diff --git a/README.md b/README.md
index 0e73e52..8e86720 100644
--- a/README.md
+++ b/README.md
@@ -199,8 +199,12 @@ services:
       # - METRICS_PASSWORD=secret
 ```
 
-**Important**: When running µPaaS inside a container, set `UPAAS_HOST_DATA_DIR` to the host path
-that maps to `UPAAS_DATA_DIR`. This is required for Docker bind mounts during builds to work correctly.
+**Important**: You **must** set `HOST_DATA_DIR` to an **absolute path** on the host before running
+`docker compose up`. This value is bind-mounted into the container and passed as `UPAAS_HOST_DATA_DIR`
+so that Docker bind mounts during builds resolve correctly. Relative paths (e.g. `./data`) will break
+container builds because the Docker daemon resolves paths relative to the host, not the container.
+
+Example: `HOST_DATA_DIR=/srv/upaas/data docker compose up -d`
 
 Session secrets are automatically generated on first startup and persisted to `$UPAAS_DATA_DIR/session.key`.