diff --git a/module/zstd/README.md b/module/zstd/README.md
index 7ad00e0bd..df8b1b77a 100644
--- a/module/zstd/README.md
+++ b/module/zstd/README.md
@@ -1,11 +1,11 @@
-# ZSTD-On-ZFS Library Manual
+# Zstd-On-ZFS Library Manual
 
 ## Introduction
 
-This subtree contains the ZSTD library used in ZFS. It is heavily cut-down by
+This subtree contains the Zstd library used in ZFS. It is heavily cut-down by
 dropping any unneeded files, and combined into a single file, but otherwise is
 intentionally unmodified. Please do not alter the file containing the zstd
-library, besides upgrading to a newer ZSTD release.
+library, besides upgrading to a newer Zstd release.
 
 Tree structure:
 
@@ -14,25 +14,43 @@ Tree structure:
 * `zstd-in.c` is our template file for generating the single-file library
 * `include/`: This directory contains supplemental includes for platform
   compatibility, which are not expected to be used by ZFS elsewhere in the
-  future. Thus we keep them private to ZSTD.
+  future. Thus we keep them private to Zstd.
 
-## Updating ZSTD
+## Zstd update policy
 
-To update ZSTD the following steps need to be taken:
+Since the exact compressed byte stream may change between Zstd versions, updates
+should follow this policy:
 
-1. Grab the latest release of [ZSTD](https://github.com/facebook/zstd/releases).
+1. Zstd may be updated, as needed, after a new .0 release is tagged.
+2. Critical patches may be applied up until the next release freeze,
+   _potentially_ even updating to a newer upstream version.
+3. The Zstd version will not be upgraded within a major release.
+4. Multiple Zstd versions are not supported concurrently within a release.
+5. The library import commit must be a clean, unmodified upstream import. Any
+   OpenZFS-specific integration or local adjustments go into follow-up commits.
+6. Release notes should highlight Zstd updates and any expected impact (e.g.
+   changes in compression ratio/performance, and differences in compressed byte
+   streams which may affect deduplication or NOP writes).
+
+## Updating Zstd
+
+To update Zstd the following steps need to be taken:
+
+1. Grab the latest release of [Zstd](https://github.com/facebook/zstd/releases).
 2. Copy the files output by the following script to `module/zstd/lib/`:
-`grep include [path to zstd]/contrib/single_file_libs/zstd-in.c  | awk '{ print $2 }'`
+   ```
+   grep include [path to zstd]/build/single_file_libs/zstd-in.c | awk '{ print $2 }'
+   ```
 3. Remove debug.c, threading.c, and zstdmt_compress.c.
 4. Update Makefiles with resulting file lists.
-5. Follow symbol renaming notes in `include/zstd_compat_wrapper.h`
+5. Follow symbol renaming notes in `include/zstd_compat_wrapper.h`.
 
-## Altering ZSTD and breaking changes
+## Altering Zstd and breaking changes
 
-If ZSTD made changes that break compatibility or you need to make breaking
-changes to the way we handle ZSTD, it is required to maintain backwards
+If Zstd made changes that break compatibility or you need to make breaking
+changes to the way we handle Zstd, it is required to maintain backwards
 compatibility.
 
-We already save the ZSTD version number within the block header to be used
+We already save the Zstd version number within the block header to be used
 to add future compatibility checks and/or fixes. However, currently it is
 not actually used in such a way.