diff --git a/README.md b/README.md
index 79d55b2..e2f2942 100644
--- a/README.md
+++ b/README.md
@@ -1,38 +1,81 @@
 # rescript-zed
 
-ReScript support for [Zed](https://zed.dev) editor.
+ReScript support for the [Zed](https://zed.dev) editor.
 
 This extension plugs in the following projects:
 
-- [tree-sitter-rescript](https://github.com/rescript-lang/tree-sitter-rescript) parser
-- [@rescript/language-server](https://github.com/rescript-lang/rescript-vscode) LSP
+- [tree-sitter-rescript](https://github.com/rescript-lang/tree-sitter-rescript)
+  parser
+- [@rescript/language-server](https://www.npmjs.com/package/@rescript/language-server)
+  LSP
 
-## Settings
+## Installing the language server
 
-```json
+The stable server is the default language server used by this extension. It uses
+the pre-v2 versions of `@rescript/language-server`, and the extension installs
+and updates that package automatically.
+
+Use `settings.version` when you need to pin a specific npm version. If it is
+omitted, Zed installs the latest published stable version.
+
+> [!NOTE]
+> The experimental server is the v2 language server published to npm under the
+> `dev` tag. Pin the package to the current `dev` version. See the version
+> history on
+> [npm](https://www.npmjs.com/package/@rescript/language-server?activeTab=versions).
+
+> [!TIP]
+> You can install the language server globally with
+> `npm i -g @rescript/language-server@dev` and set the binary path.
+>
+> ```json
+> {
+>   "lsp": {
+>     "rescript-language-server": {
+>       "binary": {
+>         "path": "rescript-language-server"
+>       }
+>     }
+>   }
+> }
+> ```
+
+### Settings
+
+```jsonc
+{
   "lsp": {
     "rescript-language-server": {
+      // Server configuration for pre-v2 should be passed through initialization_options
       "initialization_options": {
         "extensionConfiguration": {
-          "askToStartBuild": false
-        }
+          "askToStartBuild": false,
+        },
       },
       "settings": {
-        "version": "1.71.0-next-441959d.0"
-      }
-    }
+        "version": "1.71.0-next-441959d.0",
+        // Server configuration for v2 should be passed through settings.rescript
+        "rescript": {
+          "hover": {
+            "supportMarkdownLinks": true,
+          },
+        },
+      },
+    },
   },
+}
 ```
 
-`initialization_options` are passed to the language server when it is started. They can be used to configure the language server. See [extensionConfiguration](https://github.com/rescript-lang/rescript-vscode/blob/441959d1feeaaffc1a589687758b1fbe1f649e72/server/src/config.ts#L5-L29)
-
-`settings` are specific to the Zed extension.
-With `version` you can point to a specific npm version of the [@rescript/language-server](https://www.npmjs.com/package/@rescript/language-server?activeTab=versions).
+`initialization_options` are passed to the language server (pre-v2) when it is started.
+They can be used to configure the language server. See
+[extensionConfiguration](https://github.com/rescript-lang/rescript-vscode/blob/441959d1feeaaffc1a589687758b1fbe1f649e72/server/src/config.ts#L5-L29)
 
 ## Developing
 
-See [CONTRIBUTING.md](CONTRIBUTING.md) for instructions on how to develop this extension locally.
+See [CONTRIBUTING.md](CONTRIBUTING.md) for instructions on how to develop this
+extension locally.
 
 ## Acknowledgements
 
-This project was originally created by [humaans](https://github.com/humaans/). We're grateful for their initial work in bringing ReScript support to Zed.
+This project was originally created by [humaans](https://github.com/humaans/).
+We're grateful for their initial work in bringing ReScript support to Zed.
diff --git a/src/rescript.rs b/src/rescript.rs
index 9234f4e..3724675 100644
--- a/src/rescript.rs
+++ b/src/rescript.rs
@@ -118,8 +118,8 @@ impl zed::Extension for ReScriptExtension {
     ) -> Result<zed::Command> {
         let server_path = self.server_script_path(server_id, worktree)?;
 
-        let current_dir = env::current_dir()
-            .map_err(|e| format!("failed to get current directory: {e}"))?;
+        let current_dir =
+            env::current_dir().map_err(|e| format!("failed to get current directory: {e}"))?;
 
         Ok(zed::Command {
             command: zed::node_binary_path()?,
@@ -151,6 +151,17 @@ impl zed::Extension for ReScriptExtension {
             }
         })))
     }
+
+    fn language_server_workspace_configuration(
+        &mut self,
+        language_server_id: &zed::LanguageServerId,
+        worktree: &zed::Worktree,
+    ) -> Result<Option<zed::serde_json::Value>> {
+        match zed::settings::LspSettings::for_worktree(language_server_id.as_ref(), worktree) {
+            Ok(LspSettings { settings, .. }) => Ok(settings),
+            Err(_) => Ok(None),
+        }
+    }
 }
 
 zed::register_extension!(ReScriptExtension);