diff --git a/backend/.env.example b/backend/.env.example
index cf230d4..42558be 100644
--- a/backend/.env.example
+++ b/backend/.env.example
@@ -1,6 +1,17 @@
 LLM_BASE_URL=https://openrouter.ai/api/v1
 LLM_API_KEY=your_openrouter_key_here
 LLM_MODEL_NAME=qwen/qwen3.5-35b-a3b
+LLM_TIMEOUT=60.0
+
 EMBEDDING_MODEL=qwen/qwen3-embedding-4b
 EMBEDDING_BASE_URL=https://openrouter.ai/api/v1
+EMBEDDING_API_KEY=
+
 CHROMA_DB_PATH=./chroma_db
+
+CHUNK_SIZE=1000
+CHUNK_OVERLAP=200
+RETRIEVAL_N_RESULTS=10
+RELEVANCE_THRESHOLD=7.0
+
+CORS_ORIGINS=["http://localhost:5173","http://localhost:3000"]
diff --git a/backend/app/core/config.py b/backend/app/core/config.py
index e8c93c6..458cc14 100644
--- a/backend/app/core/config.py
+++ b/backend/app/core/config.py
@@ -5,13 +5,29 @@ from pydantic_settings import BaseSettings
 
 
 class Settings(BaseSettings):
+    # LLM access
     llm_base_url: str = "https://openrouter.ai/api/v1"
     llm_api_key: str = ""
     llm_model_name: str = "qwen/qwen3.5-35b-a3b"
+
+    # Embeddings
     embedding_model: str = "qwen/qwen3-embedding-4b"
     embedding_base_url: str = "https://openrouter.ai/api/v1"
+    embedding_api_key: str = ""
+
+    # ChromaDB
     chroma_db_path: str = "./chroma_db"
 
+    # App configuration moved to settings for easier testing/configuration
+    # Cross-origin settings and chunking parameters (Phase 1 plan)
+    cors_origins: list[str] = ["http://localhost:5173", "http://localhost:3000"]
+    chunk_size: int = 1000
+    chunk_overlap: int = 200
+    retrieval_n_results: int = 10
+    relevance_threshold: float = 7.0
+    llm_timeout: float = 60.0
+
+    # Development helpers
     model_config = {"env_file": ".env", "env_file_encoding": "utf-8"}
 
 
diff --git a/backend/pytest.ini b/backend/pytest.ini
index daf5832..5d6f170 100644
--- a/backend/pytest.ini
+++ b/backend/pytest.ini
@@ -1,5 +1,5 @@
 [pytest]
+asyncio_mode = auto
 markers =
     acceptance: Acceptance tests with real external services (LLM, ASR, ChromaDB)
     slow: Tests that take longer than 1 second
-    asyncio_mode = auto