diff --git a/.devcontainer/README.md b/.devcontainer/README.md
index 5209a483d00..8854410980b 100644
--- a/.devcontainer/README.md
+++ b/.devcontainer/README.md
@@ -91,13 +91,21 @@ Follow these steps to get your NVIDIA Dynamo development environment up and runn
 
 ### Step 1: Build the Development Container Image
 
-Build `dynamo:latest-vllm` from scratch from the source:
+Build `dynamo:latest-vllm-local-dev` from scratch from the source:
 
 ```bash
-./container/build.sh --target dev --framework VLLM
+# Single command approach (recommended)
+./container/build.sh --framework VLLM --target local-dev
+# Creates both dynamo:latest-vllm and dynamo:latest-vllm-local-dev
+
+# Alternatively, you can build a development container then local-dev
+./container/build.sh --framework VLLM
+# Now you have a development image dynamo:latest-vllm
+./container/build.sh --dev-image dynamo:latest-vllm --framework VLLM
+# Now you have a local-dev image dynamo:latest-vllm-local-dev
 ```
 
-The container will be built and give certain file permissions to your local uid and gid.
+The local-dev image will give you local user permissions matching your host user and includes extra developer utilities (debugging tools, text editors, system monitors, etc.).
 
 ### Step 2: Install Dev Containers Extension
 
@@ -235,30 +243,6 @@ cp .devcontainer/devcontainer.json .devcontainer/jensen_dev/devcontainer.json
 
 Common customizations include additional mounts, environment variables, IDE extensions, and build arguments. When you open a new Dev Container, you can pick from any of the `.devcontainer/<path>/devcontainer.json` files available.
 
-### SGLANG Custom devcontainer.json Configuration (EXPERIMENTAL)
-
-This is experimental. Please update/fix if you encounter problems. For sglang Dev Container, you first need to build `dynamo:latest-sglang-local-dev` image like this (wait about half an hour):
-
-```bash
-./container/build.sh --framework SGLANG --target local-dev
-```
-
-Then, make a copy of the `devcontainer.json file` to a directory of your choice. For this example, we'll just call it `sglang`:
-
-```bash
-mkdir .devcontainer/sglang/
-cp -a .devcontainer/devcontainer.json .devcontainer/sglang/
-```
-
-Afterwards, edit your `.devcontainer/sglang/devcontainer.json` so that the name and image correspond to SGLANG. Example:
-```json
-    "name": "[sglang] This is my amazing custom Dev Container Development",
-    ...
-    "image": "dynamo:latest-sglang-local-dev",
-```
-
-Now, go to **Dev Containers: Open Folder in Container** and select `[sglang] This is my amazing custom Dev Container Development`. The post-create.sh script should be running.
-
 
 ### SSH Keys for Git Operations
 
@@ -372,13 +356,15 @@ If you see errors like "container is not running" or "An error occurred setting
 
 **Common Causes and Solutions:**
 
-1. **Missing base image:**
+1. **Missing a local-dev image:**
    ```bash
-   # Check if the required image exists
+   # Check if the required local-dev image exists
    docker images | grep dynamo
 
-   # If missing, build the dev image first
-   ./container/build.sh --target local-dev
+   # If missing, build the dev image first, then build local-dev
+   ./container/build.sh --framework vllm
+   ./container/build.sh --dev-image dynamo:latest-vllm --framework vllm
+   # Output: dynamo:latest-vllm-local-dev
    ```
 
 2. **Container startup failure:**
diff --git a/container/Dockerfile.local_dev b/container/Dockerfile.local_dev
new file mode 100644
index 00000000000..19a6a1e5a00
--- /dev/null
+++ b/container/Dockerfile.local_dev
@@ -0,0 +1,125 @@
+# syntax=docker/dockerfile:1.10.0
+# SPDX-FileCopyrightText: Copyright (c) 2024-2025 NVIDIA CORPORATION & AFFILIATES. All rights reserved.
+# SPDX-License-Identifier: Apache-2.0
+
+# This Dockerfile creates a local development environment for Dev Container plug-in use.
+# It takes a BASE image (typically the dev target) and adds local-dev specific configurations
+# including additional developer utilities and tools.
+#
+# Usage:
+# - Dev Container IDE Extension: Use directly with VS Code/Cursor Dev Container extension
+# - Command line: run.sh --image <local-dev-image> --mount-workspace ...
+#   where the ubuntu user inside the container is mapped to your local user login
+
+ARG DEV_BASE=""
+FROM ${DEV_BASE} AS local-dev
+
+# Don't want ubuntu to be editable, just change uid and gid.
+ENV USERNAME=ubuntu
+ARG USER_UID
+ARG USER_GID
+ARG WORKSPACE_DIR=/workspace
+
+ARG ARCH
+
+# Update package lists and install developer utilities. Some of these may exist in the base image,
+# but to ensure consistency across all dev images, we explicitly list all required dev tools here.
+RUN apt-get update && apt-get install -y \
+    # Development utilities
+    curl wget git vim nano \
+    # System utilities
+    htop nvtop tmux screen \
+    # Network utilities
+    net-tools iproute2 iputils-ping \
+    # Archive utilities
+    zip unzip rsync \
+    # Build tools
+    build-essential cmake autoconf automake libtool \
+    # Debug and analysis tools
+    gdb valgrind strace ltrace \
+    # Text processing
+    jq yq grep sed \
+    # File utilities
+    tree fd-find ripgrep \
+    # Shell utilities
+    zsh fish bash-completion
+
+# https://code.visualstudio.com/remote/advancedcontainers/add-nonroot-user
+# Configure user with sudo access for Dev Container workflows
+RUN apt-get install -y sudo gnupg2 gnupg1 \
+    && echo "$USERNAME ALL=(root) NOPASSWD:ALL" > /etc/sudoers.d/$USERNAME \
+    && chmod 0440 /etc/sudoers.d/$USERNAME \
+    && mkdir -p /home/$USERNAME \
+    && groupmod -g $USER_GID $USERNAME \
+    && usermod -u $USER_UID -g $USER_GID $USERNAME \
+    && chown -R $USERNAME:$USERNAME /home/$USERNAME \
+    && chsh -s /bin/bash $USERNAME
+
+# Install awk separately with fault tolerance
+# awk is a virtual package with multiple implementations (gawk, mawk, original-awk).
+# Separated because TensorRT-LLM builds failed on awk package conflicts.
+# This prevents main package installation failures due to awk availability issues.
+RUN (apt-get install -y gawk || \
+     apt-get install -y mawk || \
+     apt-get install -y original-awk || \
+     echo "Warning: Could not install any awk implementation") && \
+    (which awk && echo "awk successfully installed: $(which awk)" || echo "awk not available")
+
+# Add NVIDIA devtools repository and install development tools
+RUN wget -qO - https://developer.download.nvidia.com/devtools/repos/ubuntu2404/${ARCH}/nvidia.pub | gpg --dearmor -o /etc/apt/keyrings/nvidia-devtools.gpg && \
+    echo "deb [signed-by=/etc/apt/keyrings/nvidia-devtools.gpg] https://developer.download.nvidia.com/devtools/repos/ubuntu2404/${ARCH} /" | tee /etc/apt/sources.list.d/nvidia-devtools.list && \
+    apt-get update && \
+    apt-get install -y nsight-systems-2025.5.1
+
+# Clean up package lists at the end
+RUN rm -rf /var/lib/apt/lists/*
+
+# Set workspace directory variable
+ENV WORKSPACE_DIR=${WORKSPACE_DIR}
+
+# Development environment variables for the local-dev target
+# Path configuration notes:
+# - DYNAMO_HOME: Main project directory (workspace mount point)
+# - CARGO_TARGET_DIR: Build artifacts in workspace/target for persistence
+# - CARGO_HOME: Must be in $HOME/.cargo (not workspace) because:
+#               * Workspace gets mounted to different paths where cargo binaries may not exist
+#               * Contains critical cargo binaries and registry that need consistent paths
+# - RUSTUP_HOME: Must be in $HOME/.rustup (not workspace) because:
+#                * Contains rust toolchain binaries that must be at expected system paths
+#                * Workspace mount point would break rustup's toolchain resolution
+# - PATH: Includes cargo binaries for rust tool access
+ENV DYNAMO_HOME=${WORKSPACE_DIR}
+ENV CARGO_TARGET_DIR=${WORKSPACE_DIR}/target
+ENV CARGO_HOME=${HOME}/.cargo
+ENV RUSTUP_HOME=${HOME}/.rustup
+ENV PATH=${CARGO_HOME}/bin:$PATH
+
+# Copy Rust toolchain from system directories to user home directories with proper ownership
+RUN rsync -a --chown=$USER_UID:$USER_GID /usr/local/rustup/ $RUSTUP_HOME/
+
+RUN rsync -a --chown=$USER_UID:$USER_GID /usr/local/cargo/ $CARGO_HOME/
+
+# Copy virtual environment with proper ownership using rsync instead of chown.
+# Why rsync instead of chown -R:
+# chown -R is extremely slow in Docker containers, especially on large directory trees
+# like Python virtual environments with thousands of files. This is a well-documented
+# Docker performance issue. rsync --chown is 3-4x faster as it sets ownership during copy.
+RUN rsync -a --chown=$USER_UID:$USER_GID ${VIRTUAL_ENV}/ /tmp/venv-temp/ && \
+    rm -rf ${VIRTUAL_ENV} && \
+    mv /tmp/venv-temp ${VIRTUAL_ENV}
+
+# At this point, we are executing as the ubuntu user
+USER $USERNAME
+ENV HOME=/home/$USERNAME
+WORKDIR $HOME
+
+# https://code.visualstudio.com/remote/advancedcontainers/persist-bash-history
+RUN SNIPPET="export PROMPT_COMMAND='history -a' && export HISTFILE=$HOME/.commandhistory/.bash_history" \
+    && mkdir -p $HOME/.commandhistory \
+    && touch $HOME/.commandhistory/.bash_history \
+    && echo "$SNIPPET" >> "$HOME/.bashrc"
+
+RUN mkdir -p /home/$USERNAME/.cache/
+
+ENTRYPOINT ["/opt/nvidia/nvidia_entrypoint.sh"]
+CMD []
diff --git a/container/Dockerfile.vllm b/container/Dockerfile.vllm
index 4d267ec7287..a4628a0d298 100644
--- a/container/Dockerfile.vllm
+++ b/container/Dockerfile.vllm
@@ -289,125 +289,6 @@ RUN --mount=type=bind,source=./container/launch_message.txt,target=/workspace/la
 ENTRYPOINT ["/opt/nvidia/nvidia_entrypoint.sh"]
 CMD []
 
-#######################################################################
-########## Development (Dev Container only) ###########################
-#######################################################################
-#
-# This stage is for Dev Container plug-in use only.
-# It provides a local development environment with extra tools and dependencies
-# not present in the base runtime image.
-
-FROM runtime AS local-dev
-
-# Don't want ubuntu to be editable, just change uid and gid.
-ENV USERNAME=ubuntu
-ARG USER_UID
-ARG USER_GID
-ARG WORKSPACE_DIR=/workspace
-
-# Install utilities as root
-RUN apt-get update -y && \
-    apt-get install -y --no-install-recommends  \
-    # Install utilities
-    nvtop \
-    wget \
-    tmux \
-    vim \
-    git \
-    openssh-client \
-    iproute2 \
-    rsync \
-    zip \
-    unzip \
-    htop \
-    # Build Dependencies
-    autoconf \
-    automake \
-    cmake \
-    libtool \
-    meson \
-    net-tools \
-    pybind11-dev \
-    # Rust build dependencies
-    clang \
-    libclang-dev \
-    protobuf-compiler && \
-    rm -rf /var/lib/apt/lists/*
-
-
-ARG ARCH
-RUN wget -qO - https://developer.download.nvidia.com/devtools/repos/ubuntu2404/${ARCH}/nvidia.pub | gpg --dearmor -o /etc/apt/keyrings/nvidia-devtools.gpg && \
-    echo "deb [signed-by=/etc/apt/keyrings/nvidia-devtools.gpg] https://developer.download.nvidia.com/devtools/repos/ubuntu2404/${ARCH} /" | tee /etc/apt/sources.list.d/nvidia-devtools.list && \
-    apt-get update && \
-    apt-get install -y nsight-systems-2025.5.1 && \
-    rm -rf /var/lib/apt/lists/*
-
-COPY --from=runtime /usr/local/bin /usr/local/bin
-
-# https://code.visualstudio.com/remote/advancedcontainers/add-nonroot-user
-# Will use the default ubuntu user, but give sudo access
-# Needed so files permissions aren't set to root ownership when writing from inside container
-RUN apt-get update && apt-get install -y sudo gnupg2 gnupg1 \
-    && echo "$USERNAME ALL=(root) NOPASSWD:ALL" > /etc/sudoers.d/$USERNAME \
-    && chmod 0440 /etc/sudoers.d/$USERNAME \
-    && mkdir -p /home/$USERNAME \
-    && groupmod -g $USER_GID $USERNAME \
-    && usermod -u $USER_UID -g $USER_GID $USERNAME \
-    && chown -R $USERNAME:$USERNAME /home/$USERNAME \
-    && rm -rf /var/lib/apt/lists/* \
-    && chsh -s /bin/bash $USERNAME
-
-# At this point, we are executing as the ubuntu user
-USER $USERNAME
-ENV HOME=/home/$USERNAME
-WORKDIR $HOME
-
-# Set workspace directory variable
-ENV WORKSPACE_DIR=${WORKSPACE_DIR}
-
-# Development environment variables for the dev target
-# Path configuration notes:
-# - DYNAMO_HOME: Main project directory (workspace mount point)
-# - CARGO_TARGET_DIR: Build artifacts in workspace/target for persistence
-# - CARGO_HOME: Must be in $HOME/.cargo (not workspace) because:
-#               * Workspace gets mounted to different paths where cargo binaries may not exist
-#               * Contains critical cargo binaries and registry that need consistent paths
-# - RUSTUP_HOME: Must be in $HOME/.rustup (not workspace) because:
-#                * Contains rust toolchain binaries that must be at expected system paths
-#                * Workspace mount point would break rustup's toolchain resolution
-# - PATH: Includes cargo binaries for rust tool access
-ENV DYNAMO_HOME=${WORKSPACE_DIR}
-ENV CARGO_TARGET_DIR=${WORKSPACE_DIR}/target
-ENV CARGO_HOME=${HOME}/.cargo
-ENV RUSTUP_HOME=${HOME}/.rustup
-ENV PATH=${CARGO_HOME}/bin:$PATH
-
-COPY --from=dynamo_base --chown=$USER_UID:$USER_GID /usr/local/rustup $RUSTUP_HOME
-COPY --from=dynamo_base --chown=$USER_UID:$USER_GID /usr/local/cargo $CARGO_HOME
-
-# This is a slow operation (~40s on my cpu)
-# Much better than chown -R $USERNAME:$USERNAME /opt/dynamo/venv (~10min on my cpu)
-COPY --from=runtime --chown=$USER_UID:$USER_GID ${VIRTUAL_ENV} ${VIRTUAL_ENV}
-
-# so we can use maturin develop
-RUN uv pip install maturin[patchelf]
-
-# Make sure to sync this with the one specified on README.md.
-# This is a generic PYTHONPATH which works for all the frameworks, so some paths may not be relevant for this particular framework.
-ENV PYTHONPATH=${WORKSPACE_DIR}/components/metrics/src:${WORKSPACE_DIR}/components/frontend/src:${WORKSPACE_DIR}/components/planner/src:${WORKSPACE_DIR}/components/backends/mocker/src:${WORKSPACE_DIR}/components/backends/trtllm/src:${WORKSPACE_DIR}/components/backends/vllm/src:${WORKSPACE_DIR}/components/backends/sglang/src:${WORKSPACE_DIR}/components/backends/llama_cpp/src
-
-# https://code.visualstudio.com/remote/advancedcontainers/persist-bash-history
-RUN SNIPPET="export PROMPT_COMMAND='history -a' && export HISTFILE=$HOME/.commandhistory/.bash_history" \
-    && mkdir -p $HOME/.commandhistory \
-    && touch $HOME/.commandhistory/.bash_history \
-    && echo "$SNIPPET" >> "$HOME/.bashrc"
-
-RUN mkdir -p /home/$USERNAME/.cache/
-
-ENTRYPOINT ["/opt/nvidia/nvidia_entrypoint.sh"]
-CMD []
-
-
 ###########################################################
 ########## Development (run.sh, runs as root user) ########
 ###########################################################
diff --git a/container/README.md b/container/README.md
index 3aeb91e3e7b..2acd6152ac0 100644
--- a/container/README.md
+++ b/container/README.md
@@ -38,8 +38,8 @@ The `build.sh` and `run.sh` scripts are convenience wrappers that simplify commo
 These targets are specified with `build.sh --target <target>` and correspond to Docker multi-stage build targets defined in the Dockerfiles (e.g., `FROM somebase AS <target>`). Some commonly used targets include:
 
 - `runtime` - For running pre-built containers without development tools (minimal size)
-- `dev` - For development with full toolchain (git, vim, build tools, etc.)
-- `local-dev` - For development with user-based permissions matching host UID/GID
+- `dev` - For development (inferencing/benchmarking/etc, runs as root user)
+- `local-dev` - For development with local user permissions matching host UID/GID. This is useful when mounting host partitions (with local user permissions) to Docker partitions.
 
 Additional targets are available in the Dockerfiles for specific build stages and use cases.
 
@@ -73,24 +73,24 @@ Compatibility     │ Legacy workflows,     │ workspace writable on NFS│work
 
 ## Usage Guidelines
 
-- **Use dev + `run.sh`**: `run.sh` script for command-line development by root user
-- **Use local-dev + `run.sh`**: `run.sh` script for command-line development using your local user ID
+- **Use dev + `run.sh`**: for command-line testing. Runs as root user
+- **Use local-dev + `run.sh`**: for command-line development and Docker mounted partitions using your local user ID
 - **Use local-dev + Dev Container**: VS Code/Cursor Dev Container Plugin, using your local user ID
 
 ## Example Commands
 
-### 1. dev + `run.sh`:
+### 1. dev + `run.sh` (runs as root):
 ```bash
-run.sh --mount-workspace ...
+run.sh ...
 ```
 
-### 2. local-dev + `run.sh`:
+### 2. local-dev + `run.sh` (runs as the local user):
 ```bash
 run.sh --mount-workspace --image dynamo:latest-vllm-local-dev ...
 ```
 
-### 3. local-dev + Dev Container:
-Use VS Code/Cursor Dev Container plugin with devcontainer.json configuration
+### 3. local-dev + Dev Container Extension:
+Use VS Code/Cursor Dev Container Extension with devcontainer.json configuration
 
 ## Build and Run Scripts Overview
 
@@ -107,22 +107,22 @@ The `build.sh` script is responsible for building Docker images for different AI
 **Key Features:**
 - **Framework Support**: vLLM (default when --framework not specified), TensorRT-LLM, SGLang, or NONE
 - **Multi-stage Builds**: Build process with base images
-- **Development Targets**: Supports `dev` and `local-dev` targets
+- **Development Targets**: Supports `dev` target and `local-dev` target
 - **Build Caching**: Docker layer caching and sccache support
 - **GPU Optimization**: CUDA, EFA, and NIXL support
 
 **Common Usage Examples:**
 
 ```bash
-# Build vLLM image (default)
+# Build vLLM dev image called dynamo:latest-vllm (default). This runs as root and is fine to use for inferencing/benchmarking, etc.
 ./build.sh
 
-# Build with specific framework
-./build.sh --framework trtllm
-
-# Build local development image
+# Build both development and local-dev images (integrated into build.sh). While the dev image runs as root, the local-dev image will run as the local user, which is useful when mounting partitions. It will also contain development tools.
 ./build.sh --framework vllm --target local-dev
 
+# Build TensorRT-LLM development image called dynamo:latest-trtllm
+./build.sh --framework trtllm
+
 # Build with custom tag
 ./build.sh --framework sglang --tag my-custom-tag
 
@@ -136,6 +136,23 @@ The `build.sh` script is responsible for building Docker images for different AI
 ./build.sh --build-arg CUSTOM_ARG=value
 ```
 
+### build.sh --dev-image - Local Development Image Builder
+
+The `build.sh --dev-image` option takes a dev image and then builds a local-dev image, which contains proper local user permissions. It also includes extra developer utilities (debugging tools, text editors, system monitors, etc.).
+
+**Common Usage Examples:**
+
+```bash
+# Build local-dev image from dev image dynamo:latest-vllm
+./build.sh --dev-image dynamo:latest-vllm --framework vllm
+
+# Build with custom tag from dev image dynamo:latest-vllm
+./build.sh --dev-image dynamo:latest-vllm --framework vllm --tag my-local:dev
+
+# Dry run to see what would be built
+./build.sh --dev-image dynamo:latest-vllm --framework vllm --dry-run
+```
+
 ### run.sh - Container Runtime Manager
 
 The `run.sh` script launches Docker containers with the appropriate configuration for development and inference workloads.
@@ -156,42 +173,39 @@ The `run.sh` script launches Docker containers with the appropriate configuratio
 **Common Usage Examples:**
 
 ```bash
-# Basic container launch
-./run.sh
+# Basic container launch (inference/production)
+./run.sh --image dynamo:latest-vllm
 
-# Mount workspace for development
-./run.sh --mount-workspace
+# Mount workspace for development (use local-dev image for local user permissions)
+./run.sh --image dynamo:latest-vllm-local-dev --mount-workspace
 
-# Use specific image and framework
-./run.sh --image dynamo:latest-vllm --framework vllm
+# Use specific image and framework for development
+./run.sh --image v0.1.0.dev.08cc44965-vllm-local-dev --framework vllm --mount-workspace
 
-# Interactive shell with workspace mounted
-./run.sh --mount-workspace -it -- bash
+# Interactive development shell with workspace mounted
+./run.sh --image dynamo:latest-vllm-local-dev --mount-workspace -it -- bash
 
-# Run with custom environment variables
-./run.sh -e CUDA_VISIBLE_DEVICES=0,1 --mount-workspace
+# Development with custom environment variables
+./run.sh --image dynamo:latest-vllm-local-dev -e CUDA_VISIBLE_DEVICES=0,1 --mount-workspace
 
-# Run without GPU access
-./run.sh --gpus none
+# Production inference without GPU access
+./run.sh --image dynamo:latest-vllm --gpus none
 
 # Dry run to see docker command
 ./run.sh --dry-run
 
-# Run with custom volume mounts
-./run.sh -v /host/path:/container/path --mount-workspace
-
-# Launch with specific container name
-./run.sh --name my-dynamo-container --mount-workspace
+# Development with custom volume mounts
+./run.sh --image dynamo:latest-vllm-local-dev -v /host/path:/container/path --mount-workspace
 ```
 
 ## Workflow Examples
 
 ### Development Workflow
 ```bash
-# 1. Build development image
+# 1. Build local-dev image (creates both dynamo:latest-vllm and dynamo:latest-vllm-local-dev)
 ./build.sh --framework vllm --target local-dev
 
-# 2. Run development container
+# 2. Run development container using the local-dev image
 ./run.sh --image dynamo:latest-vllm-local-dev --mount-workspace -it
 
 # 3. Inside container, run inference (requires both frontend and backend)
@@ -208,7 +222,7 @@ python -m dynamo.vllm --model Qwen/Qwen3-0.6B --gpu-memory-utilization 0.50 &
 ./build.sh --framework vllm --release-build
 
 # 2. Run production container
-./run.sh --image dynamo:latest-vllm --gpus all
+./run.sh --image dynamo:latest-vllm-local-dev --gpus all
 ```
 
 ### Testing Workflow
@@ -216,6 +230,6 @@ python -m dynamo.vllm --model Qwen/Qwen3-0.6B --gpu-memory-utilization 0.50 &
 # 1. Build with no cache for clean build
 ./build.sh --framework vllm --no-cache
 
-# 2. Test container functionality
+# 2. Test container functionality (--image defaults to dynamo:latest-vllm)
 ./run.sh --mount-workspace -it -- python -m pytest tests/
 ```
diff --git a/container/build.sh b/container/build.sh
index a095db4c9aa..2ec001bfb9b 100755
--- a/container/build.sh
+++ b/container/build.sh
@@ -204,6 +204,7 @@ get_options() {
             fi
             ;;
         --base-image)
+            # Note: --base-image cannot be used with --dev-image
             if [ "$2" ]; then
                 BASE_IMAGE=$2
                 shift
@@ -227,6 +228,30 @@ get_options() {
                 missing_requirement "$1"
             fi
             ;;
+        --dev-image)
+            if [ "$2" ]; then
+                DEV_IMAGE_INPUT=$2
+                shift
+            else
+                missing_requirement "$1"
+            fi
+            ;;
+        --uid)
+            if [ "$2" ]; then
+                CUSTOM_UID=$2
+                shift
+            else
+                missing_requirement "$1"
+            fi
+            ;;
+        --gid)
+            if [ "$2" ]; then
+                CUSTOM_GID=$2
+                shift
+            else
+                missing_requirement "$1"
+            fi
+            ;;
         --build-arg)
             if [ "$2" ]; then
                 BUILD_ARGS+="--build-arg $2 "
@@ -320,6 +345,23 @@ get_options() {
         shift
     done
 
+    # Validate argument combinations
+    if [[ -n "${DEV_IMAGE_INPUT:-}" && -n "${BASE_IMAGE:-}" ]]; then
+        error "ERROR: --dev-image cannot be used with --base-image. Use --dev-image to build from existing images or --base-image to build new images."
+    fi
+
+    # Validate that --target and --dev-image cannot be used together
+    if [[ -n "${DEV_IMAGE_INPUT:-}" && -n "${TARGET:-}" ]]; then
+        error "ERROR: --target cannot be used with --dev-image. Use --target to build from scratch or --dev-image to build from existing images."
+    fi
+
+    # Validate that --uid and --gid are only used with local-dev related options
+    if [[ -n "${CUSTOM_UID:-}" || -n "${CUSTOM_GID:-}" ]]; then
+        if [[ -z "${DEV_IMAGE_INPUT:-}" && "${TARGET:-}" != "local-dev" ]]; then
+            error "ERROR: --uid and --gid can only be used with --dev-image or --target local-dev"
+        fi
+    fi
+
     if [ -z "$FRAMEWORK" ]; then
         FRAMEWORK=$DEFAULT_FRAMEWORK
     fi
@@ -352,7 +394,7 @@ get_options() {
 
     if [ -z "$TAG" ]; then
         TAG="--tag dynamo:${VERSION}-${FRAMEWORK,,}"
-        if [ -n "${TARGET}" ]; then
+        if [ -n "${TARGET}" ] && [ "${TARGET}" != "local-dev" ]; then
             TAG="${TAG}-${TARGET}"
         fi
     fi
@@ -419,6 +461,9 @@ show_help() {
     echo "  [--cache-from cache location to start from]"
     echo "  [--cache-to location where to cache the build output]"
     echo "  [--tag tag for image]"
+    echo "  [--dev-image dev image to build local-dev from]"
+    echo "  [--uid user ID for local-dev images (only with --dev-image or --target local-dev)]"
+    echo "  [--gid group ID for local-dev images (only with --dev-image or --target local-dev)]"
     echo "  [--no-cache disable docker build cache]"
     echo "  [--dry-run print docker commands without running]"
     echo "  [--build-context name=path to add build context]"
@@ -468,8 +513,73 @@ fi
 # Add NIXL_REF as a build argument
 BUILD_ARGS+=" --build-arg NIXL_REF=${NIXL_REF} "
 
+# Function to build local-dev image with header
+build_local_dev_with_header() {
+    local dev_base_image="$1"
+    local tags="$2"
+    local success_msg="$3"
+    local header_title="$4"
+
+    echo "======================================"
+    echo "$header_title"
+    echo "======================================"
+
+    # Get user info right before using it
+    USER_UID=${CUSTOM_UID:-$(id -u)}
+    USER_GID=${CUSTOM_GID:-$(id -g)}
+
+    # Set up dockerfile path
+    DOCKERFILE_LOCAL_DEV="${SOURCE_DIR}/Dockerfile.local_dev"
+
+    if [[ ! -f "$DOCKERFILE_LOCAL_DEV" ]]; then
+        echo "ERROR: Dockerfile.local_dev not found at: $DOCKERFILE_LOCAL_DEV"
+        exit 1
+    fi
+
+    echo "Building new local-dev image from: $dev_base_image"
+    echo "User 'ubuntu' will have UID: $USER_UID, GID: $USER_GID"
+
+    # Show the docker command being executed if not in dry-run mode
+    if [ -z "$RUN_PREFIX" ]; then
+        set -x
+    fi
+
+    $RUN_PREFIX docker build \
+        --build-arg DEV_BASE="$dev_base_image" \
+        --build-arg USER_UID="$USER_UID" \
+        --build-arg USER_GID="$USER_GID" \
+        --build-arg ARCH="$ARCH" \
+        --file "$DOCKERFILE_LOCAL_DEV" \
+        $tags \
+        "$SOURCE_DIR" || {
+        { set +x; } 2>/dev/null
+        echo "ERROR: Failed to build local_dev image"
+        exit 1
+    }
+
+    { set +x; } 2>/dev/null
+    echo "$success_msg"
+
+    # Show usage instructions
+    echo ""
+    echo "To run the local-dev image as the local user ($USER_UID/$USER_GID):"
+    # Extract the last tag from the tags string
+    last_tag=$(echo "$tags" | grep -o -- '--tag [^ ]*' | tail -1 | cut -d' ' -f2)
+    # Calculate relative path to run.sh from current working directory
+    # Get the directory where build.sh is located
+    build_dir="$(dirname "${BASH_SOURCE[0]}")"
+    # Get the absolute path to run.sh (in the same directory as build.sh)
+    run_abs_path="$(realpath "$build_dir/run.sh")"
+    # Calculate relative path from current PWD to run.sh
+    run_path="$(python3 -c "import os; print(os.path.relpath('$run_abs_path', '$PWD'))")"
+    echo "  $run_path --image $last_tag --mount-workspace ..."
+}
+
+
+# Handle local-dev target
 if [[ $TARGET == "local-dev" ]]; then
-    BUILD_ARGS+=" --build-arg USER_UID=$(id -u) --build-arg USER_GID=$(id -g) "
+    LOCAL_DEV_BUILD=true
+    TARGET_STR="--target dev"
 fi
 
 # BUILD DEV IMAGE
@@ -607,7 +717,7 @@ if [ "$USE_SCCACHE" = true ]; then
 fi
 
 LATEST_TAG="--tag dynamo:latest-${FRAMEWORK,,}"
-if [ -n "${TARGET}" ]; then
+if [ -n "${TARGET}" ] && [ "${TARGET}" != "local-dev" ]; then
     LATEST_TAG="${LATEST_TAG}-${TARGET}"
 fi
 
@@ -617,24 +727,69 @@ if [ -z "$RUN_PREFIX" ]; then
     set -x
 fi
 
-# TODO: Follow 2-step build process for all frameworks once necessary changes are made to the sglang and TRT-LLM backend Dockerfiles.
-if [[ $FRAMEWORK == "VLLM" ]] || [[ $FRAMEWORK == "SGLANG" ]]; then
-    # Define base image tag before using it
-    DYNAMO_BASE_IMAGE="dynamo-base:${VERSION}"
-    # Start base image build
-    echo "======================================"
-    echo "Starting Build 1: Base Image"
-    echo "======================================"
-    $RUN_PREFIX docker build -f "${SOURCE_DIR}/Dockerfile" --target dev $PLATFORM $BUILD_ARGS $CACHE_FROM $CACHE_TO --tag $DYNAMO_BASE_IMAGE $BUILD_CONTEXT_ARG $BUILD_CONTEXT $NO_CACHE
-    # Start framework build
-    echo "======================================"
-    echo "Starting Build 2: Framework Image"
-    echo "======================================"
-    BUILD_ARGS+=" --build-arg DYNAMO_BASE_IMAGE=${DYNAMO_BASE_IMAGE}"
-    $RUN_PREFIX docker build -f $DOCKERFILE $TARGET_STR $PLATFORM $BUILD_ARGS $CACHE_FROM $CACHE_TO $TAG $LATEST_TAG $BUILD_CONTEXT_ARG $BUILD_CONTEXT $NO_CACHE
-else
-    $RUN_PREFIX docker build -f $DOCKERFILE $TARGET_STR $PLATFORM $BUILD_ARGS $CACHE_FROM $CACHE_TO $TAG $LATEST_TAG $BUILD_CONTEXT_ARG $BUILD_CONTEXT $NO_CACHE
+
+# Skip Build 1 and Build 2 if DEV_IMAGE_INPUT is set (we'll handle it at the bottom)
+if [[ -z "${DEV_IMAGE_INPUT:-}" ]]; then
+    # TODO: Follow 2-step build process for all frameworks once necessary changes are made to the sglang and TRT-LLM backend Dockerfiles.
+    if [[ $FRAMEWORK == "VLLM" ]] || [[ $FRAMEWORK == "SGLANG" ]]; then
+        # Define base image tag before using it
+        DYNAMO_BASE_IMAGE="dynamo-base:${VERSION}"
+        # Start base image build
+        echo "======================================"
+        echo "Starting Build 1: Base Image"
+        echo "======================================"
+        $RUN_PREFIX docker build -f "${SOURCE_DIR}/Dockerfile" --target dev $PLATFORM $BUILD_ARGS $CACHE_FROM $CACHE_TO --tag $DYNAMO_BASE_IMAGE $BUILD_CONTEXT_ARG $BUILD_CONTEXT $NO_CACHE
+        # Start framework build
+        echo "======================================"
+        echo "Starting Build 2: Framework Image"
+        echo "======================================"
+        BUILD_ARGS+=" --build-arg DYNAMO_BASE_IMAGE=${DYNAMO_BASE_IMAGE}"
+        $RUN_PREFIX docker build -f $DOCKERFILE $TARGET_STR $PLATFORM $BUILD_ARGS $CACHE_FROM $CACHE_TO $TAG $LATEST_TAG $BUILD_CONTEXT_ARG $BUILD_CONTEXT $NO_CACHE
+    else
+        $RUN_PREFIX docker build -f $DOCKERFILE $TARGET_STR $PLATFORM $BUILD_ARGS $CACHE_FROM $CACHE_TO $TAG $LATEST_TAG $BUILD_CONTEXT_ARG $BUILD_CONTEXT $NO_CACHE
+    fi
 fi
 
+# Handle --dev-image option (build local-dev from existing dev image)
+if [[ -n "${DEV_IMAGE_INPUT:-}" ]]; then
+    # Validate that the dev image is not already a local-dev image
+    if [[ "$DEV_IMAGE_INPUT" == *"-local-dev" ]]; then
+        echo "ERROR: Cannot use local-dev image as dev image input: '$DEV_IMAGE_INPUT'"
+        exit 1
+    fi
+
+    # Build tag arguments - always add -local-dev suffix for --dev-image
+    # Generate local-dev tag from input image
+    if [[ "$DEV_IMAGE_INPUT" == *:* ]]; then
+        LOCAL_DEV_TAG="--tag ${DEV_IMAGE_INPUT}-local-dev"
+    else
+        LOCAL_DEV_TAG="--tag ${DEV_IMAGE_INPUT}:latest-local-dev"
+    fi
+
+    build_local_dev_with_header "$DEV_IMAGE_INPUT" "$LOCAL_DEV_TAG" "Successfully built local-dev image: ${LOCAL_DEV_TAG#--tag }" "Building Local-Dev Image"
+elif [[ "${LOCAL_DEV_BUILD:-}" == "true" ]]; then
+    # Use the first tag name (TAG) if available, otherwise use latest
+    if [[ -n "$TAG" ]]; then
+        DEV_IMAGE=$(echo "$TAG" | sed 's/--tag //' | sed 's/-local-dev$//')
+    else
+        DEV_IMAGE="dynamo:latest-${FRAMEWORK,,}"
+    fi
+
+    # Build local-dev tags from existing tags
+    LOCAL_DEV_TAGS=""
+    if [[ -n "$TAG" ]]; then
+        # Extract tag name, remove any existing -local-dev suffix, then add -local-dev
+        TAG_NAME=$(echo "$TAG" | sed 's/--tag //' | sed 's/-local-dev$//')
+        LOCAL_DEV_TAGS+=" --tag ${TAG_NAME}-local-dev"
+    fi
+
+    if [[ -n "$LATEST_TAG" ]]; then
+        # Extract tag name, remove any existing -local-dev suffix, then add -local-dev
+        LATEST_TAG_NAME=$(echo "$LATEST_TAG" | sed 's/--tag //' | sed 's/-local-dev$//')
+        LOCAL_DEV_TAGS+=" --tag ${LATEST_TAG_NAME}-local-dev"
+    fi
+
+    build_local_dev_with_header "$DEV_IMAGE" "$LOCAL_DEV_TAGS" "Successfully built local-dev images" "Starting Build 3: Local-Dev Image"
+fi
 
 { set +x; } 2>/dev/null