diff --git a/Modules/ExternalProject.cmake b/Modules/ExternalProject.cmake
index 325fbc398af0158c06ccf12b0ab0e042ba332935..c3fd3c65bfc8aeafabb93cdb1de0571db9cb504a 100644
--- a/Modules/ExternalProject.cmake
+++ b/Modules/ExternalProject.cmake
@@ -174,7 +174,10 @@ Create custom targets to build projects in external trees
   Install step options are:
 
   ``INSTALL_DIR <dir>``
-    Installation prefix
+    Installation prefix to be placed in the ``<INSTALL_DIR>`` placeholder.
+    This does not actually configure the external project to install to
+    the given prefix.  That must be done by passing appropriate arguments
+    to the external project configuration step, e.g. using ``<INSTALL_DIR>``.
   ``INSTALL_COMMAND <cmd>...``
     Command to drive installation of the external project after it has been
     built.  This only happens at the *build* time of the calling project.