diff --git a/README.md b/README.md
index d47b479a078619814288a35ef4677658af8b78cc..b07ce85d912bcd7568eb76f4c1909773123cef82 100644
--- a/README.md
+++ b/README.md
@@ -610,3 +610,31 @@ that collects the full model on the CPU and then saves it in a single
 checkpoint file which can then be loaded in a single process. Keep in
 mind that this way of checkpointing is slower and limited by CPU
 memory.
+
+### HSDP
+
+"Hybrid sharded data parallel" is a way to reduce communication in
+FSDP training when your model does not need to be split across all
+processes. This is achieved by creating independent replicas/copies of
+the fully sharded model and feeding them distinct data, just like how
+DDP does it. Similarly, the gradients obtained by these replicas on
+the different input batches are averaged across the replicas. HSDP is
+thus a combination of FSDP and DDP. Usually, it is recommended to use
+as many replicas as nodes, so that the model is only sharded inside
+nodes, but your mileage may vary. Especially if the model becomes too
+large, you will have to split it up further than is possible on just
+one node.
+
+Communication is reduced because we do not have to execute the
+expensive collect-discard steps for each FSDP unit's sharded
+parameters across all processes; we only execute these expensive steps
+in the limited number of shards per replica and execute a less
+expensive gradient averaging step across the processes instead.
+Additionally, communication inside a node is usually much faster than
+across nodes, meaning we keep the expensive communication where
+bandwidth is higher and the less expensive communication where
+bandwidth is lower.
+
+To enable HSDP, pass a number of desired FSDP replicas using the
+`--num-fsdp-replicas` argument. If this argument is not given,
+standard FSDP is used.