diff --git a/docs/CONFIGURATION.md b/docs/CONFIGURATION.md
new file mode 100644
index 00000000..ac1b97c9
--- /dev/null
+++ b/docs/CONFIGURATION.md
@@ -0,0 +1,70 @@
+# Configuration
+
+Dethrace looks for a `dethrace.ini` file in the [system preferences directory](https://wiki.libsdl.org/SDL2/SDL_GetPrefPath):
+| Platform | Example Path                                                                 |
+|----------|----------------------------------------------------------------------|
+| Windows  | `C:\Users\bob\AppData\Roaming\dethrace\dethrace.ini`                |
+| macOS    | `/Users/bob/Library/Application Support/dethrace/dethrace.ini`      |
+| Linux    | `/home/bob/.local/share/dethrace/dethrace.ini`                      |
+
+
+If this file is not present, dethrace will run with default configuration and attempt to discover the correct Carmageddon directory to use (see below).
+
+## Example dethrace.ini file
+```ini
+[General]
+; Enable original CD check
+CdCheck = 0
+
+; Enable original censorship check
+GoreCheck = 0
+
+; set to 0 to disable
+FPSLimit = 60
+
+; Full screen or window
+Windowed = 1
+
+; 3dfx mode (via OpenGL)
+Emulate3DFX = 0
+
+; Censored zombie/robots mode
+BoringMode = 0
+
+; Play cut scenes on startup and between races
+Cutscenes = 0
+
+; "hires" mode is 640x480, otherwise default 320x200
+Hires = 1
+
+; Only used in 'demo' mode. Default demo time out is 240s (5 mins)
+DemoTimeout = 240
+
+; Which directory in the [Games] section to run
+DefaultGame = c1
+
+[Games]
+c1 = /opt/carma/c1
+c1demo = /opt/carma/c1demo
+sp = /opt/carma/splatpack
+
+[Cheats]
+EditMode = 0
+FreezeTimer = 0
+GameCompleted = 0
+
+[Sound]
+Enabled = 1
+SoundOptionsScreen = 1
+VolumeMultiplier = 1
+
+[Network]
+AdapterName = ""
+```
+
+## Order of precedence for game directory detection:
+1. Directory pointed to by DefaultGame
+2. First game in the list if at least 1 game dir is specified
+3. `DETHRACE_ROOT_DIR` environment variable
+4. Current working directory (if `DATA/GENERAL.TXT` exists)
+5. `SDL_GetPrefPath` directory