diff --git a/src/ChangeLog b/src/ChangeLog
index 83e703e80a1..e359924e8f7 100644
--- a/src/ChangeLog
+++ b/src/ChangeLog
@@ -1,5 +1,7 @@
 2012-01-10  Glenn Morris  <rgm@gnu.org>
 
+	* emacs.c (syms_of_emacs) <installation-directory>: Doc fix.
+
 	* epaths.in (PATH_LOADSEARCH, PATH_EXEC, PATH_DATA, PATH_DOC):
 	Update template values to be closer to their typical values these days.
 
diff --git a/src/emacs.c b/src/emacs.c
index 459fe4ec92a..d0c99bd6dff 100644
--- a/src/emacs.c
+++ b/src/emacs.c
@@ -2480,9 +2480,11 @@ The value is nil if that directory's name is not known.  */);
 
   DEFVAR_LISP ("installation-directory", Vinstallation_directory,
 	       doc: /* A directory within which to look for the `lib-src' and `etc' directories.
-This is non-nil when we can't find those directories in their standard
-installed locations, but we can find them near where the Emacs executable
-was found.  */);
+In an installed Emacs, this is normally nil.  It is non-nil if
+both `lib-src' (on MS-DOS, `info') and `etc' directories are found
+within `invocation-directory' or its parent.  For example, this
+is the case when running an uninstalled Emacs executable from its
+build directory.  */);
   Vinstallation_directory = Qnil;
 
   DEFVAR_LISP ("system-messages-locale", Vsystem_messages_locale,