diff --git a/README.md b/README.md
index 0a4daa3..2dc017b 100644
--- a/README.md
+++ b/README.md
@@ -5,10 +5,146 @@ A simple internal API to track shopping list items using SQLite and FastAPI.
 ## Setup
 
 ```bash
+# Install dependencies
 pip install -r requirements.txt
+
+# Run the server
 uvicorn main:app --reload
 ```
 
-## API
+The API will be available at http://localhost:8000.
 
-Endpoints will be documented after implementation.
+## Database
+
+SQLite database file: `shopping.db` (created automatically on first startup).
+
+Schema:
+
+- `products` (id, name, sku?, created_at)
+- `lists` (id, name, created_at)
+- `list_items` (id, list_id, product_id, quantity, added_at; foreign keys with cascade)
+
+## API Reference
+
+### Root
+
+**GET /**  
+Returns a welcome message.
+
+Response:
+```json
+{ "message": "Shopping List API" }
+```
+
+### Products
+
+**POST /products**  
+Create a product.
+
+Body:
+```json
+{ "name": "string", "sku": "optional string" }
+```
+
+**GET /products**  
+List all products.
+
+**GET /products/{id}**  
+Get a product by ID.
+
+**DELETE /products/{id}**  
+Delete a product.
+
+### Lists
+
+**POST /lists**  
+Create a shopping list.
+
+Body:
+```json
+{ "name": "string" }
+```
+
+**GET /lists**  
+List all lists.
+
+**GET /lists/{id}**  
+Get a list with its items (includes product details in items).
+
+**DELETE /lists/{id}**  
+Delete a list (cascades to items).
+
+### List Items
+
+**POST /lists/{list_id}/items**  
+Add a product to a list.
+
+Body:
+```json
+{ "product_id": 1, "quantity": 2 }
+```
+
+**PATCH /lists/{list_id}/items/{item_id}**  
+Update the quantity of an item in a list.
+
+Body:
+```json
+{ "quantity": 5 }
+```
+
+**DELETE /lists/{list_id}/items/{item_id}**  
+Remove an item from a list.
+
+**GET /lists/{list_id}/items**  
+List items in a list (includes product name and sku).
+
+## Manual Testing
+
+You can use curl or any HTTP client.
+
+Example flow:
+
+```bash
+# Create products
+curl -X POST http://localhost:8000/products -H "Content-Type: application/json" -d '{"name":"Paper Plates","sku":"PP-001"}'
+curl -X POST http://localhost:8000/products -H "Content-Type: application/json" -d '{"name":"Bread"}'
+
+# Create a list
+curl -X POST http://localhost:8000/lists -H "Content-Type: application/json" -d '{"name":"Picnic List"}'
+
+# Add items to the list (use IDs from previous responses)
+curl -X POST http://localhost:8000/lists/1/items -H "Content-Type: application/json" -d '{"product_id":1,"quantity":2}'
+curl -X POST http://localhost:8000/lists/1/items -H "Content-Type: application/json" -d '{"product_id":2,"quantity":1}'
+
+# Get list with items
+curl http://localhost:8000/lists/1
+
+# Update quantity
+curl -X PATCH http://localhost:8000/lists/1/items/1 -H "Content-Type: application/json" -d '{"quantity":5}'
+
+# List items in list
+curl http://localhost:8000/lists/1/items
+
+# Delete item
+curl -X DELETE http://localhost:8000/lists/1/items/2
+
+# Delete list (cascades)
+curl -X DELETE http://localhost:8000/lists/1
+```
+
+## Running Tests
+
+```bash
+pytest test_main.py
+```
+
+Tests cover:
+- Root endpoint
+- Product CRUD
+- List CRUD
+- List items management (add, update, delete, cascade)
+
+## Notes
+
+- This is an internal API; security/auth not implemented.
+- For production use, add proper error handling, validation, and possibly a connection pool.