     if model.provider.value == settings.LLM_PROVIDER:
                         self.default_model_id = model_id
@@ -178,7 +165,7 @@ class ModelRegistry:
                     )
         else:
             # Standard OpenAI API usage - add standard models if API key is valid
-            if _is_valid_api_key(settings.OPENAI_API_KEY):
+            if settings.OPENAI_API_KEY:
                 for model in OPENAI_MODELS:
                     self.models[model.id] = model
 
diff --git a/application/core/model_utils.py b/application/core/model_utils.py
index 32f207f5..f24dbf47 100644
--- a/application/core/model_utils.py
+++ b/application/core/model_utils.py
@@ -1,6 +1,6 @@
 from typing import Any, Dict, Optional
 
-from application.core.model_settings import ModelRegistry, _is_valid_api_key
+from application.core.model_settings import ModelRegistry
 
 
 def get_api_key_for_provider(provider: str) -> Optional[str]:
@@ -19,11 +19,9 @@ def get_api_key_for_provider(provider: str) -> Optional[str]:
     }
 
     provider_key = provider_key_map.get(provider)
-    if provider_key and _is_valid_api_key(provider_key):
+    if provider_key:
         return provider_key
-    if _is_valid_api_key(settings.API_KEY):
-        return settings.API_KEY
-    return None
+    return settings.API_KEY
 
 
 def get_all_available_models() -> Dict[str, Dict[str, Any]]:
diff --git a/application/core/settings.py b/application/core/settings.py
index 1cc36b18..c02812e7 100644
--- a/application/core/settings.py
+++ b/application/core/settings.py
@@ -2,6 +2,7 @@ import os
 from pathlib import Path
 from typing import Optional
 
+from pydantic import field_validator
 from pydantic_settings import BaseSettings, SettingsConfigDict
 
 current_dir = os.path.dirname(
@@ -158,6 +159,36 @@ class Settings(BaseSettings):
     COMPRESSION_PROMPT_VERSION: str = "v1.0"  # Track prompt iterations
     COMPRESSION_MAX_HISTORY_POINTS: int = 3  # Keep only last N compression points to prevent DB bloat
 
+    @field_validator(
+        "API_KEY",
+        "OPENAI_API_KEY",
+        "ANTHROPIC_API_KEY",
+        "GOOGLE_API_KEY",
+        "GROQ_API_KEY",
+        "HUGGINGFACE_API_KEY",
+        "EMBEDDINGS_KEY",
+        "FALLBACK_LLM_API_KEY",
+        "QDRANT_API_KEY",
+        "ELEVENLABS_API_KEY",
+        "INTERNAL_KEY",
+        mode="before",
+    )
+    @classmethod
+    def normalize_api_key(cls, v: Optional[str]) -> Optional[str]:
+        """
+        Normalize API keys: convert 'None', 'none', empty strings,
+        and whitespace-only strings to actual None.
+        Handles Pydantic loading 'None' from .env as string "None".
+        """
+        if v is None:
+            return None
+        if not isinstance(v, str):
+            return v
+        stripped = v.strip()
+        if stripped == "" or stripped.lower() == "none":
+            return None
+        return stripped
+
 
 # Project root is one level above application/
 path = Path(__file__).parent.parent.parent.absolute()
diff --git a/deployment/docker-compose-azure.yaml b/deployment/docker-compose-azure.yaml
index 9e8b6fce..de62d3a0 100644
--- a/deployment/docker-compose-azure.yaml
+++ b/deployment/docker-compose-azure.yaml
@@ -11,17 +11,13 @@ services:
 
   backend:
     build: ../application
+    env_file:
+      - ../.env
     environment:
-      - API_KEY=$OPENAI_API_KEY
-      - EMBEDDINGS_KEY=$OPENAI_API_KEY
+      # Override URLs to use docker service names
       - CELERY_BROKER_URL=redis://redis:6379/0
       - CELERY_RESULT_BACKEND=redis://redis:6379/1
       - MONGO_URI=mongodb://mongo:27017/docsgpt
-      - OPENAI_API_KEY=$OPENAI_API_KEY
-      - OPENAI_API_BASE=$OPENAI_API_BASE
-      - OPENAI_API_VERSION=$OPENAI_API_VERSION
-      - AZURE_DEPLOYMENT_NAME=$AZURE_DEPLOYMENT_NAME
-      - AZURE_EMBEDDINGS_DEPLOYMENT_NAME=$AZURE_EMBEDDINGS_DEPLOYMENT_NAME
     ports:
       - "7091:7091"
     volumes:
@@ -35,18 +31,14 @@ services:
   worker:
     build: ../application
     command: celery -A application.app.celery worker -l INFO
+    env_file:
+      - ../.env
     environment:
-      - API_KEY=$OPENAI_API_KEY
-      - EMBEDDINGS_KEY=$OPENAI_API_KEY
+      # Override URLs to use docker service names
       - CELERY_BROKER_URL=redis://redis:6379/0
       - CELERY_RESULT_BACKEND=redis://redis:6379/1
       - MONGO_URI=mongodb://mongo:27017/docsgpt
       - API_URL=http://backend:7091
-      - OPENAI_API_KEY=$OPENAI_API_KEY
-      - OPENAI_API_BASE=$OPENAI_API_BASE
-      - OPENAI_API_VERSION=$OPENAI_API_VERSION
-      - AZURE_DEPLOYMENT_NAME=$AZURE_DEPLOYMENT_NAME
-      - AZURE_EMBEDDINGS_DEPLOYMENT_NAME=$AZURE_EMBEDDINGS_DEPLOYMENT_NAME
     depends_on:
         - redis
         - mongo
diff --git a/deployment/docker-compose.yaml b/deployment/docker-compose.yaml
index 91c22409..6c99166d 100644
--- a/deployment/docker-compose.yaml
+++ b/deployment/docker-compose.yaml
@@ -19,17 +19,11 @@ services:
     env_file:
       - ../.env
     environment:
-      - API_KEY=$API_KEY
-      - EMBEDDINGS_KEY=$EMBEDDINGS_KEY
-      - EMBEDDINGS_BASE_URL=$EMBEDDINGS_BASE_URL
-      - LLM_PROVIDER=$LLM_PROVIDER
-      - LLM_NAME=$LLM_NAME
+      # Override URLs to use docker service names
       - CELERY_BROKER_URL=redis://redis:6379/0
       - CELERY_RESULT_BACKEND=redis://redis:6379/1
       - MONGO_URI=mongodb://mongo:27017/docsgpt
       - CACHE_REDIS_URL=redis://redis:6379/2
-      - OPENAI_BASE_URL=$OPENAI_BASE_URL
-      - INTERNAL_KEY=$INTERNAL_KEY
     ports:
       - "7091:7091"
     volumes:
@@ -47,17 +41,12 @@ services:
     env_file:
       - ../.env
     environment:
-      - API_KEY=$API_KEY
-      - EMBEDDINGS_KEY=$EMBEDDINGS_KEY
-      - EMBEDDINGS_BASE_URL=$EMBEDDINGS_BASE_URL
-      - LLM_PROVIDER=$LLM_PROVIDER
-      - LLM_NAME=$LLM_NAME
+      # Override URLs to use docker service names
       - CELERY_BROKER_URL=redis://redis:6379/0
       - CELERY_RESULT_BACKEND=redis://redis:6379/1
       - MONGO_URI=mongodb://mongo:27017/docsgpt
       - API_URL=http://backend:7091
       - CACHE_REDIS_URL=redis://redis:6379/2
-      - INTERNAL_KEY=$INTERNAL_KEY
     volumes:
       - ../application/indexes:/app/indexes
       - ../application/inputs:/app/inputs