diff --git a/config/database.yml.env b/config/database.yml.env
index b2ff23cb5ab..1e35651c9a6 100644
--- a/config/database.yml.env
+++ b/config/database.yml.env
@@ -1,9 +1,17 @@
 <%= ENV['RAILS_ENV'] %>:
+  ## Connection information
+  # Please be aware that the DATABASE_URL environment variable will take
+  # precedence over the following 6 parameters. For more information, see
+  # doc/administration/environment_variables.md
   adapter: <%= ENV['GITLAB_DATABASE_ADAPTER'] || 'postgresql' %>
-  encoding: <%= ENV['GITLAB_DATABASE_ENCODING'] || 'unicode' %>
   database: <%= ENV['GITLAB_DATABASE_DATABASE'] || "gitlab_#{ENV['RAILS_ENV']}" %>
-  pool: <%= ENV['GITLAB_DATABASE_POOL'] || '10' %>
   username: <%= ENV['GITLAB_DATABASE_USERNAME'] || 'root' %>
   password: <%= ENV['GITLAB_DATABASE_PASSWORD'] || '' %>
   host: <%= ENV['GITLAB_DATABASE_HOST'] || 'localhost' %>
   port: <%= ENV['GITLAB_DATABASE_PORT'] || '5432' %>
+
+  ## Behavior information
+  # The following parameters will be used even if you're using the DATABASE_URL
+  # environment variable.
+  encoding: <%= ENV['GITLAB_DATABASE_ENCODING'] || 'unicode' %>
+  pool: <%= ENV['GITLAB_DATABASE_POOL'] || '10' %>
diff --git a/doc/administration/environment_variables.md b/doc/administration/environment_variables.md
index 0faef526d43..43ab153d76d 100644
--- a/doc/administration/environment_variables.md
+++ b/doc/administration/environment_variables.md
@@ -1,56 +1,61 @@
 # Environment Variables
 
-## Introduction
+GitLab exposes certain environment variables which can be used to override
+their defaults values.
 
-Commonly people configure GitLab via the gitlab.rb configuration file in the Omnibus package.
+People usually configure GitLab via `/etc/gitlab/gitlab.rb` for Omnibus
+installations, or `gitlab.yml` for installations from source.
 
-But if you prefer to use environment variables we allow that too.
+Below you will find the supported environment variables which you can use to
+override certain values.
 
 ## Supported environment variables
 
-Variable | Type | Explanation
+Variable | Type | Description
 -------- | ---- | -----------
-GITLAB_ROOT_PASSWORD | string | sets the password for the `root` user on installation
-GITLAB_HOST | url | hostname of the GitLab server includes http or https
-RAILS_ENV | production / development / staging / test | Rails environment
-DATABASE_URL | url | For example: postgresql://localhost/blog_development?pool=5
-GITLAB_EMAIL_FROM | email | Email address used in the "From" field in mails sent by GitLab
-GITLAB_EMAIL_DISPLAY_NAME | string | Name used in the "From" field in mails sent by GitLab
-GITLAB_EMAIL_REPLY_TO | email | Email address used in the "Reply-To" field in mails sent by GitLab
-GITLAB_UNICORN_MEMORY_MIN | integer | The minimum memory threshold (in bytes) for the Unicorn worker killer
-GITLAB_UNICORN_MEMORY_MAX | integer | The maximum memory threshold (in bytes) for the Unicorn worker killer
+`GITLAB_ROOT_PASSWORD`      | string | Sets the password for the `root` user on installation
+`GITLAB_HOST`               | string | The full URL of the GitLab server (including `http://` or `https://`)
+`RAILS_ENV`                 | string | The Rails environment; can be one of `production`, `development`, `staging` or `test`
+`DATABASE_URL`              | string | The database URL; is of the form: `postgresql://localhost/blog_development`
+`GITLAB_EMAIL_FROM`         | string | The e-mail address used in the "From" field in e-mails sent by GitLab
+`GITLAB_EMAIL_DISPLAY_NAME` | string | The name used in the "From" field in e-mails sent by GitLab
+`GITLAB_EMAIL_REPLY_TO`     | string | The e-mail address used in the "Reply-To" field in e-mails sent by GitLab
+`GITLAB_UNICORN_MEMORY_MIN` | integer | The minimum memory threshold (in bytes) for the Unicorn worker killer
+`GITLAB_UNICORN_MEMORY_MAX` | integer | The maximum memory threshold (in bytes) for the Unicorn worker killer
 
 ## Complete database variables
 
-As explained in the [Heroku documentation](https://devcenter.heroku.com/articles/rails-database-connection-behavior) the DATABASE_URL doesn't let you set:
+The recommended way of specifying your database connection information is to set
+the `DATABASE_URL` environment variable. This variable only holds connection
+information (`adapter`, `database`, `username`, `password`, `host` and `port`),
+but not behavior information (`encoding`, `pool`). If you don't want to use
+`DATABASE_URL` and/or want to set database behavior information, you will have
+to either:
 
-- adapter
-- database
-- username
-- password
-- host
-- port
+- copy our template file: `cp config/database.yml.env config/database.yml`, or
+- set a value for some `GITLAB_DATABASE_XXX` variables
 
-To do so please `cp config/database.yml.env config/database.yml` and use the following variables:
+The list of `GITLAB_DATABASE_XXX` variables that you can set is:
 
-Variable | Default
---- | ---
-GITLAB_DATABASE_ADAPTER | postgresql
-GITLAB_DATABASE_ENCODING | unicode
-GITLAB_DATABASE_DATABASE | gitlab_#{ENV['RAILS_ENV']
-GITLAB_DATABASE_POOL | 10
-GITLAB_DATABASE_USERNAME | root
-GITLAB_DATABASE_PASSWORD |
-GITLAB_DATABASE_HOST | localhost
-GITLAB_DATABASE_PORT | 5432
+Variable | Default value | Overridden by `DATABASE_URL`?
+-------- | ------------- | -----------------------------
+`GITLAB_DATABASE_ADAPTER`   | `postgresql` (for MySQL use `mysql2`) | Yes
+`GITLAB_DATABASE_DATABASE`  | `gitlab_#{ENV['RAILS_ENV']`           | Yes
+`GITLAB_DATABASE_USERNAME`  | `root`                                | Yes
+`GITLAB_DATABASE_PASSWORD`  | None                                  | Yes
+`GITLAB_DATABASE_HOST`      | `localhost`                           | Yes
+`GITLAB_DATABASE_PORT`      | `5432`                                | Yes
+`GITLAB_DATABASE_ENCODING`  | `unicode`                             | No
+`GITLAB_DATABASE_POOL`      | `10`                                  | No
 
 ## Adding more variables
 
 We welcome merge requests to make more settings configurable via variables.
-Please make changes in the file config/initializers/1_settings.rb
-Please stick to the naming scheme "GITLAB_#{name 1_settings.rb in upper case}".
+Please make changes in the `config/initializers/1_settings.rb` file and stick
+to the naming scheme `GITLAB_#{name in 1_settings.rb in upper case}`.
 
 ## Omnibus configuration
 
-It's possible to preconfigure the GitLab image by adding the environment variable: `GITLAB_OMNIBUS_CONFIG` to docker run command.
+It's possible to preconfigure the GitLab docker image by adding the environment
+variable `GITLAB_OMNIBUS_CONFIG` to the `docker run` command.
 For more information see the ['preconfigure-docker-container' section in the Omnibus documentation](http://doc.gitlab.com/omnibus/docker/#preconfigure-docker-container).