diff --git a/Dockerfile b/Dockerfile
index 98942af4..852a9a3c 100644
--- a/Dockerfile
+++ b/Dockerfile
@@ -16,8 +16,16 @@ FROM --platform=$BUILDPLATFORM alpine as user
 RUN adduser -S -u 10000 lantern
 
 FROM alpine
+RUN apk add --no-cache iptables su-exec
+
 COPY --from=user /etc/passwd /etc/passwd
 COPY --from=builder /usr/local/bin/http-proxy /usr/local/bin/http-proxy
 
-USER lantern
+COPY servermasq.sh /servermasq.sh
+RUN chmod +x /servermasq.sh
+
+# Run as root because iptables in the servermasq.sh script needs root privileges
+# the script itself will switch to the lantern user before executing the http-proxy binary 
+USER root 
+ENTRYPOINT ["/servermasq.sh"]
 CMD ["/usr/local/bin/http-proxy"]
diff --git a/servermasq.sh b/servermasq.sh
new file mode 100644
index 00000000..fb56c582
--- /dev/null
+++ b/servermasq.sh
@@ -0,0 +1,49 @@
+#!/bin/sh
+set -e
+
+echo "[+] Setting up LANTERN_SERVERMASQ iptables chain..."
+
+PROXY_ADDR=$(hostname -i | awk '{print $1}')
+
+if [ -z "$PROXY_ADDR" ] || [ -z "$PROXY_PORT" ] || [ -z "$MASQ_ADDR" ]; then
+  echo "[~] Required environment variables not set, skipping iptables setup"
+  exec "$@"
+fi
+
+# The iptables rules can be explained as follows:
+# 1. Create a new chain called LANTERN_SERVERMASQ.
+# 2. Add a rule to the LANTERN_SERVERMASQ chain that matches packets destined for the proxy address
+#     (PROXY_ADDR) that are not destined for the proxy port (PROXY_PORT), and redirects them to the MASQ_ADDR.
+#      It is important to understand the context in which this docker container is running and this determines the
+#      value of PROXY_ADDR. PROXY_ADDR is the container's internal IP address. See flow of traffic below:
+
+# [ External Client (public internet) ]
+#                  |
+#                  v
+#        [ Public IP of cloud provider ]
+#                  |
+#          (NAT to private IP)
+#                  |
+#                  v
+#      [ VM Private IP (e.g., 10.52.x.x) ]
+#                  |
+#         (Host port → Container port binding)
+#                  |
+#          (Docker NAT to container IP)
+#                  |
+#                  v
+#   [ Docker Container IP (e.g., 172.17.x.x) ]
+
+#  3. Add a rule to the PREROUTING chain that matches packets destined for the proxy address (PROXY_ADDR)
+#     and redirects them to the LANTERN_SERVERMASQ chain.
+#  4. Add a rule to the POSTROUTING chain that matches packets destined for the MASQ_ADDR and masquerades them in order for responses to be sent back correctly to container.
+
+iptables -t nat -N LANTERN_SERVERMASQ 2>/dev/null || true
+iptables -t nat -F LANTERN_SERVERMASQ 2>/dev/null || true
+
+iptables -t nat -A LANTERN_SERVERMASQ -d "$PROXY_ADDR" -p tcp ! --dport "$PROXY_PORT" -j DNAT --to-destination "$MASQ_ADDR"
+iptables -t nat -A PREROUTING -d "$PROXY_ADDR" -j LANTERN_SERVERMASQ
+iptables -t nat -A POSTROUTING -d "$MASQ_ADDR" -j MASQUERADE
+
+echo "[+] LANTERN_SERVERMASQ setup complete: $@"
+exec su-exec lantern "$@"
\ No newline at end of file