diff --git a/packages/create-block/CHANGELOG.md b/packages/create-block/CHANGELOG.md
index 87eb7d387faa3..a8d54848ad791 100644
--- a/packages/create-block/CHANGELOG.md
+++ b/packages/create-block/CHANGELOG.md
@@ -3,7 +3,8 @@
 ## Unreleased
 
 ### New Features
--	Add `slugPascalCase` to the list of variables that can be used in templates ([#35462](https://github.com/WordPress/gutenberg/pull/35462))
+-   Add passing local directories to --template. ([#35645](https://github.com/WordPress/gutenberg/pull/35645))
+-   Add `slugPascalCase` to the list of variables that can be used in templates ([#35462](https://github.com/WordPress/gutenberg/pull/35462))
 
 ## 2.5.0 (2021-07-21)
 
diff --git a/packages/create-block/README.md b/packages/create-block/README.md
index 12dd8f2567d1f..2ae2ad98590d1 100644
--- a/packages/create-block/README.md
+++ b/packages/create-block/README.md
@@ -40,7 +40,7 @@ Options:
 
 ```bash
 -V, --version                output the version number
--t, --template <name>        block template type name, allowed values: "es5", "esnext", or the name of an external npm package (default: "esnext")
+-t, --template <name>        block template type name, allowed values: "es5", "esnext", the name of an external npm package (default: "esnext"), or the path to a local directory.
 --namespace <value>          internal namespace for the block name
 --title <value>              display title for the block
 --short-description <value>  short description for the block
@@ -65,7 +65,13 @@ $ npx @wordpress/create-block
 $ npx @wordpress/create-block --template es5
 ```
 
-3. Help – you need to use `npx` to output usage information.
+3. Local template directory – it is also possible to pick a local directory as a template.
+
+```bash
+$ npx @wordpress/create-block --template ./path/to/template
+```
+
+4. Help – you need to use `npx` to output usage information.
 
 ```bash
 $ npx @wordpress/create-block --help