diff --git a/CHANGELOG.txt b/CHANGELOG.txt
index 45da1253dced9b7541d71c108346426ec313f83d..59a79ca6a73c37e79effe4a76f67d9b48b8b0be8 100644
--- a/CHANGELOG.txt
+++ b/CHANGELOG.txt
@@ -1,6 +1,7 @@
 
 Libraries 6.x-1.x, xxxx-xx-xx
 -----------------------------
+#1386250 by tstoeckler: Clarify module and library installation in README.txt.
 
 Libraries 6.x-1.0, 2010-01-27
 -----------------------------
diff --git a/README.txt b/README.txt
index 7db9c6fef200ec11b3b57dcad185dd593071e1ea..70a77256c90d2e4e9345e9f95d83a5614e0e8e34 100644
--- a/README.txt
+++ b/README.txt
@@ -17,6 +17,9 @@ Bug reports, feature suggestions and latest developments:
 -- INSTALLATION --
 
 * Install as usual, see http://drupal.org/node/70151 for further information.
+  Note that installing external libraries is separate from installing this
+  module and should happen in the sites/all/libraries directory. See
+  http://drupal.org/node/1440066 for more information.
 
 
 -- CONTACT --