diff --git a/.env.template b/.env.template
index f6b663a..e5439b0 100644
--- a/.env.template
+++ b/.env.template
@@ -1,2 +1,5 @@
-# copy to .env and place any needed secrets here. LLAMA_CLOUD_API_KEY will be automatically set
+# Copy to .env and add any secrets here.
+# Note: LLAMA_CLOUD_API_KEY does not need to be added here. This template has
+# `llama_cloud = true` set under [tool.llamadeploy] in pyproject.toml, so llamactl
+# will prompt you to log in and automatically inject the API key into your process.
 # OPENAI_API_KEY=sk-xxx