diff --git a/.env.template b/.env.template
index f379fac6..84722c50 100644
--- a/.env.template
+++ b/.env.template
@@ -15,6 +15,14 @@
 ####################
 
 ## Main data folder
+## This can be a path to local folder or a path to an external location
+## depending on features enabled at build time. Possible external locations:
+##
+## - AWS S3 Bucket (via `s3` feature): s3://bucket-name/path/to/folder
+##
+## When using an external location, make sure to set TMP_FOLDER,
+## TEMPLATES_FOLDER, and DATABASE_URL to local paths and/or a remote database
+## location.
 # DATA_FOLDER=data
 
 ## Individual folders, these override %DATA_FOLDER%
@@ -22,10 +30,13 @@
 # ICON_CACHE_FOLDER=data/icon_cache
 # ATTACHMENTS_FOLDER=data/attachments
 # SENDS_FOLDER=data/sends
+
+## Temporary folder used for storing temporary file uploads
+## Must be a local path.
 # TMP_FOLDER=data/tmp
 
-## Templates data folder, by default uses embedded templates
-## Check source code to see the format
+## HTML template overrides data folder
+## Must be a local path.
 # TEMPLATES_FOLDER=data/templates
 ## Automatically reload the templates for every request, slow, use only for development
 # RELOAD_TEMPLATES=false
@@ -39,7 +50,9 @@
 #########################
 
 ## Database URL
-## When using SQLite, this is the path to the DB file, default to %DATA_FOLDER%/db.sqlite3
+## When using SQLite, this is the path to the DB file, and it defaults to
+## %DATA_FOLDER%/db.sqlite3. If DATA_FOLDER is set to an external location, this
+## must be set to a local sqlite3 file path.
 # DATABASE_URL=data/db.sqlite3
 ## When using MySQL, specify an appropriate connection URI.
 ## Details: https://docs.diesel.rs/2.1.x/diesel/mysql/struct.MysqlConnection.html