diff --git a/docs/INSTALLING.md b/docs/INSTALLING.md
index 8d341b8b..f9700eda 100644
--- a/docs/INSTALLING.md
+++ b/docs/INSTALLING.md
@@ -2,6 +2,32 @@
 
 Complete installation guide for all platforms.
 
+## Components Overview
+
+Beads has several components - here's what they are and when you need them:
+
+| Component | What It Is | When You Need It |
+|-----------|------------|------------------|
+| **bd CLI** | Core command-line tool | Always - this is the foundation |
+| **Claude Code Plugin** | Slash commands + enhanced UX | Optional - if you want `/bd-ready`, `/bd-create` commands |
+| **MCP Server (beads-mcp)** | Model Context Protocol interface | Only for MCP-only environments (Claude Desktop, Amp) |
+
+**How they relate:**
+- The **bd CLI** is the core - install it first via Homebrew, npm, or script
+- The **Plugin** enhances Claude Code with slash commands but *requires* the CLI installed
+- The **MCP server** is an *alternative* to the CLI for environments without shell access
+
+**Typical setups:**
+
+| Environment | What to Install |
+|-------------|-----------------|
+| Claude Code, Cursor, Windsurf | bd CLI (+ optional Plugin for Claude Code) |
+| Claude Desktop (no shell) | MCP server only |
+| Terminal / scripts | bd CLI only |
+| CI/CD pipelines | bd CLI only |
+
+**Are they mutually exclusive?** No - you can have CLI + Plugin + MCP all installed. They don't conflict. But most users only need the CLI.
+
 ## Quick Install (Recommended)
 
 ### Homebrew (macOS/Linux)