diff --git a/README.txt b/README.txt
index 31d517f57b..df68238ee0 100644
--- a/README.txt
+++ b/README.txt
@@ -9,6 +9,9 @@ set PATH=%PATH%;%M2_HOME%\bin
 or
 export PATH=$PATH:$M2_HOME/bin
 
+In addition, the last part of the M2_HOME path MUST be of the form maven-$version, eg:
+/usr/local/maven-2.1-SNAPSHOT
+
 You can set the parameters passed to the Java VM when running Maven2 bootstrap,
 setting the environment variable MAVEN_OPTS, e.g.
 e.g. to run in offline mode, set MAVEN_OPTS=-o