diff --git a/README.md b/README.md
index e6dcd5c5..dc24fa36 100644
--- a/README.md
+++ b/README.md
@@ -72,6 +72,8 @@ and install the `vscode-extension.vsix` extension. To do this:
 **IMPORTANT:** Please reinstall the extension when you download it - it is
 still being developed.
 
+To tell the extension where to find cquery, set "cquery.launch.workingDirectory" in User Settings to the location where cquery is installed.
+
 It's probably also worth mentioning that "cquery.launch.command" may need to be customized as well, especially if during building you used a prefix and installed into that prefix, and set "cquery.launch.workingDirectory" to the prefix (since then "cquery.launch.command" will need to be bin/cquery instead of the default release/bin/cquery).
 
 If you run into issues, you can view debug output by running the