diff --git a/README.rst b/README.rst
index 075cdad..e54b069 100644
--- a/README.rst
+++ b/README.rst
@@ -75,6 +75,13 @@ and is available in Django 1.6+. If you do not set a value, it will default to `
 which is Django's historical behavior of using a new database connection on each
 request. Use ``None`` for unlimited persistent connections.
 
+Strings passed to `dj_database_url` must be valid URLs; in
+particular, special characters must be url-encoded. The following url will raise
+a `ValueError`::
+    postgres://user:p#ssword!@localhost/foobar
+and should instead be passed as::
+    postgres://user:p%23ssword!@localhost/foobar
+
 URL schema
 ----------