diff --git a/docs/configuration/environment.md b/docs/configuration/environment.md
index a978db6a3f40..1a4e995fdc04 100644
--- a/docs/configuration/environment.md
+++ b/docs/configuration/environment.md
@@ -83,11 +83,13 @@ In addition, uv respects the following environment variables:
   can be set to a mirror URL to use a different source for Python installations. The provided URL
   will replace `https://github.com/indygreg/python-build-standalone/releases/download` in, e.g.,
   `https://github.com/indygreg/python-build-standalone/releases/download/20240713/cpython-3.12.4%2B20240713-aarch64-apple-darwin-install_only.tar.gz`.
+  Distributions can be read from a local directory by using the `file://` URL scheme.
 - `UV_PYPY_INSTALL_MIRROR`: Managed PyPy installations are downloaded from
   [python.org](https://downloads.python.org/). This variable can be set to a mirror URL to use a
   different source for PyPy installations. The provided URL will replace
   `https://downloads.python.org/pypy` in, e.g.,
-  `https://downloads.python.org/pypy/pypy3.8-v7.3.7-osx64.tar.bz2`.
+  `https://downloads.python.org/pypy/pypy3.8-v7.3.7-osx64.tar.bz2`. Distributions can be read from a
+  local directory by using the `file://` URL scheme.
 - `XDG_CONFIG_HOME`: Used to specify the path to uv user-level configuration directory on Unix
   systems.
 - `XDG_CACHE_HOME`: Used to specify the directory where uv stores cache files on Unix systems.