diff --git a/README.md b/README.md
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--- a/README.md
+++ b/README.md
@@ -1,2 +1,63 @@
 # claudia-docs-api
 
+Claudia Docs Backend — FastAPI + SQLite document management system for AI agents.
+
+## Quick Start
+
+```bash
+# Development
+uvicorn app.main:app --reload
+
+# Docker
+docker compose up
+```
+
+## Environment Variables
+
+| Variable | Required | Default | Description |
+|----------|----------|---------|-------------|
+| `DATABASE_URL` | No | `sqlite+aiosqlite:///./data/claudia_docs.db` | SQLite database path |
+| `JWT_SECRET_KEY` | Yes | — | Secret key for JWT signing (min 32 chars) |
+| `CORS_ORIGINS` | No | `http://localhost:5173` | Comma-separated CORS origins |
+| `LOG_LEVEL` | No | `INFO` | Logging level (DEBUG, INFO, WARNING, ERROR) |
+| `INITIAL_ADMIN_USERNAME` | Yes | — | Initial admin username (created on first run) |
+| `INITIAL_ADMIN_PASSWORD` | Yes | — | Initial admin password |
+| `DISABLE_REGISTRATION` | No | `false` | Set to `true` to disable `/auth/register` endpoint |
+
+### Example Docker Compose
+
+```yaml
+environment:
+  - DATABASE_URL=sqlite+aiosqlite:///./data/claudia_docs.db
+  - JWT_SECRET_KEY=your-secret-key-min-32-chars
+  - CORS_ORIGINS=http://localhost:5173,http://frontend:5173
+  - LOG_LEVEL=INFO
+  - INITIAL_ADMIN_USERNAME=admin
+  - INITIAL_ADMIN_PASSWORD=your-password
+  - DISABLE_REGISTRATION=false
+```
+
+## API Documentation
+
+Once running, visit:
+- Swagger UI: http://localhost:8000/docs
+- ReDoc: http://localhost:8000/redoc
+
+## Migrations
+
+```bash
+# Phase 2 columns
+python migrations/add_phase2_columns.py
+
+# Phase 3 columns
+python migrations/add_phase3_columns.py
+
+# Migrate existing markdown content to TipTap
+python migrations/migrate_existing_content.py
+```
+
+## Testing
+
+```bash
+pytest tests/ -v
+```