diff --git a/README.md b/README.md
index df259e0f4..77ad7e6ed 100644
--- a/README.md
+++ b/README.md
@@ -12,6 +12,45 @@ Part of that means that the API follows the HAL-JSON style.
 
 # Installation
 
+## Using Docker Compose (recommended for development)
+
+Run docker compose:
+```
+    docker compose up
+```
+
+Navigate to `localhost:8090`.
+
+By default a collection of example datasets is loaded, and a local database is setup and initialized.
+This behaviour can be changed with environment variables as described below.
+
+### Environment
+
+The following environment variables are useful for configuring a local development environment.
+
+* `DATABASE_URL`: the postgresql URL of the database the application should connect to.
+    The default is the `database` container in the compose file.
+* `INITIALIZE_DB`: Initialize the database with django migrate and import schema's. Default `true`.
+* `MOCK_DATA`: Fill the initialized database with autogenerated mock data. Default: `false`.
+* `SCHEMA_URL`: URL of the dataset schemas. To use the production schemas set this to:
+    "https://schemas.data.amsterdam.nl/datasets/"
+    Default is the `schemas` container in the compose file.
+
+To connect to an authentication provider, setup the following environment variables:
+* `OAUTH_CLIENT_ID`: The client id of the application
+* `OAUTH_JWKS_URL`: The JWKS URL of the authentication provider.
+* `OAUTH_URL`:  The auth URL of the authentication provider.
+
+#### Example
+A local setup using the production dataset schema's with mock data:
+```
+    export INITIALIZE_DB=true
+    export MOCK_DATA=true
+    export SCHEMA_URL="https://schemas.data.amsterdam.nl/datasets/"
+    compose up
+```
+
+## Without Docker Compose
 See the instructions at: <https://dso-api.readthedocs.io/en/latest/howto/install.html>
 
 These instructions can also be found in the ``dev-docs/source/howto/install.rst`` file.