diff --git a/README.md b/README.md
index 91109f9688..529e7cdf0f 100644
--- a/README.md
+++ b/README.md
@@ -57,3 +57,31 @@ Deployment
 Just run `npm run build` and then mount the `vector` directory on your webserver to
 actually serve up the app, which is entirely static content.
 
+Enabling encryption
+===================
+
+End-to-end encryption in Vector and Matrix is not yet considered ready for
+day-to-day use; it is experimental and should be considered only as a
+proof-of-concept. See https://matrix.org/jira/browse/SPEC-162 for an overview
+of the current progress.
+
+To build a version of vector with support for end-to-end encryption, install
+the olm module with `npm i https://matrix.org/packages/npm/olm/olm-0.1.0.tgz`
+before running `npm start`. The olm library will be detected and used if
+available.
+
+To enable encryption for a room, type
+
+```
+/encrypt on
+```
+
+in the message bar in that room. Vector will then generate a set of keys, and
+encrypt all outgoing messages in that room. (Note that other people in that
+room will send messages in the clear unless they also `/encrypt on`.)
+
+Note that historical encrypted messages cannot currently be decoded - history
+is therefore lost when the page is reloaded.
+
+There is currently no visual indication of whether encryption is enabled for a
+room, or whether a particular message was encrypted.
diff --git a/webpack.config.js b/webpack.config.js
index 3c71ed368a..c19438a0df 100644
--- a/webpack.config.js
+++ b/webpack.config.js
@@ -2,6 +2,8 @@ var path = require('path');
 var webpack = require('webpack');
 var ExtractTextPlugin = require("extract-text-webpack-plugin");
 
+var olm_path = path.resolve('./node_modules/olm');
+
 module.exports = {
     module: {
         preLoaders: [
@@ -32,18 +34,40 @@ module.exports = {
             // alias any requires to the react module to the one in our path, otherwise
             // we tend to get the react source included twice when using npm link.
             react: path.resolve('./node_modules/react'),
+
+            // matrix-js-sdk will use olm if it is available,
+            // but does not explicitly depend on it. Pull it
+            // in from node_modules if it's there.
+            olm: olm_path,
         },
     },
     plugins: [
-        new webpack.IgnorePlugin(/^olm/),
         new webpack.DefinePlugin({
             'process.env': {
                 NODE_ENV: JSON.stringify(process.env.NODE_ENV)
             }
         }),
+
         new ExtractTextPlugin("bundle.css", {
             allChunks: true
-        })
+        }),
+
+        // olm.js includes "require 'fs'", which is never
+        // executed in the browser. Ignore it.
+        new webpack.IgnorePlugin(/^fs$/, /node_modules\/olm$/)
     ],
     devtool: 'source-map'
 };
+
+// ignore olm.js if it's not installed.
+(function() {
+    var fs = require('fs');
+    try {
+        fs.lstatSync(olm_path);
+        console.log("Olm is installed; including it in webpack bundle");
+    } catch (e) {
+        module.exports.plugins.push(
+            new webpack.IgnorePlugin(/^olm$/)
+        );
+    }
+}) ();