diff --git a/CHANGELOG.md b/CHANGELOG.md
index e1e6002..0ec6514 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,6 +1,9 @@
 MumbleDJ Changelog
 ==================
 
+### October 13, 2014
+* Added `SETUP.md` which contains a guide on how to configure MumbleDJ and install its dependencies.
+
 ### October 7, 2014
 * Made user skip message show even when the target number of skips has been reached.
 * Made "Music" the default Mumble channel.
diff --git a/README.md b/README.md
index 110e58e..edf6e57 100644
--- a/README.md
+++ b/README.md
@@ -20,7 +20,7 @@ These are features that would be cool to have, but might not ever make it into t
 * Statistics tracking.
 
 ## Setup
-This section will be updated when the project is near completion.
+Since the setup process is a bit extensive, the setup guide can be found in [SETUP.md](https://github.com/matthieugrieger/mumbledj/blob/master/SETUP.md).
 
 ## Dependencies
 * [OpenSSL](http://www.openssl.org/)
diff --git a/SETUP.md b/SETUP.md
new file mode 100644
index 0000000..ea2a930
--- /dev/null
+++ b/SETUP.md
@@ -0,0 +1,103 @@
+MumbleDJ Setup Guide
+====================
+This setup guide is written for installation on an Ubuntu-based system. If I ever get the time I may also write a setup guide for Fedora and Arch Linux as I have gotten them to work on those distros as well.
+
+**NOTE:** This installation guide is written from memory so if there is something wrong, please let me know!
+
+## Installing Dependencies
+This is the bulk of the setup process. Most of the dependencies can be installed with the following `apt-get` commands:
+
+```
+$ sudo add-apt-repository ppa:mc3man/trusty-media
+$ sudo apt-get update
+$ sudo apt-get install protobuf-c-compiler libprotobuf-c0-dev lua5.2 liblua5.2-dev libvorbis-dev libssl-dev libev-dev python-pip ffmpeg
+```
+
+Then just install the python module `pafy` with `pip`:
+
+```
+$ sudo pip install pafy
+```
+
+The rest of the dependencies will have to be compiled from source. First we will compile and install `protobuf` and `protobuf-c`.
+
+### protobuf & protobuf-c
+
+```
+$ wget https://protobuf.googlecode.com/svn/rc/protobuf-2.6.0.tar.gz
+$ tar xzf protobuf-2.6.0.tar.gz
+$ cd protobuf-2.6.0
+$ ./configure && make && sudo make install && cd ..
+$ wget https://github.com/protobuf-c/protobuf-c/releases/download/v1.0.2/protobuf-c-1.0.2.tar.gz
+$ tar xzf protobuf-c-1.0.2.tar.gz
+$ cd protobuf-c-1.0.2
+$ ./configure && make && sudo make install && cd ..
+```
+
+You have now (hopefully) successfully installed `protobuf` and `protobuf-c`. Now we will install `jshon`, which is required for `piepan`.
+
+### jshon and jansson
+
+`jshon` depends on `jansson`, so we will compile and install that beforehand.
+
+```
+$ wget http://www.digip.org/jansson/releases/jansson-2.7.tar.gz
+$ tar xzf jansson-2.7.tar.gz
+$ rm jansson-2.7.tar.gz
+$ cd jansson-2.7.tar.gz
+$ ./configure && make && sudo make install && cd ..
+$ wget http://kmkeen.com/jshon/jshon.tar.gz
+$ tar xzf jshon.tar.gz
+$ cd jshon-*
+$ make && sudo cp jshon /usr/local/bin && cd ..
+```
+
+Cool, we now have the necessary dependencies installed to compile `piepan`. We will now install `piepan`.
+
+### piepan
+
+```
+$ sudo ldconfig
+$ git clone https://github.com/layeh/piepan.git
+$ cd piepan
+$ make
+```
+
+Then `cp` the `piepan` executable into your bot's directory or `/usr/local/bin`.
+
+**NOTE:** If your system cannot find `lua` on your system and complains of `pkg-config` stuff, try the following "fix":
+
+```
+$ cd piepan
+$ make clean
+$ nano Makefile
+```
+
+Replace the first like of the `Makefile` with the following:
+
+```
+CFLAGS = `pkg-config --libs --cflags libssl lua5.2 libprotobuf-c opus vorbis vorbisfile` -lev -pthread
+```
+
+If you recompile piepan it *should* work now.
+
+
+## Configuring & Running MumbleDJ
+Now we're ready to finally use MumbleDJ! First clone the MumbleDJ project.
+
+```
+$ git clone https://github.com/matthieugrieger/mumbledj
+```
+
+Within the `mumbledj` directory you will see another directory inside named `mumbledj`. Open that directory and edit `config.lua` to your liking.
+
+When you're ready to use the bot, just use the following command (this assumes that the `piepan` executable is in the `mumbledj/mumbledj` directory):
+
+```
+./piepan -u NAME_OF_BOT -s SERVER_IP mumbledj.lua
+```
+
+
+####All done!
+
+