diff --git a/README.md b/README.md
index 3a554a711..7e1c6d928 100644
--- a/README.md
+++ b/README.md
@@ -58,6 +58,8 @@ If you use the `ssl_cert` task, change the values in the `config/rake.rb` file a
 
 The second config file, `.chef/knife.rb` is a repository specific configuration file for knife. If you're using the Opscode Platform, you can download one for your organization from the management console. If you're using the Open Source Chef Server, you can generate a new one with `knife configure`. For more information about configuring Knife, see the Knife documentation.
 
+http://help.opscode.com/faqs/chefbasics/knife
+
 Next Steps
 ==========
 
diff --git a/cookbooks/README.md b/cookbooks/README.md
index 63370ed7c..b7b615c7e 100644
--- a/cookbooks/README.md
+++ b/cookbooks/README.md
@@ -1,6 +1,17 @@
 This directory contains the cookbooks used to configure systems in your infrastructure with Chef.
 
-Configure knife to use your preferred copyright holder, email contact and license. Add the following lines to `~/chef-repo/.chef/knife.rb`.
+Knife needs to be configured to know where the cookbooks are located with the `cookbook_path` setting. If this is not set, then several cookbook operations will fail to work properly.
+
+    cookbook_path ["./cookbooks"]
+
+This setting tells knife to look for the cookbooks directory in the present working directory. This means the knife cookbook subcommands need to be run in the `chef-repo` directory itself. To make sure that the cookbooks can be found elsewhere inside the repository, use an absolute path. This is a Ruby file, so something like the following can be used:
+
+    current_dir = File.dirname(__FILE__)
+    cookbook_path ["#{current_dir}/../cookbooks"]
+
+Which will set `current_dir` to the location of the knife.rb file itself (e.g. `~/chef-repo/.chef/knife.rb`).
+
+Configure knife to use your preferred copyright holder, email contact and license. Add the following lines to `.chef/knife.rb`.
 
     cookbook_copyright "Example, Com."
     cookbook_email     "cookbooks@example.com"