diff --git a/README.md b/README.md
index 8d0de6f8..9d5017dc 100644
--- a/README.md
+++ b/README.md
@@ -4,6 +4,15 @@ The MCP inspector is a developer tool for testing and debugging MCP servers.
 
 ![MCP Inspector Screenshot](https://raw.githubusercontent.com/modelcontextprotocol/inspector/main/mcp-inspector.png)
 
+## Architecture Overview
+
+The MCP Inspector consists of two main components that work together:
+
+- **MCP Inspector Client (MCPI)**: A React-based web UI that provides an interactive interface for testing and debugging MCP servers
+- **MCP Proxy (MCPP)**: A Node.js server that acts as a protocol bridge, connecting the web UI to MCP servers via various transport methods (stdio, SSE, streamable-http)
+
+Note that the proxy is not a network proxy for intercepting traffic. Instead, it functions as both an MCP client (connecting to your MCP server) and an HTTP server (serving the web UI), enabling browser-based interaction with MCP servers that use different transport protocols.
+
 ## Running the Inspector
 
 ### Requirements