diff --git a/Developer-Guide.md b/Developer-Guide.md
index 1920ab8e69..0c27562b6b 100644
--- a/Developer-Guide.md
+++ b/Developer-Guide.md
@@ -2,17 +2,22 @@
 * [Assumptions](#assumptions)
 * [Build and install the Kata Containers runtime](#build-and-install-the-kata-containers-runtime)
     * [Check hardware requirements](#check-hardware-requirements)
-    * [Disable initrd](#disable-initrd)
+    * [Configure to use initrd or rootfs image](#configure-to-use-initrd-or-rootfs-image)
     * [Enable full debug](#enable-full-debug)
 * [Build and install Kata proxy](#build-and-install-kata-proxy)
 * [Build and install Kata shim](#build-and-install-kata-shim)
-* [Create an image](#create-an-image)
+* [Create and install rootfs and initrd image](#create-and-install-rootfs-and-initrd-image)
     * [Build a custom Kata agent - OPTIONAL](#build-a-custom-kata-agent---optional)
     * [Get the osbuilder](#get-the-osbuilder)
     * [Create a rootfs image](#create-a-rootfs-image)
+        * [Create a local rootfs](#create-a-local-rootfs)
         * [Add a custom agent to the image - OPTIONAL](#add-a-custom-agent-to-the-image---optional)
-    * [Build the image](#build-the-image)
-* [Install the image](#install-the-image)
+        * [Build a rootfs image](#build-a-rootfs-image)
+        * [Install the rootfs image](#install-the-rootfs-image)
+    * [Create an initrd image - OPTIONAL](#create-an-initrd-image---optional)
+        * [Create a local rootfs for initrd image](#create-a-local-rootfs-for-initrd-image)
+        * [Build an initrd image](#build-an-initrd-image)
+        * [Install the initrd image](#install-the-initrd-image)
 * [Install guest kernel images](#install-guest-kernel-images)
 * [Update Docker configuration](#update-docker-configuration)
 * [Create a Kata Container](#create-a-kata-container)
@@ -63,15 +68,29 @@ $ sudo kata-runtime kata-check
 
 If your system is *not* able to run Kata Containers, the previous command will error and explain why.
 
-## Disable initrd
+## Configure to use initrd or rootfs image
 
-Unless you use an initial ramdisk (`initrd` or `initramfs`):
+Kata containers can run with either an initrd image or a rootfs image.
+
+If you want to test with `initrd`, make sure you have `initrd = /usr/share/kata-containers/kata-containers-initrd.img`
+in `/usr/share/defaults/kata-containers/configuration.toml` and remove the `image` line with the following:
 
 ```
-$ sudo sed -i 's/^\(initrd.*\)/# \1/g' /usr/share/defaults/kata-containers/configuration.toml
+$ sudo sed -i 's/^\(image =.*\)/# \1/g' /usr/share/defaults/kata-containers/configuration.toml
 ```
+You can create the initrd image as shown in the [create an initrd image](#create-an-initrd-image---optional) secion.
 
-If you use an initial ramdisk, see https://github.com/kata-containers/osbuilder.
+If you test with a rootfs `image`, make sure you have `image = /usr/share/kata-containers/kata-containers.img`
+in `/usr/share/defaults/kata-containers/configuration.toml` and remove the `initrd` line with the following:
+
+```
+$ sudo sed -i 's/^\(initrd =.*\)/# \1/g' /usr/share/defaults/kata-containers/configuration.toml
+```
+The rootfs image is created as shown in the [create a rootfs image](#create-a-rootfs-image) secion.
+
+One of the `initrd` and `image` options in kata runtime config file **MUST** be set but **not both**.
+The main difference between the options is that the size of `initrd`(10MB+) is significantly smaller than
+rootfs `image`(100MB+).
 
 ## Enable full debug
 
@@ -96,7 +115,7 @@ $ go get -d -u github.com/kata-containers/shim
 $ cd $GOPATH/src/github.com/kata-containers/shim && make && sudo make install
 ```
 
-# Create an image
+# Create and install rootfs and initrd image
 
 ## Build a custom Kata agent - OPTIONAL
 
@@ -116,11 +135,14 @@ $ go get -d -u github.com/kata-containers/osbuilder
 ```
 
 ## Create a rootfs image
-
+### Create a local rootfs
 ```
+$ export ROOTFS_DIR=${GOPATH}/src/github.com/kata-containers/osbuilder/rootfs-builder/rootfs
+$ rm -rf ${ROOTFS_DIR}
 $ cd $GOPATH/src/github.com/kata-containers/osbuilder/rootfs-builder
-$ script -fec 'sudo -E GOPATH=$GOPATH USE_DOCKER=true ./rootfs.sh clearlinux'
+$ script -fec 'sudo -E GOPATH=$GOPATH USE_DOCKER=true ./rootfs.sh ${distro}'
 ```
+You MUST choose one of `alpine`, `centos`, `clearlinux`, `euleros`, and `fedora` for `${distro}`.
 
 > **Note:**
 >
@@ -135,16 +157,16 @@ $ script -fec 'sudo -E GOPATH=$GOPATH USE_DOCKER=true ./rootfs.sh clearlinux'
 > - You only do this step if you test with the latest version of the agent.
 
 ```
-$ sudo install -o root -g root -m 0550 -t rootfs/bin ../../agent/kata-agent
-$ sudo install -o root -g root -m 0440 ../../agent/kata-agent.service rootfs/usr/lib/systemd/system/
-$ sudo install -o root -g root -m 0440 ../../agent/kata-containers.target rootfs/usr/lib/systemd/system/
+$ sudo install -o root -g root -m 0550 -t ${ROOTFS_DIR}/bin ../../agent/kata-agent
+$ sudo install -o root -g root -m 0440 ../../agent/kata-agent.service ${ROOTFS_DIR}/usr/lib/systemd/system/
+$ sudo install -o root -g root -m 0440 ../../agent/kata-containers.target ${ROOTFS_DIR}/usr/lib/systemd/system/
 ```
 
-## Build the image
+### Build a rootfs image
 
 ```
 $ cd $GOPATH/src/github.com/kata-containers/osbuilder/image-builder
-$ script -fec 'sudo -E USE_DOCKER=true ./image_builder.sh ../rootfs-builder/rootfs'
+$ script -fec 'sudo -E USE_DOCKER=true ./image_builder.sh ${ROOTFS_DIR}'
 ```
 
 > **Notes:**
@@ -156,7 +178,8 @@ $ script -fec 'sudo -E USE_DOCKER=true ./image_builder.sh ../rootfs-builder/root
 >   variable in the previous command and ensure the `qemu-img` command is
 >   available on your system.
 
-# Install the image
+
+### Install the rootfs image
 
 ```
 $ commit=$(git log --format=%h -1 HEAD)
@@ -166,6 +189,41 @@ $ sudo install -o root -g root -m 0640 -D kata-containers.img "/usr/share/kata-c
 $ (cd /usr/share/kata-containers && sudo ln -sf "$image" kata-containers.img)
 ```
 
+## Create an initrd image - OPTIONAL
+### Create a local rootfs for initrd image
+```
+$ export ROOTFS_DIR="${GOPATH}/src/github.com/kata-containers/osbuilder/rootfs-builder/rootfs"
+$ rm -rf ${ROOTFS_DIR}
+$ cd $GOPATH/src/github.com/kata-containers/osbuilder/rootfs-builder
+$ script -fec 'sudo -E GOPATH=$GOPATH AGENT_INIT=yes USE_DOCKER=true ./rootfs.sh ${distro}'
+```
+`AGENT_INIT` controls if the guest image uses kata agent as the guest `init` process. When you create an initrd image,
+always set `AGENT_INIT` to `yes`.
+
+You MUST choose one of `alpine`, `centos`, `clearlinux`, `euleros`, and `fedora` for `${distro}`.
+
+Optionally, add your custom agent binary to the rootfs with the following:
+```
+$ sudo install -o root -g root -m 0550 -T ../../agent/kata-agent ${ROOTFS_DIR}/sbin/init
+```
+
+### Build an initrd image
+
+```
+$ cd $GOPATH/src/github.com/kata-containers/osbuilder/initrd-builder
+$ script -fec 'sudo -E AGENT_INIT=yes USE_DOCKER=true ./initrd_builder.sh ${ROOTFS_DIR}'
+```
+
+### Install the initrd image
+
+```
+$ commit=$(git log --format=%h -1 HEAD)
+$ date=$(date +%Y-%m-%d-%T.%N%z)
+$ image="kata-containers-initrd-${date}-${commit}"
+$ sudo install -o root -g root -m 0640 -D kata-containers-initrd.img "/usr/share/kata-containers/${image}"
+$ (cd /usr/share/kata-containers && sudo ln -sf "$image" kata-containers-initrd.img)
+```
+
 # Install guest kernel images
 
 ```
@@ -178,6 +236,11 @@ $ sudo ln -s /usr/share/clear-containers/vmlinuz.container /usr/share/kata-conta
 > - The files in the previous commands are from the Clear Containers
 >   `linux-container` package. See [Assumptions](#assumptions).
 
+If you want to use an initrd image, install the [hyperstart](https://github.com/hyperhq/hyperstart/) kernel instead:
+```
+$ sudo wget -O /usr/share/kata-containers/vmlinuz.container https://github.com/hyperhq/hyperstart/raw/master/build/arch/x86_64/kernel
+```
+
 # Update Docker configuration
 
 ```