diff --git a/README.md b/README.md
index 64cac00..4659bb4 100644
--- a/README.md
+++ b/README.md
@@ -121,6 +121,35 @@ Options:
 ```
 <!--[[[end]]] -->
 
+## Configuration
+
+The command line tool applecrate can be configured via `pyproject.toml` or `applecrate.toml` in the current working directory or via command line options. The command line arguments will always take precedence over the configuration files. If present, `applecrate.toml` will take precedence over `pyproject.toml`. The configuration file should be in the following format:
+
+`pyproject.toml`:
+
+```toml
+[tool.applecrate]
+app = "mytool"
+version = "1.0.0"
+license = "LICENSE"
+install = [
+    ["dist/mytool", "/usr/local/bin/{{ app }}-{{ version }}"],
+]
+```
+
+`applecrate.toml`:
+
+```toml
+app = "mytool"
+version = "1.0.0"
+license = "LICENSE"
+install = [
+    ["dist/mytool", "/usr/local/bin/{{ app }}-{{ version }}"],
+]
+```
+
+Any command line option is a valid key in the configuration file. For example, the `--app` option can be set in the configuration file as `app = "mytool"`. Command line options with a dash (`-`) should be converted to underscores (`_`) in the configuration file. For example, the `--pre-install` option should be set in the configuration file as `pre_install = "scripts/preinstall.sh"`.
+
 ## To Do
 
 - [X] Add support for signing the installer with a developer certificate
diff --git a/tests/test_applecrate_cli.py b/tests/test_applecrate_cli.py
index 457b841..11ea294 100644
--- a/tests/test_applecrate_cli.py
+++ b/tests/test_applecrate_cli.py
@@ -6,6 +6,7 @@
 from click.testing import CliRunner
 
 from applecrate.cli import cli
+from applecrate.pkg_utils import pkg_files
 
 
 def test_cli_config_precedence():
@@ -17,6 +18,7 @@ def test_cli_config_precedence():
                 """
                 output = "applecrate_output.pkg"
                 app = "applecrate"
+                install = [["applecrate.toml", "/usr/local/bin/applecrate.toml"],]
                 """
             )
         with open("pyproject.toml", "w") as f:
@@ -39,3 +41,5 @@ def test_cli_config_precedence():
         assert result.exit_code == 0
         assert "applecrate-2.0.0-cli_output.pkg" in result.output
         assert pathlib.Path("applecrate-2.0.0-cli_output.pkg").exists()
+        files = pkg_files("applecrate-2.0.0-cli_output.pkg")
+        assert "applecrate.pkg/usr/local/bin/applecrate.toml" in files