diff --git a/api/README.md b/api/README.md
index 8e87c8115740..8597611218b8 100644
--- a/api/README.md
+++ b/api/README.md
@@ -6,6 +6,7 @@ The project assumes the following tools installed:
 - [Python](https://www.python.org/downloads/). Any version allowed by `requires-python` in `pyproject.toml` is supported.
 - [GNU Make](https://www.gnu.org/software/make/).
 - Docker or a compatible tool like [Podman](https://podman.io/). We recommend [OrbStack](https://orbstack.dev/) for macOS.
+- A Python [virtual environment](https://docs.python.org/3/tutorial/venv.html#creating-virtual-environments) is created and activated.
 
 To install dev dependencies, run `make install`. Only Flagsmith maintainers can run `uv lock` due to private dependencies.