diff --git a/Formula/z.rb b/Formula/z.rb
index c344aa7ce0..3a2e248875 100644
--- a/Formula/z.rb
+++ b/Formula/z.rb
@@ -13,16 +13,22 @@ class Z < Formula
   end
 
   def caveats; <<-EOS.undent
-    For Bash, put something like this in your $HOME/.bashrc:
+    For Bash or Zsh, put something like this in your $HOME/.bashrc or $HOME/.zshrc:
 
      . `brew --prefix`/etc/profile.d/z.sh
 
-    For Zsh, put something like this in your $HOME/.zshrc:
+     ZSH USERS BACKWARD COMPATIBILITY WARNING:
+     z now handles 'precmd' set up for zsh. z (<=1.2) users using zsh should
+     remove the precmd function that was described in the installation
+     instructions for previous versions.
 
-     . `brew --prefix`/etc/profile.d/z.sh
-     function precmd () {
-       z --add "$(pwd -P)"
-     }
+     In short, this:
+        . /path/to/z.sh
+        function precmd () {
+         _z --add "$(pwd -P)"
+        }
+     should now just be:
+        . `brew --prefix`/etc/profile.d/z.sh
     EOS
   end
 end