diff --git a/packages/cli/package.json b/packages/cli/package.json
index bb33dbf5c..1625a3049 100644
--- a/packages/cli/package.json
+++ b/packages/cli/package.json
@@ -16,7 +16,7 @@
     "lint": "eslint --ext .ts src",
     "lint:report": "pnpm lint -- --format json --output-file report.json",
     "prepack": "pnpm build",
-    "dev": "ts-node src/index.ts"
+    "dev": "ts-node --files src/index.ts"
   },
   "engines": {
     "node": ">=16.0.0"
@@ -38,6 +38,7 @@
   "dependencies": {
     "@logto/schemas": "^0.1.0",
     "decamelize": "^5.0.0",
+    "dotenv": "^10.0.0",
     "roarr": "^7.11.0",
     "slonik": "^28.1.0",
     "slonik-interceptor-preset": "^1.2.10",
diff --git a/packages/cli/src/database.ts b/packages/cli/src/database.ts
index 0880f1c76..0f323f53c 100644
--- a/packages/cli/src/database.ts
+++ b/packages/cli/src/database.ts
@@ -2,7 +2,7 @@ import { readdir, readFile } from 'fs/promises';
 import path from 'path';
 
 import { seeds } from '@logto/schemas';
-import { createPool, sql } from 'slonik';
+import { createPool, parseDsn, sql, stringifyDsn } from 'slonik';
 import { createInterceptors } from 'slonik-interceptor-preset';
 import { raw } from 'slonik-sql-tag-raw';
 
@@ -11,9 +11,33 @@ import { insertInto } from './utilities';
 const { managementResource, defaultSignInExperience, createDefaultSetting } = seeds;
 const tableDirectory = 'node_modules/@logto/schemas/tables';
 const domain = 'http://localhost:3001';
+const defaultDatabase = 'logto_test';
 
-export const createDatabaseCli = (uri: string) => {
-  const pool = createPool(uri, { interceptors: createInterceptors() });
+/**
+ * Create a database.
+ * @returns DSN with the created database name.
+ */
+export const createDatabase = async (
+  dsn: string,
+  databaseName = defaultDatabase
+): Promise<string> => {
+  const { databaseName: _, ...restDsn } = parseDsn(dsn);
+  const pool = createPool(dsn);
+
+  await pool.query(sql`
+    create database ${sql.identifier([databaseName])}
+      with
+      encoding = 'UTF8'
+      lc_collate = 'C'
+      lc_ctype = 'en_US.utf8'
+      connection_limit = -1;
+  `);
+
+  return stringifyDsn({ ...restDsn, databaseName });
+};
+
+export const createDatabaseCli = (dsn: string) => {
+  const pool = createPool(dsn, { interceptors: createInterceptors() });
 
   const createTables = async () => {
     const directory = await readdir(tableDirectory);
@@ -46,5 +70,4 @@ export const createDatabaseCli = (uri: string) => {
 };
 
 // For testing purpose, will remove later
-const cli = createDatabaseCli(process.env.DSN ?? '');
-void cli.seedTables();
+void createDatabase(process.env.DSN ?? '');
diff --git a/packages/cli/src/index.ts b/packages/cli/src/index.ts
index 9cd8c5a53..83e6e368c 100644
--- a/packages/cli/src/index.ts
+++ b/packages/cli/src/index.ts
@@ -1 +1,5 @@
+import dotenv from 'dotenv';
+
+dotenv.config();
+
 export * from './database';
diff --git a/pnpm-lock.yaml b/pnpm-lock.yaml
index cc0087c52..afbf0fa80 100644
--- a/pnpm-lock.yaml
+++ b/pnpm-lock.yaml
@@ -25,6 +25,7 @@ importers:
       '@silverhand/ts-config': ^0.10.2
       '@types/node': '14'
       decamelize: ^5.0.0
+      dotenv: ^10.0.0
       eslint: ^8.10.0
       lint-staged: ^11.1.1
       prettier: ^2.3.2
@@ -37,6 +38,7 @@ importers:
     dependencies:
       '@logto/schemas': link:../schemas
       decamelize: 5.0.1
+      dotenv: 10.0.0
       roarr: 7.11.0
       slonik: 28.1.0
       slonik-interceptor-preset: 1.2.10