diff --git a/services/docker-compose.tests.yml b/services/docker-compose.tests.yml
--- a/services/docker-compose.tests.yml
+++ b/services/docker-compose.tests.yml
@@ -75,6 +75,9 @@
       args:
         - generate_keypair=true
 
+  localstack:
+    environment:
+      - PERSISTENCE=0
   rabbitmq:
     healthcheck:
       test: rabbitmq-diagnostics -q ping
diff --git a/services/docker-compose.yml b/services/docker-compose.yml
--- a/services/docker-compose.yml
+++ b/services/docker-compose.yml
@@ -92,10 +92,10 @@
       - '4566:4566'
     environment:
       - SERVICES=s3,dynamodb
-      - DATA_DIR=/tmp/localstack
-      - HOSTNAME_EXTERNAL=localstack
+      - LOCALSTACK_HOST=localstack:4566
+      - PERSISTENCE=1
     volumes:
-      - localstack:/tmp/localstack
+      - localstack:/var/lib/localstack
   # RabbitMQ
   rabbitmq:
     # This version matches AWS MQ version (set in Terraform)