diff --git a/cmd/ftl-proxy-pg/main.go b/cmd/ftl-proxy-pg/main.go
index 81e2eeee8f..1bf84fbd51 100644
--- a/cmd/ftl-proxy-pg/main.go
+++ b/cmd/ftl-proxy-pg/main.go
@@ -39,7 +39,7 @@ func main() {
 	kctx.FatalIfErrorf(err, "failed to initialize observability")
 
 	proxy := pgproxy.New(cli.Config.Listen, func(ctx context.Context, params map[string]string) (string, error) {
-		return "postgres://127.0.0.1:15432/database_testdb?sslmode=disable&user=postgres&password=secret", nil
+		return "postgres://localhost:5432/postgres?user=" + params["user"], nil
 	})
 	if err := proxy.Start(ctx, nil); err != nil {
 		kctx.FatalIfErrorf(err, "failed to start proxy")
diff --git a/go-runtime/server/database.go b/go-runtime/server/database.go
index 4238e925af..b8f0415aa5 100644
--- a/go-runtime/server/database.go
+++ b/go-runtime/server/database.go
@@ -4,7 +4,6 @@ import (
 	"context"
 	"database/sql"
 	"fmt"
-	"os"
 	"reflect"
 	"time"
 
@@ -48,18 +47,10 @@ func InitDatabase(ref reflection.Ref, dbtype string, protoDBtype modulecontext.D
 		DBType: dbtype,
 		DB: once.Once(func(ctx context.Context) (*sql.DB, error) {
 			logger := log.FromContext(ctx)
-			var dsn string
 			provider := modulecontext.FromContext(ctx).CurrentContext()
-			d, _, err := provider.GetDatabase(ref.Name, protoDBtype)
+			dsn, testDb, err := provider.GetDatabase(ref.Name, protoDBtype)
 			if err != nil {
-				if protoDBtype == modulecontext.DBTypePostgres {
-					proxyAddress := os.Getenv("PG_PROXY_ADDRESS")
-					dsn = "postgres://" + proxyAddress + "/" + ref.Name
-				} else {
-					return nil, fmt.Errorf("failed to get database %q: %w", ref.Name, err)
-				}
-			} else {
-				dsn = d
+				return nil, fmt.Errorf("failed to get database %q: %w", ref.Name, err)
 			}
 
 			logger.Debugf("Opening database: %s", ref.Name)
@@ -79,7 +70,7 @@ func InitDatabase(ref reflection.Ref, dbtype string, protoDBtype modulecontext.D
 				return nil, fmt.Errorf("failed to register database metrics: %w", err)
 			}
 			db.SetConnMaxIdleTime(time.Minute)
-			if os.Getenv("FTL_INTEGRATION_TEST") == "true" {
+			if testDb {
 				// In tests we always close the connections, as the DB being clean might invalidate pooled connections
 				db.SetMaxIdleConns(0)
 			} else {
diff --git a/internal/integration/harness.go b/internal/integration/harness.go
index 5c97ae0f2c..2dde020f5b 100644
--- a/internal/integration/harness.go
+++ b/internal/integration/harness.go
@@ -218,7 +218,6 @@ func run(t *testing.T, actionsOrOptions ...ActionOrOption) {
 	for key, value := range opts.envars {
 		t.Setenv(key, value)
 	}
-	t.Setenv("FTL_INTEGRATION_TEST", "true")
 
 	cwd, err := os.Getwd()
 	assert.NoError(t, err)
diff --git a/internal/modulecontext/module_context.go b/internal/modulecontext/module_context.go
index ef1e91144c..6327f1fe8c 100644
--- a/internal/modulecontext/module_context.go
+++ b/internal/modulecontext/module_context.go
@@ -159,6 +159,7 @@ func (m ModuleContext) GetSecret(name string, value any) error {
 // if the database is not a test database.
 func (m ModuleContext) GetDatabase(name string, dbType DBType) (string, bool, error) {
 	db, ok := m.databases[name]
+	// TODO: Remove databases from the context once we have a way to inject test dbs in some other way
 	if !ok {
 		if dbType == DBTypePostgres {
 			proxyAddress := os.Getenv("PG_PROXY_ADDRESS")