diff --git a/README.md b/README.md
index 7ad613665..32960e91a 100644
--- a/README.md
+++ b/README.md
@@ -62,16 +62,11 @@ Currently the easiest way to install Home Manager is as follows:
     depending on whether you are tracking Nixpkgs unstable or version
     17.03.
 
-3.  Add Home Manager to your user's Nixpkgs, for example by adding it
-    to the `packageOverrides` section in your
-    `~/.config/nixpkgs/config.nix` file:
+3.  Add Home Manager to your user's Nixpkgs, for example by symlinking the
+    overlay to `~/.config/nixpkgs/overlays`:
 
-    ```nix
-    {
-      packageOverrides = pkgs: rec {
-        home-manager = import ./home-manager { inherit pkgs; };
-      };
-    }
+    ```console
+    $ ln -s ~/.config/nixpkgs/home-manager/overlay.nix ~/.config/nixpkgs/overlays/home-manager.nix
     ```
 
 4.  Install the `home-manager` package:
diff --git a/modules/programs/home-manager.nix b/modules/programs/home-manager.nix
index 2b211b85b..ad7278a12 100644
--- a/modules/programs/home-manager.nix
+++ b/modules/programs/home-manager.nix
@@ -46,8 +46,8 @@ in
         if nix-env -q | grep -q '^home-manager$' ; then
           $DRY_RUN_CMD nix-env -e home-manager
 
-          echo "You can now remove the 'home-manager' entry in"
-          echo "'~/.config/nixpkgs/config.nix', if you want."
+          echo "You can now remove the 'home-manager' packageOverride"
+          echo "or overlay in '~/.config/nixpkgs/', if you want."
         fi
       '';
   };
diff --git a/overlay.nix b/overlay.nix
new file mode 100644
index 000000000..6c64fa6b1
--- /dev/null
+++ b/overlay.nix
@@ -0,0 +1,3 @@
+self: super: {
+  home-manager = import ./home-manager { pkgs = super; };
+}