diff --git a/.autover/changes/1c4eb3ce-e61b-4119-ac8d-d431f7b426cb.json b/.autover/changes/1c4eb3ce-e61b-4119-ac8d-d431f7b426cb.json
new file mode 100644
index 000000000..063b9fbd4
--- /dev/null
+++ b/.autover/changes/1c4eb3ce-e61b-4119-ac8d-d431f7b426cb.json
@@ -0,0 +1,11 @@
+{
+  "Projects": [
+    {
+      "Name": "Amazon.Lambda.TestTool",
+      "Type": "Patch",
+      "ChangelogMessages": [
+        "Update default log level to be ERROR in production and INFORMATION in debug mode."
+      ]
+    }
+  ]
+}
\ No newline at end of file
diff --git a/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Amazon.Lambda.TestTool.csproj b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Amazon.Lambda.TestTool.csproj
index e1997b4cd..184b33bf3 100644
--- a/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Amazon.Lambda.TestTool.csproj
+++ b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Amazon.Lambda.TestTool.csproj
@@ -56,4 +56,13 @@
   <ItemGroup>
 	  <EmbeddedResource Include="Resources\**" />
   </ItemGroup>
+  <ItemGroup>
+    <None Update="appsettings.json">
+      <CopyToOutputDirectory>PreserveNewest</CopyToOutputDirectory>
+    </None>
+    <None Update="appsettings.Development.json">
+      <CopyToOutputDirectory>PreserveNewest</CopyToOutputDirectory>
+    </None>
+  </ItemGroup>
+
 </Project>
diff --git a/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Configuration/ConfigurationSetup.cs b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Configuration/ConfigurationSetup.cs
new file mode 100644
index 000000000..8e3395306
--- /dev/null
+++ b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Configuration/ConfigurationSetup.cs
@@ -0,0 +1,53 @@
+// Copyright Amazon.com, Inc. or its affiliates. All Rights Reserved.
+// SPDX-License-Identifier: Apache-2.0
+
+using System.Reflection;
+
+namespace Amazon.Lambda.TestTool.Configuration;
+
+/// <summary>
+/// Handles the configuration setup for the Lambda Test Tool by loading settings from JSON files.
+/// </summary>
+/// <remarks>
+/// This class uses dependency injection to receive an Assembly instance, allowing for better testability
+/// and flexibility in determining the configuration file locations.
+/// </remarks>
+public class ConfigurationSetup(Assembly assembly)
+{
+    /// <summary>
+    /// Retrieves the application configuration by loading settings from JSON configuration files.
+    /// </summary>
+    /// <returns>An IConfiguration instance containing the application settings.</returns>
+    /// <exception cref="InvalidOperationException">Thrown when unable to determine the assembly location.</exception>
+    /// <remarks>
+    /// The method performs the following steps:
+    /// 1. Locates the directory containing the assembly
+    /// 2. Loads the base configuration from appsettings.json
+    /// 3. Loads environment-specific configuration from appsettings.{environment}.json if available
+    /// </remarks>
+    public IConfiguration GetConfiguration()
+    {
+        // Get the directory where the assembly is located
+        var assemblyLocation = assembly.Location;
+        var packageDirectory = Path.GetDirectoryName(assemblyLocation)
+                               ?? throw new InvalidOperationException("Unable to determine assembly location");
+
+        // Construct path to configuration file
+        var appsettingsPath = Path.Combine(packageDirectory, "appsettings.json");
+        if (!File.Exists(appsettingsPath))
+        {
+            Console.WriteLine($"Warning: appsettings.json not found at {appsettingsPath}");
+        }
+
+        // Determine the current environment
+        var environment = Environment.GetEnvironmentVariable("ASPNETCORE_ENVIRONMENT") ?? "Production";
+
+        // Build and return the configuration
+        var builder = new ConfigurationBuilder()
+            .SetBasePath(packageDirectory)
+            .AddJsonFile("appsettings.json", optional: false, reloadOnChange: true)
+            .AddJsonFile($"appsettings.{environment}.json", optional: true, reloadOnChange: true);
+
+        return builder.Build();
+    }
+}
diff --git a/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Extensions/ServiceCollectionExtensions.cs b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Extensions/ServiceCollectionExtensions.cs
index 1afe1704c..b518fee7c 100644
--- a/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Extensions/ServiceCollectionExtensions.cs
+++ b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Extensions/ServiceCollectionExtensions.cs
@@ -1,6 +1,8 @@
 // Copyright Amazon.com, Inc. or its affiliates. All Rights Reserved.
 // SPDX-License-Identifier: Apache-2.0
 
+using System.Reflection;
+using Amazon.Lambda.TestTool.Configuration;
 using Amazon.Lambda.TestTool.Services;
 using Amazon.Lambda.TestTool.Services.IO;
 using Microsoft.Extensions.DependencyInjection.Extensions;
diff --git a/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Processes/ApiGatewayEmulatorProcess.cs b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Processes/ApiGatewayEmulatorProcess.cs
index b585187de..35efb968a 100644
--- a/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Processes/ApiGatewayEmulatorProcess.cs
+++ b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Processes/ApiGatewayEmulatorProcess.cs
@@ -1,6 +1,7 @@
 // Copyright Amazon.com, Inc. or its affiliates. All Rights Reserved.
 // SPDX-License-Identifier: Apache-2.0
 
+using System.Reflection;
 using Amazon.Lambda.APIGatewayEvents;
 using Amazon.Lambda.Model;
 using Amazon.Lambda.TestTool.Commands.Settings;
@@ -9,6 +10,8 @@
 using Amazon.Lambda.TestTool.Services;
 
 using System.Text.Json;
+using Amazon.Lambda.TestTool.Configuration;
+using Amazon.Lambda.TestTool.Utilities;
 
 namespace Amazon.Lambda.TestTool.Processes;
 
@@ -46,6 +49,8 @@ public static ApiGatewayEmulatorProcess Startup(RunCommandSettings settings, Can
 
         var builder = WebApplication.CreateBuilder();
 
+        Utils.ConfigureWebApplicationBuilder(builder);
+
         builder.Services.AddApiGatewayEmulatorServices();
 
         var serviceUrl = $"http://{settings.LambdaEmulatorHost}:{settings.ApiGatewayEmulatorPort}";
diff --git a/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Processes/TestToolProcess.cs b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Processes/TestToolProcess.cs
index d6823c6d6..420631a0b 100644
--- a/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Processes/TestToolProcess.cs
+++ b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Processes/TestToolProcess.cs
@@ -1,10 +1,13 @@
 // Copyright Amazon.com, Inc. or its affiliates. All Rights Reserved.
 // SPDX-License-Identifier: Apache-2.0
 
+using System.Reflection;
 using Amazon.Lambda.TestTool.Commands.Settings;
 using Amazon.Lambda.TestTool.Components;
+using Amazon.Lambda.TestTool.Configuration;
 using Amazon.Lambda.TestTool.Services;
 using Amazon.Lambda.TestTool.Services.IO;
+using Amazon.Lambda.TestTool.Utilities;
 using Microsoft.Extensions.FileProviders;
 using Microsoft.Extensions.Options;
 
@@ -37,6 +40,8 @@ public static TestToolProcess Startup(RunCommandSettings settings, CancellationT
     {
         var builder = WebApplication.CreateBuilder();
 
+        Utils.ConfigureWebApplicationBuilder(builder);
+
         builder.Services.AddSingleton<IRuntimeApiDataStoreManager, RuntimeApiDataStoreManager>();
         builder.Services.AddSingleton<IThemeService, ThemeService>();
 
diff --git a/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Utilities/Utils.cs b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Utilities/Utils.cs
index ead444dd3..34f200dd7 100644
--- a/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Utilities/Utils.cs
+++ b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/Utilities/Utils.cs
@@ -3,6 +3,7 @@
 
 using System.Reflection;
 using System.Text.Json;
+using Amazon.Lambda.TestTool.Configuration;
 
 namespace Amazon.Lambda.TestTool.Utilities;
 
@@ -74,4 +75,32 @@ public static string TryPrettyPrintJson(string? data)
             return data ?? string.Empty;
         }
     }
+
+    /// <summary>
+    /// Configures the web application builder with necessary services, configuration, and logging setup.
+    /// </summary>
+    /// <param name="builder">The WebApplicationBuilder instance to be configured</param>
+    /// <remarks>
+    /// This method performs the following configurations:
+    /// 1. Registers the current assembly as a singleton service
+    /// 2. Registers ConfigurationSetup as a singleton service
+    /// 3. Builds and applies custom configuration
+    /// 4. Sets up logging providers with console output
+    /// </remarks>
+    /// <exception cref="InvalidOperationException">
+    /// Thrown when ConfigurationSetup service cannot be resolved from the service provider
+    /// </exception>
+    public static void ConfigureWebApplicationBuilder(WebApplicationBuilder builder)
+    {
+        builder.Services.AddSingleton(typeof(Assembly), typeof(ConfigurationSetup).Assembly);
+        builder.Services.AddSingleton<ConfigurationSetup>();
+
+        var configSetup = builder.Services.BuildServiceProvider().GetRequiredService<ConfigurationSetup>();
+        var configuration = configSetup.GetConfiguration();
+        builder.Configuration.AddConfiguration(configuration);
+
+        builder.Logging.ClearProviders();
+        builder.Logging.AddConfiguration(configuration.GetSection("Logging"));
+        builder.Logging.AddConsole();
+    }
 }
diff --git a/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/appsettings.Development.json b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/appsettings.Development.json
index 08696af70..0b8026458 100644
--- a/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/appsettings.Development.json
+++ b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/appsettings.Development.json
@@ -1,8 +1,7 @@
 {
   "Logging": {
     "LogLevel": {
-      "Default": "Trace",
-      "Microsoft.AspNetCore": "Trace"
+      "Default": "Information"
     }
   },
   "DetailedErrors": true
diff --git a/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/appsettings.json b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/appsettings.json
index 9dbb62aee..8a024f3bd 100644
--- a/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/appsettings.json
+++ b/Tools/LambdaTestTool-v2/src/Amazon.Lambda.TestTool/appsettings.json
@@ -1,9 +1,7 @@
 {
   "Logging": {
     "LogLevel": {
-      "Default": "Trace",
-      "Microsoft": "Trace",
-      "Microsoft.AspNetCore": "Trace"
+      "Default": "Error"
     }
   },
   "AllowedHosts": "*"
diff --git a/Tools/LambdaTestTool-v2/tests/Amazon.Lambda.TestTool.UnitTests/Configuration/ConfigurationSetupTests.cs b/Tools/LambdaTestTool-v2/tests/Amazon.Lambda.TestTool.UnitTests/Configuration/ConfigurationSetupTests.cs
new file mode 100644
index 000000000..34cb746d3
--- /dev/null
+++ b/Tools/LambdaTestTool-v2/tests/Amazon.Lambda.TestTool.UnitTests/Configuration/ConfigurationSetupTests.cs
@@ -0,0 +1,113 @@
+// Copyright Amazon.com, Inc. or its affiliates. All Rights Reserved.
+// SPDX-License-Identifier: Apache-2.0
+
+using System.Reflection;
+using Amazon.Lambda.TestTool.Configuration;
+using Moq;
+using Xunit;
+
+namespace Amazon.Lambda.TestTool.UnitTests.Configuration;
+
+public class ConfigurationSetupTests
+{
+    [Fact]
+    public void GetConfiguration_WithValidAssemblyLocation_ReturnsConfiguration()
+    {
+        // Arrange
+        var mockAssembly = new Mock<Assembly>();
+        var testDirectory = Path.Combine(Path.GetTempPath(), Guid.NewGuid().ToString());
+        Directory.CreateDirectory(testDirectory);
+
+        try
+        {
+            // Create test appsettings.json
+            File.WriteAllText(
+                Path.Combine(testDirectory, "appsettings.json"),
+                @"{""TestSetting"": ""TestValue""}"
+            );
+
+            mockAssembly
+                .Setup(x => x.Location)
+                .Returns(Path.Combine(testDirectory, "dummy.dll"));
+
+            var configSetup = new ConfigurationSetup(mockAssembly.Object);
+
+            // Act
+            var configuration = configSetup.GetConfiguration();
+
+            // Assert
+            Assert.NotNull(configuration);
+            Assert.Equal("TestValue", configuration["TestSetting"]);
+        }
+        finally
+        {
+            // Cleanup
+            Directory.Delete(testDirectory, true);
+        }
+    }
+
+    [Fact]
+    public void GetConfiguration_WithEnvironmentSpecificConfig_LoadsBothConfigs()
+    {
+        // Arrange
+        var mockAssembly = new Mock<Assembly>();
+        var testDirectory = Path.Combine(Path.GetTempPath(), Guid.NewGuid().ToString());
+        Directory.CreateDirectory(testDirectory);
+
+        try
+        {
+            // Create test appsettings.json
+            File.WriteAllText(
+                Path.Combine(testDirectory, "appsettings.json"),
+                @"{""TestSetting"": ""BaseValue"", ""CommonSetting"": ""BaseValue""}"
+            );
+
+            // Create test appsettings.Development.json
+            File.WriteAllText(
+                Path.Combine(testDirectory, "appsettings.Development.json"),
+                @"{""TestSetting"": ""DevValue""}"
+            );
+
+            Environment.SetEnvironmentVariable("ASPNETCORE_ENVIRONMENT", "Development");
+
+            mockAssembly
+                .Setup(x => x.Location)
+                .Returns(Path.Combine(testDirectory, "dummy.dll"));
+
+            var configSetup = new ConfigurationSetup(mockAssembly.Object);
+
+            // Act
+            var configuration = configSetup.GetConfiguration();
+
+            // Assert
+            Assert.NotNull(configuration);
+            Assert.Equal("DevValue", configuration["TestSetting"]); // Overridden value
+            Assert.Equal("BaseValue", configuration["CommonSetting"]); // Base value
+        }
+        finally
+        {
+            // Cleanup
+            Directory.Delete(testDirectory, true);
+            Environment.SetEnvironmentVariable("ASPNETCORE_ENVIRONMENT", null);
+        }
+    }
+
+    [Fact]
+    public void GetConfiguration_WithInvalidAssemblyLocation_ThrowsInvalidOperationException()
+    {
+        // Arrange
+        var mockAssembly = new Mock<Assembly>();
+        mockAssembly
+            .Setup(x => x.Location)
+            .Returns(string.Empty);
+
+        var configSetup = new ConfigurationSetup(mockAssembly.Object);
+
+        // Act & Assert
+        var exception = Assert.Throws<InvalidOperationException>(
+            () => configSetup.GetConfiguration()
+        );
+        Assert.Equal("Unable to determine assembly location", exception.Message);
+    }
+}
+