diff --git a/README.md b/README.md
index c76bf92..0d93fc5 100644
--- a/README.md
+++ b/README.md
@@ -122,6 +122,17 @@ taskmanagerapi/
 └── requirements.txt       # Project dependencies
 ```
 
+## Database Configuration
+
+The application is configured to use SQLite with the following database locations (in order of priority):
+
+1. Path defined in the `DB_PATH` environment variable (if set)
+2. `/app/db/db.sqlite` (production environment)
+3. `./db/db.sqlite` (local development)
+4. `/tmp/taskmanager/db.sqlite` (fallback)
+
+The application automatically selects the first available and writable location from this list.
+
 ## Getting Started
 
 ### Installation