diff --git a/packages/create-plugin/templates/common/.config/Dockerfile b/packages/create-plugin/templates/common/.config/Dockerfile
index 77d64e74cd..9b1e370ada 100644
--- a/packages/create-plugin/templates/common/.config/Dockerfile
+++ b/packages/create-plugin/templates/common/.config/Dockerfile
@@ -19,8 +19,7 @@ ENV DEV "${development}"
 ENV GF_AUTH_ANONYMOUS_ORG_ROLE "Admin"
 ENV GF_AUTH_ANONYMOUS_ENABLED "${anonymous_auth_enabled}"
 ENV GF_AUTH_BASIC_ENABLED "false"
-# Set development mode so plugins can be loaded without the need to sign
-ENV GF_DEFAULT_APP_MODE "development"
+# GF_DEFAULT_APP_MODE is set dynamically in entrypoint.sh based on the DEV build arg
 
 
 LABEL maintainer="Grafana Labs <hello@grafana.com>"
diff --git a/packages/create-plugin/templates/common/.config/entrypoint.sh b/packages/create-plugin/templates/common/.config/entrypoint.sh
index 00c69f246f..c92c9eeff7 100644
--- a/packages/create-plugin/templates/common/.config/entrypoint.sh
+++ b/packages/create-plugin/templates/common/.config/entrypoint.sh
@@ -1,5 +1,10 @@
 #!/bin/sh
 
+# Default to development mode; switch to production when DEV=false
+if [ "${DEV}" = "false" ]; then
+    export GF_DEFAULT_APP_MODE="production"
+fi
+
 if [ "${DEV}" = "false" ]; then
     echo "Starting test mode"
     exec /run.sh