diff --git a/README_EXTERNALS.rst b/README_EXTERNALS.rst
index 82496dca62..47632f3111 100644
--- a/README_EXTERNALS.rst
+++ b/README_EXTERNALS.rst
@@ -30,10 +30,9 @@ More details on checkout_externals
 
 The file **Externals.cfg** in your top-level CTSM directory tells
 **checkout_externals** which tag/branch of each component should be
-brought in to generate your sandbox. (This file serves the same purpose
-as SVN_EXTERNAL_DIRECTORIES when CLM was in a subversion repository.)
+brought in to generate your sandbox. **Externals_CLM.cfg** is used similarly to point to the correct version of FATES (and possibly other CTSM-specific externals in the future); the below instructions referring to **Externals.cfg** also apply to modifying **Externals_CLM.cfg**.
 
-NOTE: Just like svn externals, checkout_externals will always attempt
+NOTE: checkout_externals will always attempt
 to make the working copy exactly match the externals description. If
 you manually modify an external without updating Externals.cfg, e.g. switch
 to a different tag, then rerunning checkout_externals will switch you
@@ -96,7 +95,7 @@ example below)::
   tag = cime5.4.0-alpha.20
   required = True
 
-Each entry specifies either a tag or a branch. To point to a new tag:
+Each entry specifies either a tag, a hash or a branch. To point to a new tag:
 
 #. Modify the relevant entry/entries in **Externals.cfg** (e.g., changing
    ``cime5.4.0-alpha.20`` to ``cime5.4.0-alpha.21`` above)
@@ -105,6 +104,10 @@ Each entry specifies either a tag or a branch. To point to a new tag:
 
      ./manage_externals/checkout_externals
 
+To point to a hash, the process is the same, except also change ``tag = ...`` to ``hash = ...``.
+
+To point to a branch, use ``branch = ...``. Pointing to a branch means that, each time you run ``manage_externals/checkout_externals`` you will get the current latest version of that branch. This can be convenient for in-progress development work, but should not be used when you need a stable version for scientific simulations. There are a number of gotchas with this workflow, so in general you should default to pointing to fixed hashes. (For CTSM master, we require a fixed hash or, usually, a tag.)
+
 Keep in mind that changing individual components from a tag may result
 in an invalid model (won't compile, won't run, not scientifically
 meaningful) and is unsupported.