diff --git a/docs/config-azure-openai.md b/docs/config-azure-openai.md
index ca6eb5948..2d07c301b 100644
--- a/docs/config-azure-openai.md
+++ b/docs/config-azure-openai.md
@@ -14,7 +14,7 @@ If you have an `API Endpoint` and `API Key`, you can configure big-AGI as follow
 1. Launch the `big-AGI` application
 2. Go to the **Models** settings
 3. Add a Vendor and select **Azure OpenAI**
-    - Enter the Endpoint (e.g., 'https://your-openai-api-1234.openai.azure.com/')
+    - Enter the Endpoint (e.g., 'https://your-resource-name.openai.azure.com')
     - Enter the API Key (e.g., 'fd5...........................ba')
 
 The deployed models are now available in the application. If you don't have a configured
@@ -23,6 +23,25 @@ Azure OpenAI service instance, continue with the next section.
 In addition to using the UI, configuration can also be done using
 [environment variables](environment-variables.md).
 
+## Azure OpenAI API Versions
+
+Azure OpenAI supports both traditional deployment-based API and the next-generation v1 API:
+
+### Next-Generation v1 API (Default)
+- **Enabled by default** for GPT-5-like models (GPT-5, GPT-6, o3, o4, etc.)
+- Uses direct `/openai/v1/responses` endpoint without deployment IDs
+- Optimized for advanced reasoning models and new features
+- Can be disabled by setting `AZURE_OPENAI_DISABLE_V1=true`
+
+### Traditional Deployment-Based API
+- Uses `/openai/deployments/{deployment-name}/...` endpoints
+- Required for older models and when v1 API is disabled
+- Needs deployment ID for all API calls
+
+### Known Limitations
+- **Web Search Tool**: Azure OpenAI does not support the `web_search_preview` tool that's available in OpenAI's API
+- Models with web search capabilities will have this feature automatically disabled on Azure
+
 ## Setting Up Azure
 
 ### Step 1: Azure Account & Subscription
diff --git a/docs/environment-variables.md b/docs/environment-variables.md
index cfb53e8ca..b1af02297 100644
--- a/docs/environment-variables.md
+++ b/docs/environment-variables.md
@@ -94,6 +94,9 @@ requiring the user to enter an API key
 | `ALIBABA_API_KEY`           | The API key for Alibaba AI                                                                                     | Optional                                                          |
 | `AZURE_OPENAI_API_ENDPOINT` | Azure OpenAI endpoint - host only, without the path                                                            | Optional, but if set `AZURE_OPENAI_API_KEY` must also be set      |
 | `AZURE_OPENAI_API_KEY`      | Azure OpenAI API key, see [config-azure-openai.md](config-azure-openai.md)                                     | Optional, but if set `AZURE_OPENAI_API_ENDPOINT` must also be set |
+| `AZURE_OPENAI_DISABLE_V1`   | Disables the next-generation v1 API for GPT-5-like models (set to 'true' to disable)                          | Optional, defaults to enabled                                     |
+| `AZURE_OPENAI_API_VERSION`  | API version for traditional deployment-based endpoints                                                          | Optional, defaults to '2025-04-01-preview'                       |
+| `AZURE_DEPLOYMENTS_API_VERSION` | API version for the deployments listing endpoint                                                            | Optional, defaults to '2023-03-15-preview'                       |
 | `ANTHROPIC_API_KEY`         | The API key for Anthropic                                                                                      | Optional                                                          |
 | `ANTHROPIC_API_HOST`        | Changes the backend host for the Anthropic vendor, to enable platforms such as AWS Bedrock                     | Optional                                                          |
 | `DEEPSEEK_API_KEY`          | The API key for Deepseek AI                                                                                    | Optional                                                          |