diff --git a/src/instance/manager.ts b/src/instance/manager.ts
index 908a8a1..660d619 100644
--- a/src/instance/manager.ts
+++ b/src/instance/manager.ts
@@ -264,6 +264,11 @@ export class InstanceManager {
 
       console.log('PostgreSQL is ready, creating database and user...');
 
+      // First, set a password for the postgres superuser
+      console.log('Setting password for postgres superuser...');
+      const postgresPassword = this.generateSecurePassword();
+      await this.execAsyncWithLogging(`${psqlPath} -h "${socketDirectory}" -p ${config.spec.network.port} -U postgres -d postgres -c "ALTER USER postgres PASSWORD '${postgresPassword}'"`);
+
       // Create the database
       console.log(`Creating database: ${config.spec.database.name}`);
       await this.execAsyncWithLogging(`${psqlPath} -h "${socketDirectory}" -p ${config.spec.network.port} -U postgres -d postgres -c "CREATE DATABASE \\"${config.spec.database.name}\\""`);
@@ -444,7 +449,7 @@ export class InstanceManager {
     const command = [
       initdbPath,
       '-D', config.spec.storage.dataDirectory,
-      '--auth-local=peer',
+      '--auth-local=trust',
       '--auth-host=md5',
       `--encoding=${config.spec.database.encoding}`,
       `--locale=${config.spec.database.locale}`,
@@ -644,8 +649,8 @@ export class InstanceManager {
       '# pg_hba.conf generated by PgForge',
       '# TYPE  DATABASE        USER            ADDRESS                 METHOD',
       '',
-      '# Local connections',
-      'local   all             all                                     peer',
+      '# Local connections - use md5 for password authentication',
+      'local   all             all                                     md5',
       '',
       '# IPv4 connections',
     ];