diff --git a/README.rst b/README.rst
new file mode 100644
index 0000000..2ece18f
--- /dev/null
+++ b/README.rst
@@ -0,0 +1,43 @@
+Auto VirtualEnv
+================
+
+Auto-VirtualEnv is a small bash script that automatically initializes a Python
+virtualenv once you get inside a directory.
+
+Setup
+------
+
+The first step is to define where your virtualenvs will reside. You will need
+to create a directory for that and then add it on your startup files (for
+example, `~/.bashrc`). To do that, simply add a line with
+
+`export WORKON_HOME=<directory>`
+
+where `<directory>` is the directory for the virtualenvs.
+
+Next step is getting the `auto-virtualenv.sh` file (really, all you need is
+that file) and saving somewhere in your disk. Then add the following in the
+end of your `~/.bashrc`:
+
+`source <path where auto-virtual.sh is>/auto-virtualenv.sh`
+
+And that's it!
+
+Autoloading VirtualEnvs
+------------------------
+
+To auto-load a virtualenv, you'll need to tell that the directory belongs to a
+virtualenv. To do so, create a file named `.venv` inside the current directory
+with the name of the virtualenv and, every time you get in this directory (or
+any of its children), the virtualenv will be activated automatically.
+
+Other tools
+------------
+
+There are two other tools included in `auto-virtualenv.sh`:
+
+`mkenv` will create a virtualenv (inside your `WORKON_HOME`) and automatically create the `.venv` in the
+current directory.
+
+`venv` will activate any virtualenv without the need of passing the full path
+(as long as the virtualenv is inside `WORKON_HOME`).
diff --git a/auto-virtualenv.sh b/auto-virtualenv.sh
index 754a94a..255a672 100644
--- a/auto-virtualenv.sh
+++ b/auto-virtualenv.sh
@@ -27,10 +27,12 @@ function _upwards_search {
 
 # -- replacement for "cd", which will check the virtualenv file
 function _venv_cd { 
-	if [ ! -f $PWD/$1 -a "$VIRTUAL_ENV." != "."  ]; then 
-		deactivate
-	fi;
-	\cd $1
+	if [ -d "$PWD/$*" ]; then
+		if [ "$VIRTUAL_ENV." != "."  ]; then 
+			deactivate
+		fi
+	fi
+	\cd $*
 	venv=$(_upwards_search)
 	if [ -n "$venv" ]; then 
 		venv $venv