diff --git a/src/Flagsmith.php b/src/Flagsmith.php
index 6e9e26e..1b4850d 100644
--- a/src/Flagsmith.php
+++ b/src/Flagsmith.php
@@ -10,12 +10,12 @@
 use Flagsmith\Engine\Segments\SegmentEvaluator;
 use Flagsmith\Engine\Utils\Collections\FeatureStateModelList;
 use Flagsmith\Engine\Utils\Collections\IdentityTraitList;
-use Flagsmith\Exceptions\APIException;
 use Flagsmith\Exceptions\FlagsmithAPIError;
 use Flagsmith\Exceptions\FlagsmithClientError;
 use Flagsmith\Exceptions\FlagsmithThrowable;
 use Flagsmith\Models\Flags;
 use Flagsmith\Models\Segment;
+use Flagsmith\Offline\IOfflineHandler;
 use Flagsmith\Utils\AnalyticsProcessor;
 use Flagsmith\Utils\IdentitiesGenerator;
 use Flagsmith\Utils\Retry;
@@ -32,10 +32,11 @@ class Flagsmith
 {
     use HasWith;
     public const DEFAULT_API_URL = 'https://edge.api.flagsmith.com/api/v1';
-    private string $apiKey;
-    private string $host = self::DEFAULT_API_URL;
+    private ?string $apiKey;
+    private ?string $host;
     private ?object $customHeaders = null;
     private ?int $environmentTtl = null;
+    private bool $enableLocalEvaluation = false;
     private Retry $retries;
     private ?AnalyticsProcessor $analyticsProcessor = null;
     private ?\Closure $defaultFlagHandler = null;
@@ -52,38 +53,65 @@ class Flagsmith
     private bool $useCacheAsFailover = false;
     private array $headers = [];
     private ?EnvironmentModel $environment = null;
+    private bool $offlineMode = false;
+    private ?IOfflineHandler $offlineHandler = null;
 
     /**
      * @throws ValueError
      */
     public function __construct(
-        string $apiKey,
-        string $host = self::DEFAULT_API_URL,
+        string $apiKey = null,
+        string $host = null,
         object $customHeaders = null,
         int $environmentTtl = null,
         Retry $retries = null,
         bool $enableAnalytics = false,
-        \Closure $defaultFlagHandler = null
+        \Closure $defaultFlagHandler = null,
+        bool $offlineMode = false,
+        IOfflineHandler $offlineHandler = null
     ) {
-        $this->apiKey = $apiKey;
-        $this->host = rtrim($host, '/');
-        $this->customHeaders = $customHeaders ?? $this->customHeaders;
-        $this->environmentTtl = $environmentTtl ?? $this->environmentTtl;
-        $this->retries = $retries ?? new Retry(3);
-        $this->analyticsProcessor = $enableAnalytics ? new AnalyticsProcessor($apiKey, $host) : null;
-        $this->defaultFlagHandler = $defaultFlagHandler ?? $this->defaultFlagHandler;
+        if ($offlineMode and is_null($offlineHandler)) {
+            throw new ValueError('offlineHandler must be provided to use offline mode.');
+        }
+
+        if (!is_null($offlineHandler) and !is_null($defaultFlagHandler)) {
+            throw new ValueError('Cannot use both defaultFlagHandler and offlineHandler.');
+        }
+
         if (is_int($environmentTtl)) {
-            if (stripos($this->apiKey, 'ser.') === false) {
+            if (stripos($apiKey, 'ser.') === false) {
                 throw new ValueError(
                     'In order to use local evaluation, please generate a server key in the environment settings page.'
                 );
             }
         }
 
-        //We default to using Guzzle for the HTTP client (as this is how it worked in 1.0)
-        $this->client = Psr18ClientDiscovery::find();
-        $this->requestFactory = Psr17FactoryDiscovery::findRequestFactory();
-        $this->streamFactory = Psr17FactoryDiscovery::findStreamFactory();
+        $this->offlineMode = $offlineMode;
+        $this->offlineHandler = $offlineHandler;
+
+        if (!is_null($offlineHandler)) {
+            $this->environment = $offlineHandler->getEnvironment();
+        }
+
+        if (!$offlineMode) {
+            if (is_null($apiKey)) {
+                throw new ValueError('apiKey is required.');
+            }
+
+            $this->apiKey = $apiKey;
+            $this->host = !is_null($host) ? rtrim($host, '/') : self::DEFAULT_API_URL;
+            $this->customHeaders = $customHeaders ?? $this->customHeaders;
+            $this->environmentTtl = $environmentTtl ?? $this->environmentTtl;
+            $this->enableLocalEvaluation = !is_null($environmentTtl);
+            $this->retries = $retries ?? new Retry(3);
+            $this->analyticsProcessor = $enableAnalytics ? new AnalyticsProcessor($apiKey, $host) : null;
+            $this->defaultFlagHandler = $defaultFlagHandler ?? $this->defaultFlagHandler;
+
+            //We default to using Guzzle for the HTTP client (as this is how it worked in 1.0)
+            $this->client = Psr18ClientDiscovery::find();
+            $this->requestFactory = Psr17FactoryDiscovery::findRequestFactory();
+            $this->streamFactory = Psr17FactoryDiscovery::findStreamFactory();
+        }
     }
 
     /**
@@ -283,7 +311,7 @@ public function getEnvironment(): ?EnvironmentModel
      */
     public function getEnvironmentFlags(): Flags
     {
-        if ($this->environment) {
+        if (($this->offlineMode || $this->enableLocalEvaluation) && $this->environment) {
             return $this->getEnvironmentFlagsFromDocument();
         }
 
@@ -309,7 +337,7 @@ public function getEnvironmentFlags(): Flags
     public function getIdentityFlags(string $identifier, ?object $traits = null, ?bool $transient = false): Flags
     {
         $traits = $traits ?? (object)[];
-        if ($this->environment) {
+        if (($this->offlineMode || $this->enableLocalEvaluation) && $this->environment) {
             return $this->getIdentityFlagsFromDocument($identifier, $traits);
         }
 
@@ -417,6 +445,9 @@ private function getEnvironmentFlagsFromApi(): Flags
                 $this->defaultFlagHandler,
             );
         } catch (FlagsmithAPIError $e) {
+            if (isset($this->offlineHandler)) {
+                return $this->getEnvironmentFlagsFromDocument();
+            }
             if (isset($this->defaultFlagHandler)) {
                 return (new Flags())
                     ->withDefaultFlagHandler($this->defaultFlagHandler);
@@ -450,6 +481,9 @@ private function getIdentityFlagsFromApi(string $identifier, ?object $traits, ?b
                 $this->defaultFlagHandler,
             );
         } catch (FlagsmithAPIError $e) {
+            if (isset($this->offlineHandler)) {
+                return $this->getIdentityFlagsFromDocument($identifier, $traits);
+            }
             if (isset($this->defaultFlagHandler)) {
                 return (new Flags())
                     ->withDefaultFlagHandler($this->defaultFlagHandler);
@@ -485,7 +519,7 @@ private function getIdentityModel(string $identifier, ?object $traits): Identity
         if (is_null($identityModel)) {
             return (new IdentityModel())
                 ->withIdentifier($identifier)
-                ->withEnvironmentApiKey($this->apiKey)
+                ->withEnvironmentApiKey($this->environment->getApiKey())
                 ->withIdentityTraits(new IdentityTraitList($traitModels));
         }
 
diff --git a/src/Offline/IOfflineHandler.php b/src/Offline/IOfflineHandler.php
new file mode 100644
index 0000000..8db194e
--- /dev/null
+++ b/src/Offline/IOfflineHandler.php
@@ -0,0 +1,12 @@
+<?php
+
+declare(strict_types=1);
+
+namespace Flagsmith\Offline;
+
+use Flagsmith\Engine\Environments\EnvironmentModel;
+
+interface IOfflineHandler
+{
+    public function getEnvironment(): ?EnvironmentModel;
+}
diff --git a/src/Offline/LocalFileHandler.php b/src/Offline/LocalFileHandler.php
new file mode 100644
index 0000000..8948211
--- /dev/null
+++ b/src/Offline/LocalFileHandler.php
@@ -0,0 +1,29 @@
+<?php
+
+declare(strict_types=1);
+
+namespace Flagsmith\Offline;
+
+use Flagsmith\Engine\Environments\EnvironmentModel;
+use Flagsmith\Exceptions\FlagsmithClientError;
+
+class LocalFileHandler implements IOfflineHandler
+{
+    private ?EnvironmentModel $environmentModel = null;
+
+    public function __construct(string $filePath)
+    {
+        if (!file_exists($filePath)) {
+            throw new FlagsmithClientError('Unable to read environment from file '.$filePath);
+        }
+
+        $file = fopen($filePath, 'r');
+        $environmentDict = json_decode(fread($file, filesize($filePath)), false, 512, JSON_THROW_ON_ERROR);
+        $this->environmentModel = EnvironmentModel::build($environmentDict);
+    }
+
+    public function getEnvironment(): ?EnvironmentModel
+    {
+        return $this->environmentModel;
+    }
+}
diff --git a/tests/FlagsmithClientTest.php b/tests/FlagsmithClientTest.php
index fb5b0d2..ee63f1d 100644
--- a/tests/FlagsmithClientTest.php
+++ b/tests/FlagsmithClientTest.php
@@ -3,8 +3,8 @@
 use Flagsmith\Exceptions\FlagsmithAPIError;
 use Flagsmith\Flagsmith;
 use Flagsmith\Models\DefaultFlag;
-use Flagsmith\Utils\IdentitiesGenerator;
 use FlagsmithTest\ClientFixtures;
+use FlagsmithTest\Offline\FakeOfflineHandler;
 use GuzzleHttp\Psr7\Response;
 use PHPUnit\Framework\TestCase;
 use Psr\Http\Message\StreamFactoryInterface;
@@ -322,4 +322,123 @@ public function testLocalEvaluationGetIdentityOverride()
             $this->assertEquals($flag->value, 'some-overridden-value');
         }
     }
+
+    public function testOfflineMode()
+    {
+        // Given
+        $offlineHandler = new FakeOfflineHandler();
+        $flagsmith = new Flagsmith(offlineMode: true, offlineHandler: $offlineHandler);
+
+        // When
+        $environmentFlags = $flagsmith->getEnvironmentFlags();
+        $identityFlags = $flagsmith->getIdentityFlags('my-identity');
+
+        // Then
+        $this->assertEquals($environmentFlags->getFlag('some_feature')->enabled, true);
+        $this->assertEquals($environmentFlags->getFlag('some_feature')->value, 'some-value');
+
+        $this->assertEquals($identityFlags->getFlag('some_feature')->enabled, true);
+        $this->assertEquals($identityFlags->getFlag('some_feature')->value, 'some-value');
+    }
+
+    public function testFlagsmithUseOfflineHandlerIfSetAndNoApiResponse()
+    {
+        // Given
+        $handlerBuilder = ClientFixtures::getHandlerBuilder();
+        $handlerBuilder->addRoute(
+            ClientFixtures::getRouteBuilder()->new()
+            ->withMethod('POST')
+            ->withPath('/api/v1/identities/')
+            ->withResponse(new Response(500))
+            ->build()
+        );
+        $handlerBuilder->addRoute(
+            ClientFixtures::getRouteBuilder()->new()
+            ->withMethod('GET')
+            ->withPath('/api/v1/flags/')
+            ->withResponse(new Response(500))
+            ->build()
+        );
+
+        $flagsmith = (new Flagsmith(apiKey: 'some-key', offlineHandler: new FakeOfflineHandler()))
+            ->withClient(ClientFixtures::getMockClient($handlerBuilder, false));
+
+        // When
+        $environmentFlags = $flagsmith->getEnvironmentFlags();
+        $identityFlags = $flagsmith->getIdentityFlags('my-identity');
+
+        // Then
+        $this->assertEquals($environmentFlags->getFlag('some_feature')->enabled, true);
+        $this->assertEquals($environmentFlags->getFlag('some_feature')->value, 'some-value');
+
+        $this->assertEquals($identityFlags->getFlag('some_feature')->enabled, true);
+        $this->assertEquals($identityFlags->getFlag('some_feature')->value, 'some-value');
+    }
+
+    public function testCannotUseOfflineModeWithoutOfflineHandler()
+    {
+        // Given
+        $this->expectException(ValueError::class);
+        $this->expectExceptionMessage('offlineHandler must be provided to use offline mode.');
+
+        // When
+        new Flagsmith(offlineMode:true, offlineHandler:null);
+    }
+
+    public function testCannotUseDefaultHandlerAndOfflineHandler()
+    {
+        // Given
+        $defaultFlag = (new DefaultFlag())
+            ->withEnabled(true)
+            ->withValue('some-default-value');
+
+        $defaultFlagHandler = function (string $featureName) use ($defaultFlag) {
+            return $defaultFlag;
+        };
+
+        $this->expectException(ValueError::class);
+        $this->expectExceptionMessage('Cannot use both defaultFlagHandler and offlineHandler.');
+
+        $offlineHandler = new FakeOfflineHandler();
+
+        // When
+        new Flagsmith(defaultFlagHandler:$defaultFlagHandler, offlineHandler:$offlineHandler);
+    }
+
+    public function testCannotCreateFlagsmithClientInRemoteEvaluationWithoutApiKey()
+    {
+        // Given
+        $this->expectException(ValueError::class);
+        $this->expectExceptionMessage('apiKey is required');
+
+        // When
+        new Flagsmith();
+    }
+
+    public function testOfflineHandlerUsedAsFallbackForLocalEvaluation()
+    {
+        // Given
+        $handlerBuilder = ClientFixtures::getHandlerBuilder();
+        $handlerBuilder->addRoute(
+            ClientFixtures::getRouteBuilder()->new()
+            ->withMethod('GET')
+            ->withPath('/api/v1/environment-document/')
+            ->withResponse(new Response(500))
+            ->build()
+        );
+
+        $offlineHandler = new FakeOfflineHandler();
+        $flagsmith = (new Flagsmith(apiKey: 'ser.some-key', environmentTtl: 3, offlineHandler: $offlineHandler));
+
+        // When
+        $environmentFlags = $flagsmith->getEnvironmentFlags();
+        $identityFlags = $flagsmith->getIdentityFlags('my-identity');
+
+        // Then
+        $this->assertEquals($environmentFlags->getFlag('some_feature')->enabled, true);
+        $this->assertEquals($environmentFlags->getFlag('some_feature')->value, 'some-value');
+
+        $this->assertEquals($identityFlags->getFlag('some_feature')->enabled, true);
+        $this->assertEquals($identityFlags->getFlag('some_feature')->value, 'some-value');
+    }
 }
diff --git a/tests/Offline/FakeOfflineHandler.php b/tests/Offline/FakeOfflineHandler.php
new file mode 100644
index 0000000..9ddfbc7
--- /dev/null
+++ b/tests/Offline/FakeOfflineHandler.php
@@ -0,0 +1,17 @@
+<?php
+
+declare(strict_types=1);
+
+namespace FlagsmithTest\Offline;
+
+use Flagsmith\Engine\Environments\EnvironmentModel;
+use Flagsmith\Offline\IOfflineHandler;
+use FlagsmithTest\ClientFixtures;
+
+class FakeOfflineHandler implements IOfflineHandler
+{
+    public function getEnvironment(): ?EnvironmentModel
+    {
+        return ClientFixtures::getEnvironmentModel();
+    }
+}
diff --git a/tests/Offline/LocalFileHandlerTest.php b/tests/Offline/LocalFileHandlerTest.php
new file mode 100644
index 0000000..357f3a3
--- /dev/null
+++ b/tests/Offline/LocalFileHandlerTest.php
@@ -0,0 +1,20 @@
+<?php
+
+use Flagsmith\Offline\LocalFileHandler;
+use FlagsmithTest\ClientFixtures;
+use PHPUnit\Framework\TestCase;
+
+class LocalFileHandlerTest extends TestCase
+{
+    public function testLocalFileHandler()
+    {
+        // Given
+        $environmentModel = ClientFixtures::getEnvironmentModel();
+
+        // When
+        $localFileHandler = new LocalFileHandler(dirname(__FILE__).'/../Data/environment.json');
+
+        // Then
+        $this->assertEquals($localFileHandler->getEnvironment(), $environmentModel);
+    }
+}