diff --git a/doc/ref/configuration/master.rst b/doc/ref/configuration/master.rst
index d390a413c7..27195586cd 100644
--- a/doc/ref/configuration/master.rst
+++ b/doc/ref/configuration/master.rst
@@ -2339,8 +2339,19 @@ There are additional details at :ref:`salt-pillars`
 Default: ``False``
 
 This option allows for external pillar sources to be evaluated before
-:conf_master:`pillar_roots`. This allows for targeting file system pillar from
-ext_pillar.
+:conf_master:`pillar_roots`. External pillar data is evaluated separately from
+:conf_master:`pillar_roots` pillar data, and then both sets of pillar data are
+merged into a single pillar dictionary, so the value of this config option will
+have an impact on which key "wins" when there is one of the same name in both
+the external pillar data and :conf_master:`pillar_roots` pillar data. By
+setting this option to ``True``, ext_pillar keys will be overridden by
+:conf_master:`pillar_roots`, while leaving it as ``False`` will allow
+ext_pillar keys to override those from :conf_master:`pillar_roots`.
+
+.. note::
+    For a while, this config option did not work as specified above, because of
+    a bug in Pillar compilation. This bug has been resolved in version 2016.3.4
+    and later.
 
 .. code-block:: yaml