diff --git a/.env.example b/.env.example
index ba32691348196..599b1fb603392 100644
--- a/.env.example
+++ b/.env.example
@@ -1,6 +1,12 @@
-REDIS_URL=redis://redis:6379
 SECRET_KEY_BASE=
 
+#redis config
+REDIS_URL=redis://redis:6379
+# If you are using docker-compose, set this variable's value to be any string,
+# which will be the password for the redis service running inside the docker-compose
+# to make it secure
+REDIS_PASSWORD=
+
 # Postgres Database config variables
 POSTGRES_HOST=postgres
 POSTGRES_USERNAME=postgres
diff --git a/config/cable.yml b/config/cable.yml
index 6e89df27505a8..4c30fcd13bcde 100644
--- a/config/cable.yml
+++ b/config/cable.yml
@@ -1,6 +1,7 @@
 development:
   adapter: redis
   url: <%= ENV.fetch('REDIS_URL', 'redis://127.0.0.1:6379') %>
+  password: <%= ENV.fetch('REDIS_PASSWORD', nil) %>
 
 test:
   adapter: test
@@ -8,7 +9,9 @@ test:
 staging:
   adapter: redis
   url: <%= ENV.fetch('REDIS_URL', 'redis://127.0.0.1:6379') %>
+  password: <%= ENV.fetch('REDIS_PASSWORD', nil) %>
 
 production:
   adapter: redis
   url: <%= ENV.fetch('REDIS_URL', 'redis://127.0.0.1:6379') %>
+  password: <%= ENV.fetch('REDIS_PASSWORD', nil) %>
diff --git a/config/initializers/redis.rb b/config/initializers/redis.rb
index d9e22832e6b85..7b2ec56e441f0 100644
--- a/config/initializers/redis.rb
+++ b/config/initializers/redis.rb
@@ -1,5 +1,8 @@
-uri = URI.parse(ENV.fetch('REDIS_URL', 'redis://127.0.0.1:6379'))
-redis = Rails.env.test? ? MockRedis.new : Redis.new(url: uri)
+app_redis_config = {
+    url: URI.parse(ENV.fetch('REDIS_URL', 'redis://127.0.0.1:6379')),
+    password: ENV.fetch('REDIS_PASSWORD', nil)
+}
+redis = Rails.env.test? ? MockRedis.new : Redis.new(app_redis_config)
 Nightfury.redis = Redis::Namespace.new('reports', redis: redis)
 
 # Alfred - Used currently for round robin and conversation emails.
diff --git a/config/initializers/sidekiq.rb b/config/initializers/sidekiq.rb
new file mode 100644
index 0000000000000..748b1e60c82e5
--- /dev/null
+++ b/config/initializers/sidekiq.rb
@@ -0,0 +1,11 @@
+sidekiq_redis_config = {
+    url: ENV.fetch('REDIS_URL', 'redis://127.0.0.1:6379'),
+    password: ENV.fetch('REDIS_PASSWORD', nil)
+}
+Sidekiq.configure_client do |config|
+    config.redis = sidekiq_redis_config
+end
+
+Sidekiq.configure_server do |config|
+    config.redis = sidekiq_redis_config
+end
diff --git a/docker-compose.yaml b/docker-compose.yaml
index d3d97172257a5..ce00d4d4e52e3 100644
--- a/docker-compose.yaml
+++ b/docker-compose.yaml
@@ -53,7 +53,7 @@ services:
       - cache:/app/tmp/cache
     ports:
       - "3035" # Webpack dev server
-    env_file: .env.example
+    env_file: .env
     environment:
       - WEBPACKER_DEV_SERVER_HOST=0.0.0.0
       - NODE_ENV=development
@@ -76,6 +76,8 @@ services:
   redis:
     image: redis:alpine
     restart: always
+    command: ["sh", "-c", "redis-server --requirepass \"$REDIS_PASSWORD\""]
+    env_file: .env
     volumes:
       - redis:/data/redis
     ports:
diff --git a/docs/development/environment-setup/docker.md b/docs/development/environment-setup/docker.md
index 5d5eb0f0c8e02..98072e832f643 100644
--- a/docs/development/environment-setup/docker.md
+++ b/docs/development/environment-setup/docker.md
@@ -11,7 +11,8 @@ After cloning the repo and installing docker on your machine, run the following
 cp .env.example .env
 ```
 
-Make changes to the `.env` file as required. [Optional]
+Make changes to the `.env` file as required [Optional]. If you want to set the password for redis when you run
+docker-compose, set any string value to the environment variable `REDIS_PASSWORD` in the `.env` file. which will secure the redis running inside docker-compose with this password. This will be automatically picked up by app server and sidekiq, to authenticate while making connections to redis server.
 
 ```bash
 docker-compose build
diff --git a/docs/development/project-setup/environment-variables.md b/docs/development/project-setup/environment-variables.md
index fe46157a112de..0e17c9ba436eb 100644
--- a/docs/development/project-setup/environment-variables.md
+++ b/docs/development/project-setup/environment-variables.md
@@ -59,7 +59,7 @@ But you can change it to use any of the cloud providers like amazon s3, microsof
 ACTIVE_STORAGE_SERVICE='local'
 ```
 
-### Configure Redis URL
+### Configure Redis
 
 For development, you can use the following url to connect to redis.
 
@@ -67,6 +67,13 @@ For development, you can use the following url to connect to redis.
 REDIS_URL='redis:://127.0.0.1:6379'
 ```
 
+To authenticate redis connections made by app server and sidekiq, if it's protected by a password, use the following
+environment variable to set the password.
+
+```bash
+REDIS_PASSWORD=
+```
+
 ### Configure Postgres host
 
 You can set the following environment variable to set the host for postgres.