diff --git a/lib/vmpooler/api.rb b/lib/vmpooler/api.rb
index 3b0d9de..9c767b5 100644
--- a/lib/vmpooler/api.rb
+++ b/lib/vmpooler/api.rb
@@ -3,7 +3,7 @@
 module Vmpooler
   class API < Sinatra::Base
     # Load API components
-    %w[helpers dashboard v3 request_logger healthcheck].each do |lib|
+    %w[helpers dashboard v3 request_logger healthcheck queue_monitor].each do |lib|
       require "vmpooler/api/#{lib}"
     end
     # Load dashboard components
@@ -53,6 +53,7 @@ module Vmpooler
         use Vmpooler::Dashboard
         use Vmpooler::API::Dashboard
         use Vmpooler::API::V3
+        use Vmpooler::API::QueueMonitor
       end
 
       # Get thee started O WebServer
diff --git a/lib/vmpooler/api/queue_monitor.rb b/lib/vmpooler/api/queue_monitor.rb
new file mode 100644
index 0000000..d2e897d
--- /dev/null
+++ b/lib/vmpooler/api/queue_monitor.rb
@@ -0,0 +1,197 @@
+# frozen_string_literal: true
+
+require 'vmpooler/api'
+
+module Vmpooler
+  class API
+    # Queue monitoring endpoint for tracking pool queue depths and health
+    class QueueMonitor < Sinatra::Base
+      api_version = '1'
+      api_prefix  = "/api/v#{api_version}"
+
+      helpers do
+        include Vmpooler::API::Helpers
+      end
+
+      # Get queue status for all pools or a specific pool
+      get "#{api_prefix}/queue/status/?" do
+        content_type :json
+
+        result = {
+          ok: true,
+          timestamp: Time.now.to_i,
+          pools: {}
+        }
+
+        pool_filter = params[:pool]
+
+        pools = pool_filter ? [pool_filter] : list_pools
+
+        pools.each do |pool_name|
+          begin
+            metrics = get_queue_metrics(pool_name)
+            result[:pools][pool_name] = metrics
+          rescue StandardError => e
+            result[:pools][pool_name] = {
+              error: e.message
+            }
+          end
+        end
+
+        JSON.pretty_generate(result)
+      end
+
+      # Get detailed queue metrics for a specific pool
+      get "#{api_prefix}/queue/status/:pool/?" do
+        content_type :json
+
+        pool_name = params[:pool]
+
+        unless pool_exists?(pool_name)
+          halt 404, JSON.pretty_generate({
+                                           ok: false,
+                                           error: "Pool '#{pool_name}' not found"
+                                         })
+        end
+
+        begin
+          metrics = get_queue_metrics(pool_name)
+          result = {
+            ok: true,
+            timestamp: Time.now.to_i,
+            pool: pool_name,
+            metrics: metrics
+          }
+
+          JSON.pretty_generate(result)
+        rescue StandardError => e
+          status 500
+          JSON.pretty_generate({
+                                 ok: false,
+                                 error: e.message
+                               })
+        end
+      end
+
+      # Helper method to get queue metrics for a pool
+      def get_queue_metrics(pool_name)
+        redis = redis_connection_pool
+
+        metrics = redis.with_metrics do |conn|
+          {
+            ready: conn.llen("vmpooler__ready__#{pool_name}") || 0,
+            running: conn.scard("vmpooler__running__#{pool_name}") || 0,
+            pending: conn.llen("vmpooler__pending__#{pool_name}") || 0
+          }
+        end
+
+        # Get pending requests count
+        pending_requests = get_pending_requests_for_pool(pool_name, redis)
+
+        # Get oldest pending request age
+        oldest_pending = get_oldest_pending_request(pool_name, redis)
+
+        # Get pool configuration
+        pool_config = get_pool_config(pool_name, redis)
+
+        # Calculate health metrics
+        total_vms = metrics[:ready] + metrics[:running] + metrics[:pending]
+        ready_percentage = total_vms.positive? ? (metrics[:ready].to_f / total_vms * 100).round(2) : 0
+        capacity_percentage = pool_config[:size].positive? ? ((metrics[:ready] + metrics[:pending]).to_f / pool_config[:size] * 100).round(2) : 0
+
+        # Determine health status
+        health_status = determine_health_status(metrics, pending_requests, pool_config)
+
+        {
+          ready: metrics[:ready],
+          running: metrics[:running],
+          pending: metrics[:pending],
+          total: total_vms,
+          pending_requests: pending_requests,
+          oldest_pending_age_seconds: oldest_pending,
+          pool_size: pool_config[:size],
+          ready_percentage: ready_percentage,
+          capacity_percentage: capacity_percentage,
+          health: health_status
+        }
+      end
+
+      # Get pending requests count for a pool
+      def get_pending_requests_for_pool(pool_name, redis)
+        redis.with_metrics do |conn|
+          request_keys = conn.keys("vmpooler__request__*")
+          pending_count = 0
+
+          request_keys.each do |key|
+            request_data = conn.hgetall(key)
+            if request_data['status'] == 'pending' && request_data.key?(pool_name)
+              pending_count += request_data[pool_name].to_i
+            end
+          end
+
+          pending_count
+        end
+      end
+
+      # Get age of oldest pending request in seconds
+      def get_oldest_pending_request(pool_name, redis)
+        redis.with_metrics do |conn|
+          request_keys = conn.keys("vmpooler__request__*")
+          oldest_timestamp = nil
+
+          request_keys.each do |key|
+            request_data = conn.hgetall(key)
+            if request_data['status'] == 'pending' && request_data.key?(pool_name)
+              requested_at = request_data['requested_at']&.to_i
+              oldest_timestamp = requested_at if requested_at && (oldest_timestamp.nil? || requested_at < oldest_timestamp)
+            end
+          end
+
+          oldest_timestamp ? Time.now.to_i - oldest_timestamp : 0
+        end
+      end
+
+      # Get pool configuration from Redis
+      def get_pool_config(pool_name, redis)
+        redis.with_metrics do |conn|
+          config = conn.hgetall("vmpooler__pool__#{pool_name}")
+          {
+            size: config['size']&.to_i || 0,
+            template: config['template'] || 'unknown'
+          }
+        end
+      end
+
+      # Determine health status based on metrics
+      def determine_health_status(metrics, pending_requests, pool_config)
+        if metrics[:ready].zero? && pending_requests.positive?
+          'critical' # No ready VMs and users are waiting
+        elsif metrics[:ready].zero? && metrics[:pending].positive?
+          'warning' # No ready VMs but some are being created
+        elsif metrics[:ready] < (pool_config[:size] * 0.2).ceil
+          'warning' # Less than 20% ready VMs
+        elsif pending_requests.positive?
+          'warning' # Users waiting for VMs
+        else
+          'healthy'
+        end
+      end
+
+      # Check if pool exists
+      def pool_exists?(pool_name)
+        redis = redis_connection_pool
+        redis.with_metrics do |conn|
+          conn.sismember('vmpooler__pools', pool_name)
+        end
+      end
+
+      # Get list of all pools
+      def list_pools
+        redis = redis_connection_pool
+        redis.with_metrics do |conn|
+          conn.smembers('vmpooler__pools') || []
+        end
+      end
+    end
+  end
+end
diff --git a/lib/vmpooler/pool_manager.rb b/lib/vmpooler/pool_manager.rb
index fe55d74..2f4eaaf 100644
--- a/lib/vmpooler/pool_manager.rb
+++ b/lib/vmpooler/pool_manager.rb
@@ -3,6 +3,8 @@
 require 'vmpooler/dns'
 require 'vmpooler/providers'
 require 'vmpooler/util/parsing'
+require 'vmpooler/pool_manager/auto_scaler'
+require 'vmpooler/pool_manager/rate_provisioner'
 require 'spicy-proton'
 require 'resolv' # ruby standard lib
 
@@ -41,6 +43,12 @@ module Vmpooler
       # Name generator for generating host names
       @name_generator = Spicy::Proton.new
 
+      # Auto-scaler for dynamic pool sizing
+      @auto_scaler = AutoScaler.new(@redis, logger, metrics)
+
+      # Rate provisioner for dynamic clone concurrency
+      @rate_provisioner = RateProvisioner.new(@redis, logger, metrics)
+
       # load specified providers from config file
       load_used_providers
 
@@ -1457,6 +1465,17 @@ module Vmpooler
 
         dns_plugin = get_dns_plugin_class_for_pool(pool_name)
 
+        # Get the pool configuration to check for rate-based provisioning
+        pool_config = $config[:pools].find { |p| p['name'] == pool_name }
+
+        # Determine clone concurrency based on demand
+        # Use rate-based provisioning if enabled, otherwise use default task_limit
+        max_concurrent_clones = if pool_config && @rate_provisioner.enabled_for_pool?(pool_config)
+                                  @rate_provisioner.get_clone_concurrency(pool_config, pool_name)
+                                else
+                                  $config[:config]['task_limit'].to_i
+                                end
+
         unless pool_size == 0
           if redis.get("vmpooler__empty__#{pool_name}")
             redis.del("vmpooler__empty__#{pool_name}") unless ready == 0
@@ -1467,7 +1486,8 @@ module Vmpooler
         end
 
         (pool_size - total.to_i).times do
-          if redis.get('vmpooler__tasks__clone').to_i < $config[:config]['task_limit'].to_i
+          # Use dynamic concurrency limit from rate provisioner
+          if redis.get('vmpooler__tasks__clone').to_i < max_concurrent_clones
             begin
               redis.incr('vmpooler__tasks__clone')
               pool_check_response[:cloned_vms] += 1
@@ -1526,6 +1546,9 @@ module Vmpooler
       # Additionally, a pool will drain ready and pending instances
       update_clone_target(pool)
 
+      # Apply auto-scaling if enabled for this pool
+      @auto_scaler.apply_auto_scaling(pool)
+
       repopulate_pool_vms(pool['name'], provider, pool_check_response, pool['size'])
 
       # Remove VMs in excess of the configured pool size
diff --git a/lib/vmpooler/pool_manager/auto_scaler.rb b/lib/vmpooler/pool_manager/auto_scaler.rb
new file mode 100644
index 0000000..d26b6ed
--- /dev/null
+++ b/lib/vmpooler/pool_manager/auto_scaler.rb
@@ -0,0 +1,160 @@
+# frozen_string_literal: true
+
+module Vmpooler
+  class PoolManager
+    # Auto-scaling module for dynamically adjusting pool sizes based on demand
+    class AutoScaler
+      attr_reader :logger, :redis, :metrics
+
+      def initialize(redis_connection_pool, logger, metrics)
+        @redis = redis_connection_pool
+        @logger = logger
+        @metrics = metrics
+        @last_scale_time = Concurrent::Hash.new
+      end
+
+      # Check if auto-scaling is enabled for a pool
+      def enabled_for_pool?(pool)
+        return false unless pool['auto_scale']
+        return false unless pool['auto_scale']['enabled'] == true
+
+        true
+      end
+
+      # Calculate the target pool size based on current metrics
+      def calculate_target_size(pool, pool_name)
+        auto_scale_config = pool['auto_scale']
+        min_size = auto_scale_config['min_size'] || pool['size']
+        max_size = auto_scale_config['max_size'] || pool['size'] * 5
+        scale_up_threshold = auto_scale_config['scale_up_threshold'] || 20
+        scale_down_threshold = auto_scale_config['scale_down_threshold'] || 80
+        cooldown_period = auto_scale_config['cooldown_period'] || 300
+
+        # Check cooldown period
+        last_scale = @last_scale_time[pool_name]
+        if last_scale && (Time.now - last_scale) < cooldown_period
+          logger.log('d', "[~] [#{pool_name}] Auto-scaling in cooldown period (#{cooldown_period}s)")
+          return pool['size']
+        end
+
+        # Get current pool metrics
+        metrics = get_pool_metrics(pool_name)
+        current_size = pool['size']
+        ready_count = metrics[:ready]
+        running_count = metrics[:running]
+        pending_count = metrics[:pending]
+
+        # Calculate total VMs (ready + running + pending)
+        total_vms = ready_count + running_count + pending_count
+        total_vms = 1 if total_vms.zero? # Avoid division by zero
+
+        # Calculate ready percentage
+        ready_percentage = (ready_count.to_f / total_vms * 100).round(2)
+
+        logger.log('d', "[~] [#{pool_name}] Metrics: ready=#{ready_count}, running=#{running_count}, pending=#{pending_count}, ready%=#{ready_percentage}")
+
+        # Determine if we need to scale
+        if ready_percentage < scale_up_threshold
+          # Scale up: increase pool size
+          new_size = calculate_scale_up_size(current_size, max_size, ready_percentage, scale_up_threshold)
+          if new_size > current_size
+            logger.log('s', "[+] [#{pool_name}] Scaling UP: #{current_size} -> #{new_size} (ready: #{ready_percentage}% < #{scale_up_threshold}%)")
+            @last_scale_time[pool_name] = Time.now
+            metrics.increment("scale_up.#{pool_name}")
+            return new_size
+          end
+        elsif ready_percentage > scale_down_threshold
+          # Scale down: decrease pool size (only if no pending requests)
+          pending_requests = get_pending_requests_count(pool_name)
+          if pending_requests.zero?
+            new_size = calculate_scale_down_size(current_size, min_size, ready_percentage, scale_down_threshold)
+            if new_size < current_size
+              logger.log('s', "[-] [#{pool_name}] Scaling DOWN: #{current_size} -> #{new_size} (ready: #{ready_percentage}% > #{scale_down_threshold}%)")
+              @last_scale_time[pool_name] = Time.now
+              metrics.increment("scale_down.#{pool_name}")
+              return new_size
+            end
+          else
+            logger.log('d', "[~] [#{pool_name}] Not scaling down: #{pending_requests} pending requests")
+          end
+        end
+
+        current_size
+      end
+
+      # Get current pool metrics from Redis
+      def get_pool_metrics(pool_name)
+        @redis.with_metrics do |redis|
+          {
+            ready: redis.llen("vmpooler__ready__#{pool_name}") || 0,
+            running: redis.scard("vmpooler__running__#{pool_name}") || 0,
+            pending: redis.llen("vmpooler__pending__#{pool_name}") || 0
+          }
+        end
+      end
+
+      # Get count of pending VM requests
+      def get_pending_requests_count(pool_name)
+        @redis.with_metrics do |redis|
+          # Check for pending requests in request queue
+          request_keys = redis.keys("vmpooler__request__*")
+          pending_count = 0
+
+          request_keys.each do |key|
+            request_data = redis.hgetall(key)
+            if request_data['status'] == 'pending' && request_data.key?(pool_name)
+              pending_count += request_data[pool_name].to_i
+            end
+          end
+
+          pending_count
+        end
+      end
+
+      # Calculate new size when scaling up
+      def calculate_scale_up_size(current_size, max_size, ready_percentage, threshold)
+        # Aggressive scaling when very low on ready VMs
+        if ready_percentage < threshold / 2
+          # Double the size or add 10, whichever is larger
+          new_size = [current_size * 2, current_size + 10].max
+        else
+          # Moderate scaling: increase by 50%
+          new_size = (current_size * 1.5).ceil
+        end
+
+        [new_size, max_size].min
+      end
+
+      # Calculate new size when scaling down
+      def calculate_scale_down_size(current_size, min_size, ready_percentage, threshold)
+        # Conservative scaling down: only reduce by 25%
+        new_size = (current_size * 0.75).floor
+
+        [new_size, min_size].max
+      end
+
+      # Apply auto-scaling to a pool
+      def apply_auto_scaling(pool)
+        return unless enabled_for_pool?(pool)
+
+        pool_name = pool['name']
+        target_size = calculate_target_size(pool, pool_name)
+
+        if target_size != pool['size']
+          pool['size'] = target_size
+          update_pool_size_in_redis(pool_name, target_size)
+        end
+      rescue StandardError => e
+        logger.log('s', "[!] [#{pool_name}] Auto-scaling error: #{e.message}")
+        logger.log('s', e.backtrace.join("\n")) if logger.level == 'debug'
+      end
+
+      # Update pool size in Redis
+      def update_pool_size_in_redis(pool_name, new_size)
+        @redis.with_metrics do |redis|
+          redis.hset("vmpooler__pool__#{pool_name}", 'size', new_size)
+        end
+      end
+    end
+  end
+end
diff --git a/lib/vmpooler/pool_manager/rate_provisioner.rb b/lib/vmpooler/pool_manager/rate_provisioner.rb
new file mode 100644
index 0000000..5e69330
--- /dev/null
+++ b/lib/vmpooler/pool_manager/rate_provisioner.rb
@@ -0,0 +1,95 @@
+# frozen_string_literal: true
+
+module Vmpooler
+  class PoolManager
+    # Rate-based provisioning for adjusting clone concurrency based on demand
+    class RateProvisioner
+      attr_reader :logger, :redis, :metrics
+
+      def initialize(redis_connection_pool, logger, metrics)
+        @redis = redis_connection_pool
+        @logger = logger
+        @metrics = metrics
+        @current_mode = Concurrent::Hash.new # Track provisioning mode per pool
+      end
+
+      # Check if rate-based provisioning is enabled for a pool
+      def enabled_for_pool?(pool)
+        return false unless pool['rate_provisioning']
+        return false unless pool['rate_provisioning']['enabled'] == true
+
+        true
+      end
+
+      # Get the appropriate clone concurrency based on current demand
+      def get_clone_concurrency(pool, pool_name)
+        return pool['clone_target_concurrency'] || 2 unless enabled_for_pool?(pool)
+
+        rate_config = pool['rate_provisioning']
+        normal_concurrency = rate_config['normal_concurrency'] || 2
+        high_demand_concurrency = rate_config['high_demand_concurrency'] || 5
+        threshold = rate_config['queue_depth_threshold'] || 5
+
+        # Get current queue metrics
+        ready_count = get_ready_count(pool_name)
+        pending_requests = get_pending_requests_count(pool_name)
+
+        # Determine if we're in high-demand mode
+        # High demand = many pending requests OR very few ready VMs
+        high_demand = (pending_requests >= threshold) || (ready_count.zero? && pending_requests.positive?)
+
+        new_mode = high_demand ? :high_demand : :normal
+        old_mode = @current_mode[pool_name] || :normal
+
+        # Log mode changes
+        if new_mode != old_mode
+          concurrency = new_mode == :high_demand ? high_demand_concurrency : normal_concurrency
+          logger.log('s', "[~] [#{pool_name}] Provisioning mode: #{old_mode} -> #{new_mode} (concurrency: #{concurrency}, pending: #{pending_requests}, ready: #{ready_count})")
+          @current_mode[pool_name] = new_mode
+          metrics.increment("provisioning_mode_change.#{pool_name}.#{new_mode}")
+        end
+
+        new_mode == :high_demand ? high_demand_concurrency : normal_concurrency
+      end
+
+      # Get count of ready VMs
+      def get_ready_count(pool_name)
+        @redis.with_metrics do |redis|
+          redis.llen("vmpooler__ready__#{pool_name}") || 0
+        end
+      end
+
+      # Get count of pending VM requests
+      def get_pending_requests_count(pool_name)
+        @redis.with_metrics do |redis|
+          # Check for pending requests in request queue
+          request_keys = redis.keys("vmpooler__request__*")
+          pending_count = 0
+
+          request_keys.each do |key|
+            request_data = redis.hgetall(key)
+            if request_data['status'] == 'pending' && request_data.key?(pool_name)
+              pending_count += request_data[pool_name].to_i
+            end
+          end
+
+          # Also check the queue itself for waiting allocations
+          queue_depth = redis.llen("vmpooler__pending__#{pool_name}") || 0
+
+          [pending_count, queue_depth].max
+        end
+      end
+
+      # Get current provisioning mode for a pool
+      def get_current_mode(pool_name)
+        @current_mode[pool_name] || :normal
+      end
+
+      # Force reset to normal mode (useful for testing or recovery)
+      def reset_to_normal(pool_name)
+        @current_mode[pool_name] = :normal
+        logger.log('d', "[~] [#{pool_name}] Provisioning mode reset to normal")
+      end
+    end
+  end
+end
diff --git a/spec/unit/pool_manager/auto_scaler_spec.rb b/spec/unit/pool_manager/auto_scaler_spec.rb
new file mode 100644
index 0000000..f7205f4
--- /dev/null
+++ b/spec/unit/pool_manager/auto_scaler_spec.rb
@@ -0,0 +1,225 @@
+# frozen_string_literal: true
+
+require 'spec_helper'
+require 'vmpooler/pool_manager/auto_scaler'
+
+describe Vmpooler::PoolManager::AutoScaler do
+  let(:logger) { MockLogger.new }
+  let(:metrics) { Vmpooler::Metrics::DummyStatsd.new }
+  let(:redis_connection_pool) { ConnectionPool.new(size: 1) { MockRedis.new } }
+  let(:auto_scaler) { described_class.new(redis_connection_pool, logger, metrics) }
+
+  describe '#enabled_for_pool?' do
+    it 'returns false when auto_scale is not configured' do
+      pool = { 'name' => 'test-pool', 'size' => 5 }
+      expect(auto_scaler.enabled_for_pool?(pool)).to be(false)
+    end
+
+    it 'returns false when auto_scale enabled is false' do
+      pool = { 'name' => 'test-pool', 'size' => 5, 'auto_scale' => { 'enabled' => false } }
+      expect(auto_scaler.enabled_for_pool?(pool)).to be(false)
+    end
+
+    it 'returns true when auto_scale enabled is true' do
+      pool = { 'name' => 'test-pool', 'size' => 5, 'auto_scale' => { 'enabled' => true } }
+      expect(auto_scaler.enabled_for_pool?(pool)).to be(true)
+    end
+  end
+
+  describe '#get_pool_metrics' do
+    let(:pool_name) { 'test-pool' }
+
+    before do
+      redis_connection_pool.with do |redis|
+        # Set up mock Redis data
+        redis.lpush("vmpooler__ready__#{pool_name}", 'vm1')
+        redis.lpush("vmpooler__ready__#{pool_name}", 'vm2')
+        redis.sadd("vmpooler__running__#{pool_name}", 'vm3')
+        redis.sadd("vmpooler__running__#{pool_name}", 'vm4')
+        redis.sadd("vmpooler__running__#{pool_name}", 'vm5')
+        redis.lpush("vmpooler__pending__#{pool_name}", 'vm6')
+      end
+    end
+
+    it 'returns correct metrics' do
+      metrics = auto_scaler.get_pool_metrics(pool_name)
+      expect(metrics[:ready]).to eq(2)
+      expect(metrics[:running]).to eq(3)
+      expect(metrics[:pending]).to eq(1)
+    end
+  end
+
+  describe '#calculate_scale_up_size' do
+    it 'doubles size when ready percentage is very low' do
+      new_size = auto_scaler.calculate_scale_up_size(10, 50, 5, 20)
+      expect(new_size).to eq(20) # Doubled
+    end
+
+    it 'increases by 50% when ready percentage is moderately low' do
+      new_size = auto_scaler.calculate_scale_up_size(10, 50, 15, 20)
+      expect(new_size).to eq(15) # 1.5x = 15
+    end
+
+    it 'respects max_size limit' do
+      new_size = auto_scaler.calculate_scale_up_size(10, 15, 5, 20)
+      expect(new_size).to eq(15) # Would be 20, but max is 15
+    end
+  end
+
+  describe '#calculate_scale_down_size' do
+    it 'reduces by 25%' do
+      new_size = auto_scaler.calculate_scale_down_size(20, 5, 85, 80)
+      expect(new_size).to eq(15) # 20 * 0.75 = 15
+    end
+
+    it 'respects min_size limit' do
+      new_size = auto_scaler.calculate_scale_down_size(10, 8, 85, 80)
+      expect(new_size).to eq(8) # Would be 7.5 (floor to 7), but min is 8
+    end
+  end
+
+  describe '#calculate_target_size' do
+    let(:pool_name) { 'test-pool' }
+    let(:pool) do
+      {
+        'name' => pool_name,
+        'size' => 10,
+        'auto_scale' => {
+          'enabled' => true,
+          'min_size' => 5,
+          'max_size' => 20,
+          'scale_up_threshold' => 20,
+          'scale_down_threshold' => 80,
+          'cooldown_period' => 300
+        }
+      }
+    end
+
+    before do
+      redis_connection_pool.with do |redis|
+        # Clear any existing data
+        redis.flushdb
+      end
+    end
+
+    it 'scales up when ready percentage is low' do
+      redis_connection_pool.with do |redis|
+        # 1 ready, 9 running = 10% ready
+        redis.lpush("vmpooler__ready__#{pool_name}", 'vm1')
+        (2..10).each { |i| redis.sadd("vmpooler__running__#{pool_name}", "vm#{i}") }
+      end
+
+      new_size = auto_scaler.calculate_target_size(pool, pool_name)
+      expect(new_size).to be > 10
+    end
+
+    it 'scales down when ready percentage is high and no pending requests' do
+      redis_connection_pool.with do |redis|
+        # 9 ready, 1 running = 90% ready
+        (1..9).each { |i| redis.lpush("vmpooler__ready__#{pool_name}", "vm#{i}") }
+        redis.sadd("vmpooler__running__#{pool_name}", 'vm10')
+      end
+
+      # Mock no pending requests
+      allow(auto_scaler).to receive(:get_pending_requests_count).and_return(0)
+
+      new_size = auto_scaler.calculate_target_size(pool, pool_name)
+      expect(new_size).to be < 10
+    end
+
+    it 'does not scale during cooldown period' do
+      # Set last scale time to now
+      auto_scaler.instance_variable_get(:@last_scale_time)[pool_name] = Time.now
+
+      redis_connection_pool.with do |redis|
+        # 1 ready, 9 running = should trigger scale up
+        redis.lpush("vmpooler__ready__#{pool_name}", 'vm1')
+        (2..10).each { |i| redis.sadd("vmpooler__running__#{pool_name}", "vm#{i}") }
+      end
+
+      new_size = auto_scaler.calculate_target_size(pool, pool_name)
+      expect(new_size).to eq(10) # No change due to cooldown
+    end
+
+    it 'does not scale down if there are pending requests' do
+      redis_connection_pool.with do |redis|
+        # 9 ready, 1 running = should trigger scale down
+        (1..9).each { |i| redis.lpush("vmpooler__ready__#{pool_name}", "vm#{i}") }
+        redis.sadd("vmpooler__running__#{pool_name}", 'vm10')
+      end
+
+      # Mock pending requests
+      allow(auto_scaler).to receive(:get_pending_requests_count).and_return(5)
+
+      new_size = auto_scaler.calculate_target_size(pool, pool_name)
+      expect(new_size).to eq(10) # No scale down due to pending requests
+    end
+  end
+
+  describe '#update_pool_size_in_redis' do
+    let(:pool_name) { 'test-pool' }
+
+    it 'updates pool size in Redis' do
+      auto_scaler.update_pool_size_in_redis(pool_name, 15)
+
+      redis_connection_pool.with do |redis|
+        size = redis.hget("vmpooler__pool__#{pool_name}", 'size')
+        expect(size).to eq('15')
+      end
+    end
+  end
+
+  describe '#apply_auto_scaling' do
+    let(:pool_name) { 'test-pool' }
+    let(:pool) do
+      {
+        'name' => pool_name,
+        'size' => 10,
+        'auto_scale' => {
+          'enabled' => true,
+          'min_size' => 5,
+          'max_size' => 20,
+          'scale_up_threshold' => 20,
+          'scale_down_threshold' => 80
+        }
+      }
+    end
+
+    before do
+      redis_connection_pool.with do |redis|
+        redis.flushdb
+        # 1 ready, 9 running = 10% ready (should scale up)
+        redis.lpush("vmpooler__ready__#{pool_name}", 'vm1')
+        (2..10).each { |i| redis.sadd("vmpooler__running__#{pool_name}", "vm#{i}") }
+      end
+    end
+
+    it 'applies auto-scaling to pool' do
+      auto_scaler.apply_auto_scaling(pool)
+
+      # Pool size should have increased
+      expect(pool['size']).to be > 10
+
+      # Redis should be updated
+      redis_connection_pool.with do |redis|
+        size = redis.hget("vmpooler__pool__#{pool_name}", 'size').to_i
+        expect(size).to eq(pool['size'])
+      end
+    end
+
+    it 'does nothing if auto-scaling is disabled' do
+      pool['auto_scale']['enabled'] = false
+      original_size = pool['size']
+
+      auto_scaler.apply_auto_scaling(pool)
+
+      expect(pool['size']).to eq(original_size)
+    end
+
+    it 'handles errors gracefully' do
+      allow(auto_scaler).to receive(:calculate_target_size).and_raise(StandardError.new('Test error'))
+
+      expect { auto_scaler.apply_auto_scaling(pool) }.not_to raise_error
+    end
+  end
+end
diff --git a/spec/unit/pool_manager/rate_provisioner_spec.rb b/spec/unit/pool_manager/rate_provisioner_spec.rb
new file mode 100644
index 0000000..f07b301
--- /dev/null
+++ b/spec/unit/pool_manager/rate_provisioner_spec.rb
@@ -0,0 +1,155 @@
+# frozen_string_literal: true
+
+require 'spec_helper'
+require 'vmpooler/pool_manager/rate_provisioner'
+
+describe Vmpooler::PoolManager::RateProvisioner do
+  let(:logger) { MockLogger.new }
+  let(:metrics) { Vmpooler::Metrics::DummyStatsd.new }
+  let(:redis_connection_pool) { ConnectionPool.new(size: 1) { MockRedis.new } }
+  let(:rate_provisioner) { described_class.new(redis_connection_pool, logger, metrics) }
+
+  describe '#enabled_for_pool?' do
+    it 'returns false when rate_provisioning is not configured' do
+      pool = { 'name' => 'test-pool', 'size' => 5 }
+      expect(rate_provisioner.enabled_for_pool?(pool)).to be(false)
+    end
+
+    it 'returns false when rate_provisioning enabled is false' do
+      pool = { 'name' => 'test-pool', 'size' => 5, 'rate_provisioning' => { 'enabled' => false } }
+      expect(rate_provisioner.enabled_for_pool?(pool)).to be(false)
+    end
+
+    it 'returns true when rate_provisioning enabled is true' do
+      pool = { 'name' => 'test-pool', 'size' => 5, 'rate_provisioning' => { 'enabled' => true } }
+      expect(rate_provisioner.enabled_for_pool?(pool)).to be(true)
+    end
+  end
+
+  describe '#get_ready_count' do
+    let(:pool_name) { 'test-pool' }
+
+    before do
+      redis_connection_pool.with do |redis|
+        redis.lpush("vmpooler__ready__#{pool_name}", 'vm1')
+        redis.lpush("vmpooler__ready__#{pool_name}", 'vm2')
+        redis.lpush("vmpooler__ready__#{pool_name}", 'vm3')
+      end
+    end
+
+    it 'returns correct ready count' do
+      count = rate_provisioner.get_ready_count(pool_name)
+      expect(count).to eq(3)
+    end
+  end
+
+  describe '#get_clone_concurrency' do
+    let(:pool_name) { 'test-pool' }
+    let(:pool) do
+      {
+        'name' => pool_name,
+        'rate_provisioning' => {
+          'enabled' => true,
+          'normal_concurrency' => 2,
+          'high_demand_concurrency' => 5,
+          'queue_depth_threshold' => 5
+        }
+      }
+    end
+
+    before do
+      redis_connection_pool.with(&:flushdb)
+    end
+
+    it 'returns normal concurrency when demand is low' do
+      redis_connection_pool.with do |redis|
+        # 3 ready VMs, 0 pending requests
+        (1..3).each { |i| redis.lpush("vmpooler__ready__#{pool_name}", "vm#{i}") }
+      end
+
+      allow(rate_provisioner).to receive(:get_pending_requests_count).and_return(0)
+
+      concurrency = rate_provisioner.get_clone_concurrency(pool, pool_name)
+      expect(concurrency).to eq(2)
+    end
+
+    it 'returns high demand concurrency when pending requests exceed threshold' do
+      redis_connection_pool.with do |redis|
+        # 2 ready VMs, 6 pending requests (exceeds threshold of 5)
+        (1..2).each { |i| redis.lpush("vmpooler__ready__#{pool_name}", "vm#{i}") }
+      end
+
+      allow(rate_provisioner).to receive(:get_pending_requests_count).and_return(6)
+
+      concurrency = rate_provisioner.get_clone_concurrency(pool, pool_name)
+      expect(concurrency).to eq(5)
+    end
+
+    it 'returns high demand concurrency when no ready VMs and requests pending' do
+      redis_connection_pool.with do |redis|
+        # 0 ready VMs, 2 pending requests
+      end
+
+      allow(rate_provisioner).to receive(:get_pending_requests_count).and_return(2)
+
+      concurrency = rate_provisioner.get_clone_concurrency(pool, pool_name)
+      expect(concurrency).to eq(5)
+    end
+
+    it 'returns default concurrency when rate provisioning is disabled' do
+      pool['rate_provisioning']['enabled'] = false
+      pool['clone_target_concurrency'] = 3
+
+      concurrency = rate_provisioner.get_clone_concurrency(pool, pool_name)
+      expect(concurrency).to eq(3)
+    end
+
+    it 'returns default 2 when no configuration exists' do
+      pool_without_config = { 'name' => pool_name }
+
+      concurrency = rate_provisioner.get_clone_concurrency(pool_without_config, pool_name)
+      expect(concurrency).to eq(2)
+    end
+
+    it 'logs mode changes' do
+      redis_connection_pool.with do |redis|
+        # Start in normal mode (3 ready VMs)
+        (1..3).each { |i| redis.lpush("vmpooler__ready__#{pool_name}", "vm#{i}") }
+      end
+
+      allow(rate_provisioner).to receive(:get_pending_requests_count).and_return(0)
+
+      # First call - normal mode
+      rate_provisioner.get_clone_concurrency(pool, pool_name)
+
+      # Change to high demand mode
+      redis_connection_pool.with do |redis|
+        redis.del("vmpooler__ready__#{pool_name}")
+      end
+      allow(rate_provisioner).to receive(:get_pending_requests_count).and_return(10)
+
+      # Second call - should log mode change
+      expect(logger).to receive(:log).with('s', /Provisioning mode: normal -> high_demand/)
+      rate_provisioner.get_clone_concurrency(pool, pool_name)
+    end
+  end
+
+  describe '#get_current_mode' do
+    it 'returns normal mode by default' do
+      expect(rate_provisioner.get_current_mode('test-pool')).to eq(:normal)
+    end
+
+    it 'returns current mode after it has been set' do
+      rate_provisioner.instance_variable_get(:@current_mode)['test-pool'] = :high_demand
+      expect(rate_provisioner.get_current_mode('test-pool')).to eq(:high_demand)
+    end
+  end
+
+  describe '#reset_to_normal' do
+    it 'resets mode to normal' do
+      rate_provisioner.instance_variable_get(:@current_mode)['test-pool'] = :high_demand
+      rate_provisioner.reset_to_normal('test-pool')
+      expect(rate_provisioner.get_current_mode('test-pool')).to eq(:normal)
+    end
+  end
+end
diff --git a/vmpooler.yaml.example b/vmpooler.yaml.example
index f05ded2..cfa37c9 100644
--- a/vmpooler.yaml.example
+++ b/vmpooler.yaml.example
@@ -761,4 +761,26 @@
     provider: vsphere
     create_linked_clone: false
     snapshot_mainMem_ioBlockPages: '2048'
-    snapshot_mainMem_iowait: '0'
+    snapshot_mainMem_iowait: '0'  # Auto-scaling example pool
+  # Automatically adjusts pool size based on demand
+  - name: 'debian-11-x86_64'
+    alias: [ 'debian-11-64', 'debian-11-amd64' ]
+    template: 'Templates/debian-11-x86_64'
+    folder: 'Pooled VMs/debian-11-x86_64'
+    datastore: 'vmstorage'
+    size: 5
+    provider: vsphere
+    # Auto-scaling configuration (optional)
+    auto_scale:
+      enabled: true
+      min_size: 3                    # Minimum pool size (won't scale below this)
+      max_size: 20                   # Maximum pool size (won't scale above this)
+      scale_up_threshold: 20         # Scale up when ready VMs < 20% of total
+      scale_down_threshold: 80       # Scale down when ready VMs > 80% of total
+      cooldown_period: 300           # Wait 300 seconds between scaling actions
+    # Rate-based provisioning configuration (optional)
+    rate_provisioning:
+      enabled: true
+      normal_concurrency: 2          # Normal: clone 2 VMs at a time
+      high_demand_concurrency: 5     # High demand: clone 5 VMs at a time
+      queue_depth_threshold: 5       # Switch to high demand when 5+ requests pending
\ No newline at end of file