diff --git a/CHANGELOG b/CHANGELOG
index 04c0c21..86aa37e 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -28,6 +28,7 @@ Small Changes:
 * Added PEG.js version information and homepage header to peg.js.
 * Generated code improvements and fixes.
 * Internal code improvements and fixes.
+* Rewrote README.md.
 
 0.5.1 (2010-11-28)
 ------------------
diff --git a/README.md b/README.md
index 9383b78..7a4c17e 100644
--- a/README.md
+++ b/README.md
@@ -1,75 +1,226 @@
-PEG.js: Parser Generator for JavaScript
-=======================================
+PEG.js
+======
 
-<http://pegjs.majda.cz/>
-
-PEG.js is a parser generator for JavaScript based on the [parsing expression grammar](http://en.wikipedia.org/wiki/Parsing_expression_grammar) formalism. It enables you to easily build fast parsers which process complex data or computer languages. You can use it as an underlying tool when writing various data processors, transformers, interpreters, or compilers.
+PEG.js is a simple parser generator for JavaScript that produces fast parsers with excellent error reporting. You can use it to process complex data or computer languages and build transformers, interpreters, compilers and other tools easily.
 
 Features
 --------
 
-  * Usable [from your browser](http://pegjs.majda.cz/online), from JavaScript code, or [from a command-line](http://pegjs.majda.cz/documentation#generating-a-parser)
-  * Simple and expressive [grammar syntax](http://pegjs.majda.cz/documentation#grammar)
-  * No separate lexical analysis step — both lexical and syntactical analysis are handled by one tool
-  * Handles wide class of grammars (superset of LL(*k*) and LR(*k*))
-  * Precise and human-friendly error reporting
+  * Simple and expressive grammar syntax
+  * Integrates both lexical and syntactical analysis
+  * Parsers have excellent error reporting out of the box
+  * Based on [parsing expression grammar](http://en.wikipedia.org/wiki/Parsing_expression_grammar) formalism — more powerful than traditional LL(*k*) and LR(*k*) parsers
+  * Usable [from your browser](http://pegjs.majda.cz/online), from the command line, or via JavaScript API
 
-Building
---------
+Getting Started
+---------------
+
+[Online version](http://pegjs.majda.cz/online) is the easiest way to generate a parser. Just enter your grammar, try parsing few inputs, and download generated parser code.
+
+Installation
+------------
+
+### Command Line / Server-side
+
+To use command-line version, install [Node.js](http://nodejs.org/) and [npm](http://npmjs.org/) first. You can then install PEG.js:
+
+    $ npm install pegjs
+
+Once installed, you can use the `pegjs` command to generate your parser from a grammar and use the JavaScript API from Node.js.
+
+### Browser
+
+[Download](http://pegjs.majda.cz/#download) the PEG.js library (regular or minified version) and include it in your web page or application using the `<script>` tag.
+
+Generating a Parser
+-------------------
+
+PEG.js generates parser from a grammar that describes expected input and can specify what the parser returns (using semantic actions on matched parts of the input). Generated parser itself is a JavaScript object with a simple API.
+
+### Command Line
+
+To generate a parser from your grammar, use the `pegjs` command:
+
+    $ pegjs arithmetics.pegjs
+
+This writes parser source code into a file with the same name as the grammar file but with “.js” extension. You can also specify the output file explicitly:
+
+    $ pegjs arithmetics.pegjs arithmetics-parser.js
+
+If you omit both input and ouptut file, standard input and output are used.
+
+By default, the parser object is assigned to `module.exports`, which makes the output a Node.js module. You can assign it to another variable by passing a variable name using the `-e`/`--export-var` option. This may be helpful if you want to use the parser in browser environment.
 
-To build PEG.js, you need to have [Node](http://nodejs.org/) installed together with the `jake` package. Then simply run the `jake` command:
+### JavaScript API
 
-    $ jake
+In Node.js, require the PEG.js parser generator module:
 
-This command creates the PEG.js library in `lib/peg.js` by processing files in the `src` directory.
+    var PEG = require("pegjs");
 
-Usage
------
+In browser, include the PEG.js library in your web page or application using the `<script>` tag. The API will be available through the `PEG` global object.
 
-Using PEG.js is easy:
+To generate a parser, call the `PEG.buildParser` method and pass your grammar as a parameter:
 
     var parser = PEG.buildParser("start = ('a' / 'b')+");
+
+The method will return generated parser object or throw an exception if the grammar is invalid. The exception will contain `message` property with more details about the error.
+
+To get parser’s source code, call the `toSource` method on the parser.
+
+Using the Parser
+----------------
+
+Using the generated parser is simple — just call its `parse` method and pass an input string as a parameter. The method will return a parse result (the exact value depends on the grammar used to build the parser) or throw an exception if the input is invalid. The exception will contain `line`, `column` and `message` properties with more details about the error.
+
     parser.parse("abba"); // returns ["a", "b", "b", "a"]
-    parser.parse("abcd"); // throws an exception with details about the error
 
-Basically, you need to generate a parser from your grammar and then use it to parse the input.
+    parser.parse("abcd"); // throws an exception
+
+You can also start parsing from a specific rule in the grammar. Just pass the rule name to the `parse` method as a second parameter.
+
+Grammar Syntax and Semantics
+----------------------------
+
+The grammar syntax is similar to JavaScript in that it is not line-oriented and ignores whitespace between tokens. You can also use JavaScript-style comments (`// ...` and `/* ... */`).
+
+Let's look at example grammar that recognizes simple arithmetic expressions like `2*(3+4)`. A parser generated from this grammar computes their values.
+
+    start
+      = additive
+
+    additive
+      = left:multiplicative "+" right:additive { return left + right; }
+      / multiplicative
+
+    multiplicative
+      = left:primary "*" right:multiplicative { return left * right; }
+      / primary
+
+    primary
+      = integer
+      / "(" additive:additive ")" { return additive; }
+
+    integer "integer"
+      = digits:[0-9]+ { return parseInt(digits.join(""), 10); }
+
+On the top level, the grammar consists of *rules* (in our example, there are five of them). Each rule has a *name* (e.g. `integer`) that identifies the rule, and a *parsing expression* (e.g. `digits:[0-9]+ { return parseInt(digits.join(""), 10); }`) that defines a pattern to match against the input text and possibly contains some JavaScript code that determines what happens when the pattern matches successfully. A rule can also contain *human-readable name* that is used in error messages (in our example, only the `integer` rule has a human-readable name). The parsing starts at the first rule, which is also called the *start rule*.
+
+A rule name must be a JavaScript identifier. It is followed by an equality sign (“=”) and a parsing expression. If the rule has a human-readable name, it is written as a JavaScript string between the name and separating equality sign. Rules need to be separated only by whitespace (their beginning is easily recognizable), but a semicolon (“;”) after the parsing expression is allowed.
+
+Rules can be preceded by an *initializer* — a piece of JavaScript code in curly braces (“{” and “}”). This code is executed before the generated parser starts parsing. All variables and functions defined in the initializer are accessible in rule actions and semantic predicates. Curly braces in the initializer code must be balanced.
+
+The parsing expressions of the rules are used to match the input text to the grammar. There are various types of expressions — matching characters or character classes, indicating optional parts and repetition, etc. Expressions can also contain references to other rules. See detailed description below.
 
-### Generating a Parser
+If an expression successfully matches a part of the text when running the generated parser, it produces a *match result*, which is a JavaScript value. For example:
 
-There are three ways how to generate the parser:
+  * An expression matching a literal string produces a JavaScript string containing matched part of the input.
+  * An expression matching repeated occurrence of some subexpression produces a JavaScript array with all the matches.
 
-  1. Using the [online generator](http://pegjs.majda.cz/online)
-  2. Using the `PEG.buildParser` function from JavaScript code
-  3. Using the command line
+The match results propagate through the rules when the rule names are used in expressions, up to the start rule. The generated parser returns start rule's match result when parsing is successful.
 
-The [online generator](http://pegjs.majda.cz/online) is easiest to use — you just enter your grammar and download the generated parser code. The parser object will be available in a global variable you specify (`parser` by default).
+One special case of parser expression is a *parser action* — a piece of JavaScript code inside curly braces (“{” and “}”) that takes match results of some of the the preceding expressions and returns a JavaScript value. This value is considered match result of the preceding expression (in other words, the parser action is a match result transformer).
 
-To generate the parser from JavaScript code, include the `lib/compiler.js` file and use the `PEG.buildParser` function. This function accepts a string with a grammar and either returns the built parser object or throws an exception if the grammar is invalid.
+In our arithmetics example, there are many parser actions. Consider the action in expression `digits:[0-9]+ { return parseInt(digits.join(""), 10); }`. It takes the match result of the expression [0-9]+, which is an array of strings containing digits, as its parameter. It joins the digits together to form a number and converts it to a JavaScript `number` object.
 
-To generate the parser from a command line, you need to have [Node](http://nodejs.org/) installed. Then use the `bin/pegjs` script:
+### Parsing Expression Types
 
-    $ bin/pegjs --export-var arithmeticsParser examples/arithmetics.pegjs
+There are several types of parsing expressions, some of them containing subexpressions and thus forming a recursive structure:
 
-This command will create the parser from the `examples/arithmetics.pegjs` file and put in into the `examples/arithmetics.js` file. The parser object will be available in the `arithmeticsParser` global variable. To learn more about the generator usage, use  the `--help` option.
+#### "*literal*"<br>'*literal*'
 
-### Using the Generated Parser
+Match exact literal string and return it. The string syntax is the same as in JavaScript.
 
-To use the generated parser, include the generated file (unless you built the parser straight from the JavaScript code using `PEG.buildParser`) and use the `parse` method on the parser object. This method accepts an input string and either returns the parse result (dependent on the actions you specified in the grammar) or throws `PEG.grammarParser.SyntaxError` exception if the input contains a syntax error. The exception has properties `message`, `line` and `column`, which contain details about the error.
+#### .
 
-The parser object also has the `toSource` method that returns its textual representation.
+Match exactly one character and return it as a string.
 
-Grammar
--------
-For detailed description of the grammar see the [online documentation](http://pegjs.majda.cz/documentation#grammar).
+#### [*characters*]
+
+Match one character from a set and return it as a string. The characters in the list can be escaped in exactly the same way as in JavaScript string. The list of characters can also contain ranges (e.g. `[a-z]` means “all lowercase letters”). Preceding the characters with `^` inverts the matched set (e.g. `[^a-z]` means “all character but lowercase letters”).
+
+#### *rule*
+
+Match a parsing expression of a rule recursively and return its match result.
+
+#### ( *expression* )
+
+Match a subexpression and return its match result.
+
+#### *expression* \*
+
+Match zero or more repetitions of the expression and return their match results in an array. The matching is greedy, i.e. the parser tries to match the expression as many times as possible.
+
+#### *expression* +
+
+Match one or more repetitions of the expression and return their match results in an array. The matching is greedy, i.e. the parser tries to match the expression as many times as possible.
+
+#### *expression* ?
+
+Try to match the expression. If the match succeeds, return its match result, otherwise return an empty string.
+
+#### & *expression*
+
+Try to match the expression. If the match succeeds, just return an empty string and do not advance the parser position, otherwise consider the match failed.
+
+#### ! *expression*
+
+Try to match the expression and. If the match does not succeed, just return an empty string and do not advance the parser position, otherwise consider the match failed.
+
+#### & { *predicate* }
+
+The predicate is a piece of JavaScript code that is executed as if it was inside a function. It should return some JavaScript value using the `return` statement. If the returned value evaluates to `true` in boolean context, just return an empty string and do not advance the parser position; otherwise consider the match failed.
+
+The code inside the predicate has access to all variables and functions defined in the initializer at the beginning of the grammar. Curly braces in the predicate code must be balanced.
+
+#### ! { *predicate* }
+
+The predicate is a piece of JavaScript code that is executed as if it was inside a function. It should return some JavaScript value using the `return` statement. If the returned value evaluates to `false` in boolean context, just return an empty string and do not advance the parser position; otherwise consider the match failed.
+
+The code inside the predicate has access to all variables and functions defined in the initializer at the beginning of the grammar. Curly braces in the predicate code must be balanced.
+
+#### *label* : *expression*
+
+Match the expression and remember its match result under given lablel. The label must be a JavaScript identifier.
+
+Labeled expressions are useful together with actions, where saved match results can be accessed by action's JavaScript code.
+
+#### *expression<sub>1</sub>* *expression<sub>2</sub>* ... *expression<sub>n</sub>*
+
+Match a sequence of expressions and return their match results in an array.
+
+#### *expression* { *action* }
+
+Match the expression. If the match is successful, run the action, otherwise consider the match failed.
+
+The action is a piece of JavaScript code that is executed as if it was inside a function. It gets the match results of labeled expressions in preceding expression as its arguments. The action should return some JavaScript value using the `return` statement. This value is considered match result of the preceding expression. The action can return `null` to indicate a match failure.
+
+The code inside the action has access to all variables and functions defined in the initializer at the beginning of the grammar. Curly braces in the action code must be balanced.
+
+#### *expression<sub>1</sub>* / *expression<sub>2</sub>* / ... / *expression<sub>n</sub>*
+
+Try to match the first expression, if it does not succeed, try the second one, etc. Return the match result of the first successfully matched expression. If no expression matches, consider the match failed.
 
 Compatibility
 -------------
 
 Both the parser generator and generated parsers should run well in the following environments:
 
-  * IE6+
+  * Node.js 0.4.4+
+  * IE 6+
   * Firefox
   * Chrome
   * Safari
   * Opera
-  * Node
+
+Development
+-----------
+
+  * [Project website](https://pegjs.majda.cz/)
+  * [Source code](https://github.com/dmajda/pegjs)
+  * [Issue tracker](https://github.com/dmajda/pegjs/issues)
+  * [Google Group](http://groups.google.com/group/pegjs)
+  * [Twitter](http://twitter.com/peg_js)
+
+PEG.js is developed by [David Majda](http://majda.cz/) ([@dmajda](http://twitter.com/dmajda)). You are welcome to contribute code. Unless your contribution is really trivial you should get in touch with me first — this can prevent wasted effort on both sides. You can send code both as patch or GitHub pull request.
+
+Note that PEG.js is still very much work in progress. There are no compatibility guarantees until version 1.0.