diff --git a/docs/docs/config.mdx b/docs/docs/config.mdx
index e1a1c8f2f..a1ff0c0aa 100644
--- a/docs/docs/config.mdx
+++ b/docs/docs/config.mdx
@@ -21,6 +21,8 @@ wsh editconfig
 
 :::
 
+## Configuration Keys
+
 | Key Name                           | Type     | Function                                                                                                                                                                                                                                                      |
 | ---------------------------------- | -------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
 | ai:preset                          | string   | the default AI preset to use                                                                                                                                                                                                                                  |
@@ -172,3 +174,100 @@ wsh editconfig termthemes.json
 | background          | CSS color |          |          | background color (default when no color code is applied), must have alpha channel (#rrggbbaa) if you want the terminal to be transparent |
 | cursorAccent        | CSS color |          |          | color for cursor                                                                                                                         |
 | selectionBackground | CSS color |          |          | background color for selected text                                                                                                       |
+
+## Presets
+
+Presets can be used to apply multiple setting overrides to either a tab or a block. They are currently supported in two scenarios: tab backgrounds and AI models.
+
+You can set presets either by placing them in `~/.config/waveterm/presets.json` or by placing them in a JSON file in the `~/.config/waveterm/presets/` directory. All presets will be aggregated regardless of which file they're placed in so you can use the `presets` directory to organize them as you see fit.
+
+### File format
+
+Presets follow the following format:
+
+```json
+{
+	...
+	"<preset-type>@<preset-key>": {
+		"display:name": "<Preset name>",
+		"display:order": "<number>", // optional
+		"<overridden-config-key-1>": "<overridden-config-value-1>"
+		...
+	}
+}
+```
+
+A complete example of a preset for a tab background is the following:
+
+```json
+{
+  "bg@rainbow": {
+    "display:name": "Rainbow",
+    "display:order": 2.1,
+    "bg:*": true,
+    "bg": "linear-gradient( 226.4deg,  rgba(255,26,1,1) 28.9%, rgba(254,155,1,1) 33%, rgba(255,241,0,1) 48.6%, rgba(34,218,1,1) 65.3%, rgba(0,141,254,1) 80.6%, rgba(113,63,254,1) 100.1% )",
+    "bg:opacity": 0.3
+  }
+}
+```
+
+A complete example of a preset for an AI model is the following:
+
+```json
+{
+  "ai@wave": {
+    "display:name": "Ollama - llama3.1",
+    "display:order": 0,
+    "ai:baseurl": "http://localhost:11434",
+    "ai:model": "llama3.1:latest"
+  }
+}
+```
+
+### Preset type
+
+The type of the preset determines where it can be discovered in the app. Currently, the two types that will be discovered in the app are `bg` and `ai`.
+
+`bg` will be served in the "Backgrounds" submenu of the Tab context menu (which can be found by right-clicking on a tab).
+
+![screenshot showing the default options in the backgrounds submenu of the tab context menu](./img/backgrounds-menu.png)
+
+`ai` will be served in the models dropdown in the block header of the "Wave AI" widget.
+
+![screenshot showing the default options in the models dropdown in the block header of the "Wave AI" widget](./img/waveai-model-dropdown.png)
+
+### Available configuration keys
+
+The following configuration keys are available for use in presets:
+
+#### AI configurations:
+
+| Key Name      | Type   | Function                                                                         |
+| ------------- | ------ | -------------------------------------------------------------------------------- |
+| ai:preset     | string | the default AI preset to use                                                     |
+| ai:baseurl    | string | Set the AI Base Url (must be OpenAI compatible)                                  |
+| ai:apitoken   | string | your AI api token                                                                |
+| ai:apitype    | string | defaults to "open_ai", but can also set to "azure" for special Azure AI handling |
+| ai:name       | string | string to display in the Wave AI block header                                    |
+| ai:model      | string | model name to pass to API                                                        |
+| ai:apiversion | string | for Azure AI only (when apitype is "azure", this will default to "2023-05-15")   |
+| ai:orgid      | string |                                                                                  |
+| ai:maxtokens  | int    | max tokens to pass to API                                                        |
+| ai:timeoutms  | int    | timeout (in milliseconds) for AI calls                                           |
+
+#### Background configurations:
+
+| Key Name             | Type   | Function                                                                                        |
+| -------------------- | ------ | ----------------------------------------------------------------------------------------------- |
+| bg:opacity           | float  | the opacity of the background                                                                   |
+| bg:blendmode         | string | the [blend mode](https://developer.mozilla.org/en-US/docs/Web/CSS/blend-mode) of the background |
+| bg:bordercolor       | string | the color of the border                                                                         |
+| bg:activebordercolor | string | the color of the border when a block is active                                                  |
+
+#### Clear key
+
+Configs in a preset are applied in order to override the default config values, which will persist for the remainder of the tab or block's lifetime. Setting `bg:*` or `ai:*` to `"true"` will clear the values of any previously overridden Background or AI configurations, respectively, setting them back to their defaults.
+
+#### Unset a default value
+
+To unset a default value in a preset, add an override that sets it to an empty string, like `""`.
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