diff --git a/README.md b/README.md
index 2d4918264a..ac2d9764ae 100644
--- a/README.md
+++ b/README.md
@@ -54,7 +54,7 @@ You can deploy your own version of Chatbot to Vercel with one click:
 
 ## Running locally
 
-You will need to use the environment variables [defined in `.env.example`](.env.example) to run Chatbot. It's recommended you use [Vercel Environment Variables](https://vercel.com/docs/projects/environment-variables) for this, but a `.env` file is all that is necessary.
+You will need to use the environment variables [defined in `.env.example`](.env.example) to run Chatbot. It's recommended you use [Vercel Environment Variables](https://vercel.com/docs/projects/environment-variables) for this, but a `.env.local` file is all that is necessary.
 
 > Note: You should not commit your `.env` file or it will expose secrets that will allow others to control access to your various AI and authentication provider accounts.