diff --git a/railties/guides/source/rails_application_templates.textile b/railties/guides/source/rails_application_templates.textile
index 3db47a70e8..90fc763349 100644
--- a/railties/guides/source/rails_application_templates.textile
+++ b/railties/guides/source/rails_application_templates.textile
@@ -11,22 +11,18 @@ endprologue.
 
 h3. Usage
 
-To apply a template, you need to provide the Rails generator with the location of the template you wish to apply, using -m option:
+To apply a template, you need to provide the Rails generator with the location of the template you wish to apply, using -m option. This can either be path to a file or a URL.
 
 <shell>
 $ rails new blog -m ~/template.rb
+$ rails new blog -m http://example.com/template.rb
 </shell>
 
-It's also possible to apply a template using a URL:
-
-<shell>
-$ rails new blog -m https://gist.github.com/755496.txt
-</shell>
-
-Alternatively, you can use the rake task +rails:template+ to apply a template to an existing Rails application:
+You can use the rake task +rails:template+ to apply templates to an existing Rails application. The location of the template needs to be passed in to an environment variable named LOCATION. Again, this can either be path to a file or a URL.
 
 <shell>
 $ rake rails:template LOCATION=~/template.rb
+$ rake rails:template LOCATION=http://example.com/template.rb
 </shell>
 
 h3. Template API