diff --git a/README.md b/README.md
index a763396..7289a1e 100644
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+++ b/README.md
@@ -85,6 +85,56 @@ src/
 └── App.tsx          # Root component
 ```
 
+## Environment Variables
+
+The application requires several environment variables to function correctly. Create a `.env` file in the root directory based on `.env.example`:
+
+### Required Variables
+
+#### `NEXT_PUBLIC_SUPABASE_URL`
+- **Purpose:** Base URL for your Supabase project
+- **Format:** `https://your-project-id.supabase.co`
+- **How to get:** Navigate to your [Supabase project settings](https://app.supabase.com) → Settings → API → Project URL
+- **Example:** `https://mxadgucxhmstlzsbgmoz.supabase.co`
+
+#### `NEXT_PUBLIC_SUPABASE_ANON_KEY`
+- **Purpose:** Anonymous/public key for client-side Supabase authentication
+- **Format:** Long alphanumeric string (JWT token)
+- **How to get:** Navigate to your [Supabase project settings](https://app.supabase.com) → Settings → API → Project API keys → `anon` `public`
+- **Security:** Safe to use in client-side code (public key)
+
+#### `NEXT_PUBLIC_GA_TRACKING_ID`
+- **Purpose:** Google Analytics 4 tracking ID for analytics
+- **Format:** `G-XXXXXXXXXX`
+- **How to get:** Create a GA4 property in [Google Analytics](https://analytics.google.com) → Admin → Data Streams → Web → Measurement ID
+- **Optional:** Can be omitted if you don't want analytics tracking
+
+#### `NEXT_PUBLIC_SITE_URL`
+- **Purpose:** The public URL where your site is hosted (used for SEO, canonical URLs, and sitemap generation)
+- **Format:** `https://your-domain.com` (no trailing slash)
+- **Examples:**
+  - Production: `https://damjan-savic.com`
+  - Development: `http://localhost:3000`
+- **Note:** Update this when deploying to production
+
+### Setup Instructions
+
+1. Copy the example environment file:
+   ```bash
+   cp .env.example .env
+   ```
+
+2. Fill in your actual values in the `.env` file
+
+3. Restart your development server after changing environment variables
+
+### Important Notes
+
+- All variables prefixed with `NEXT_PUBLIC_` are exposed to the browser
+- Never commit your `.env` file to version control (it's in `.gitignore`)
+- For production deployment, set these variables in your hosting platform's environment settings
+- The `.env.example` file shows the required format and should be kept updated
+
 ## Development
 
 ```bash