diff --git a/README.rst b/README.rst
index 59bf2667181f9..5145f801fc6eb 100644
--- a/README.rst
+++ b/README.rst
@@ -94,10 +94,25 @@ Optional dependencies
 Installation from sources
 =========================
 
-In the ``pandas`` directory (same one where you found this file), execute::
+To install pandas from source you need ``cython`` in addition to the normal dependencies above,
+which can be installed from pypi::
+
+    pip install cython
+
+In the ``pandas`` directory (same one where you found this file after cloning the git repo), execute::
 
     python setup.py install
 
+or for installing in `development mode <http://www.pip-installer.org/en/latest/usage.html>`__::
+
+    python setup.py develop
+
+Alternatively, you can use `pip` if you want all the dependencies pulled in automatically
+(the optional ``-e`` option is for installing it in
+`development mode <http://www.pip-installer.org/en/latest/usage.html>`__)::
+
+    pip install -e .
+
 On Windows, you will need to install MinGW and execute::
 
     python setup.py build --compiler=mingw32