diff --git a/README.md b/README.md
index aab2930..372fb6d 100644
--- a/README.md
+++ b/README.md
@@ -54,11 +54,19 @@ See [examples.md](examples.md) for complete analysis examples.
    pip install -e .
    ```
 
-4. Set your Anthropic API key:
+4. Set your Anthropic API key, either as a shell environment variable:
    ```bash
    export ANTHROPIC_API_KEY=your-api-key-here
    ```
 
+   ...or in a `.env` file in the project root (loaded automatically on startup):
+   ```bash
+   echo "ANTHROPIC_API_KEY=your-api-key-here" > .env
+   ```
+
+   Variables already set in the shell environment take precedence over the
+   `.env` file. The `.env` file is git-ignored, so your key won't be committed.
+
 ## Usage
 
 Analyze one or more RPG source files:
@@ -160,7 +168,7 @@ pytest --cov=rpg_explainer
 
 | Variable | Description | Required |
 |----------|-------------|----------|
-| `ANTHROPIC_API_KEY` | Your Anthropic API key | Yes |
+| `ANTHROPIC_API_KEY` | Your Anthropic API key (via shell export or a `.env` file) | Yes |
 | `RPG_TREESITTER_LIB` | Custom path to compiled Tree-sitter library | No (defaults to `build/languages.so`) |
 
 ## How It Works
diff --git a/src/rpg_explainer/cli.py b/src/rpg_explainer/cli.py
index 17d4411..36b0d9b 100644
--- a/src/rpg_explainer/cli.py
+++ b/src/rpg_explainer/cli.py
@@ -6,6 +6,7 @@
 from pathlib import Path
 
 import click
+from dotenv import load_dotenv
 
 from . import __version__
 
@@ -78,6 +79,10 @@ def main(
 
         rpg-explain program.rpgle --json > index.json
     """
+    # Load variables from a .env file (e.g. ANTHROPIC_API_KEY) if present.
+    # Values already set in the environment take precedence and are not overridden.
+    load_dotenv()
+
     # Check if Tree-sitter library is built
     if not check_treesitter_library():
         print_error("Tree-sitter RPG library not found.")