diff --git a/containers/azure-machine-learning-python-3/.devcontainer/Dockerfile b/containers/azure-machine-learning-python-3/.devcontainer/Dockerfile
index dbcc825d54..5effa0beb1 100644
--- a/containers/azure-machine-learning-python-3/.devcontainer/Dockerfile
+++ b/containers/azure-machine-learning-python-3/.devcontainer/Dockerfile
@@ -3,22 +3,42 @@
 # Licensed under the MIT License. See https://go.microsoft.com/fwlink/?linkid=2090316 for license information.
 #-------------------------------------------------------------------------------------------------------------
 
-FROM python:3
+# Update this to FROM python:3 if you'd prefer 
+# to use standard python instead
+FROM continuumio/anaconda3
 
-# Install git, process tools
-RUN apt-get update && apt-get -y install git procps
+# Configure apt
+ENV DEBIAN_FRONTEND=noninteractive
+RUN apt-get update \
+    && apt-get -y install --no-install-recommends apt-utils 2>&1
 
-# Install Docker CE - ** COMMENT OUT IF YOU WILL ONLY RUN LOCAL OR IN AZURE **
-RUN apt-get install -y apt-transport-https ca-certificates curl gnupg-agent software-properties-common \
-    && curl -fsSL https://download.docker.com/linux/debian/gpg | apt-key add - 2>/dev/null \
-    && add-apt-repository "deb [arch=amd64] https://download.docker.com/linux/debian $(lsb_release -cs) stable" \
+# Copy default endpoint specific user settings overrides into container to 
+# to specify Python path and that Docker should run as a workspace extension
+COPY settings.vscode.json /root/.vscode-remote/data/Machine/settings.json
+
+# Install git, required tools
+RUN apt-get install -y \
+            git \
+            curl \
+            procps \
+            apt-transport-https \
+            ca-certificates \
+            gnupg-agent \
+            software-properties-common \
+            sudo \
+            lsb-release 2>&1
+
+# Install Docker CLI
+RUN curl -fsSL https://download.docker.com/linux/$(lsb_release -is | tr '[:upper:]' '[:lower:]')/gpg | (OUT=$(apt-key add - 2>&1) || echo $OUT) \
+    && add-apt-repository "deb [arch=amd64] https://download.docker.com/linux/$(lsb_release -is | tr '[:upper:]' '[:lower:]') $(lsb_release -cs) stable" \
     && apt-get update \
     && apt-get install -y docker-ce-cli
 
-# Install pylint
-RUN pip install pylint
+# Install pylint and Azure ML SDK
+RUN pip install pylint azureml-sdk[notebooks,automl] 2>&1
 
 # Clean up
 RUN apt-get autoremove -y \
     && apt-get clean -y \
     && rm -rf /var/lib/apt/lists/*
+ENV DEBIAN_FRONTEND=dialog
diff --git a/containers/azure-machine-learning-python-3/.devcontainer/settings.vscode.json b/containers/azure-machine-learning-python-3/.devcontainer/settings.vscode.json
new file mode 100644
index 0000000000..adaeba5945
--- /dev/null
+++ b/containers/azure-machine-learning-python-3/.devcontainer/settings.vscode.json
@@ -0,0 +1,8 @@
+{
+    "remote.extensionKind": {
+        "peterjausovec.vscode-docker": "workspace"
+    },
+    "python.pythonPath": "/opt/conda/bin/python",
+    "python.linting.pylintEnabled": true,
+    "python.linting.enabled": true
+}
\ No newline at end of file
diff --git a/containers/azure-machine-learning-python-3/README.md b/containers/azure-machine-learning-python-3/README.md
index af7ed7ee52..1688b7816a 100644
--- a/containers/azure-machine-learning-python-3/README.md
+++ b/containers/azure-machine-learning-python-3/README.md
@@ -1,18 +1,26 @@
-# Azure Machine Learning & Python 3
+# Azure Machine Learning & Python 3 - Anaconda
 
 ## Summary
 
-*Use Azure Machine Learning with Python 3. Includes Python, the Docker CLI (for local testing), and related extensions and dependencies.*
+*Use Azure Machine Learning with Python 3 - Anaconda. Includes Anaconda, the Docker CLI (for local testing), and related extensions and dependencies.*
 
 | Metadata | Value |  
 |----------|-------|
 | *Contributors* | The VS Code Team |
 | *Definition type* | Dockerfile |
-| *Languages, platforms* | Azure Machine Learning, Python |
+| *Languages, platforms* | Azure Machine Learning, Python, Anaconda |
 
 ## Using this definition with an existing folder
 
-This definition requires an Azure subscription to use. You can create a [free account here](https://account.azure.com/signup?offer=ms-azr-0044p&appId=102&ref=azureplat-generic&redirectURL=https%3a%2f%2fazure.microsoft.com%2fen-us%2fget-started%2fwelcome-to-azure%2f&l=en-us&correlationId=15FE63BE1C4960F42D1B6EFB18496296) and learn more about using [Azure Machine Learning with VS Code here](https://docs.microsoft.com/en-us/azure/machine-learning/service/how-to-vscode-tools#get-started-with-azure-machine-learning). Once you have an Azure account, follow these steps:
+There are a few notes for using this definition:
+
+1. This definition requires an Azure subscription to use. You can create a [free account here](https://account.azure.com/signup?offer=ms-azr-0044p&appId=102&ref=azureplat-generic&redirectURL=https%3a%2f%2fazure.microsoft.com%2fen-us%2fget-started%2fwelcome-to-azure%2f&l=en-us&correlationId=15FE63BE1C4960F42D1B6EFB18496296) and learn more about using [Azure Machine Learning with VS Code here](https://docs.microsoft.com/en-us/azure/machine-learning/service/how-to-vscode-tools#get-started-with-azure-machine-learning).
+
+2. The definition also uses an Anaconda base image which can take some time to download the first time given its size.
+
+3. If you are using Docker locally in your `runconfig`, you will need to set `sharedVolumes` to `false` since these will not work from inside a dev container.
+
+Once you have an Azure account, follow these steps:
 
 1. If this is your first time using a development container, please follow the [getting started steps](https://aka.ms/vscode-remote/containers/getting-started) to set up your machine.