diff --git a/INSTALL b/INSTALL
new file mode 100644
index 00000000..38784fe6
--- /dev/null
+++ b/INSTALL
@@ -0,0 +1,30 @@
+How to install BIRD
+===================
+
+$ ./configure
+$ make
+# make install
+
+Default location for configuration file is /usr/local/etc/bird.conf and
+for control socket is /usr/local/var/run/bird.ctl . You can change that
+by --sysconfdir and --localstatedir configure options.
+
+
+Requirements
+============
+
+For compiling BIRD you need these programs and libraries:
+
+ - GNU C Compiler
+ - GNU Make
+ - GNU Bison
+ - GNU M4
+ - Flex
+
+ - ncurses library
+ - GNU Readline library (2.1 or newer)
+
+For compiling BIRD documentation you also need:
+
+ - Linuxdoc-Tools
+ - LaTeX
diff --git a/doc/bird.sgml b/doc/bird.sgml
index e93e534d..666d9f62 100644
--- a/doc/bird.sgml
+++ b/doc/bird.sgml
@@ -844,7 +844,8 @@ for each neighbor using the following configuration parameters:
 	of the interface our neighbor is connected to.
 
 	<tag>password <m/string/</tag> Use this password for MD5 authentication
-	of BGP sessions. Default: no authentication.
+	of BGP sessions. Default: no authentication. Password has to be set by
+	external utility (e.g. setkey(8)) on BSD systems.
 
 	<tag>rr client</tag> Be a route reflector and treat the neighbor as
 	a route reflection client. Default: disabled.