diff --git a/README.md b/README.md
index 3447461b..d3e9a2f8 100644
--- a/README.md
+++ b/README.md
@@ -67,7 +67,7 @@ There are three options for local setup:
 
 - [Docker](/docs/setup/docker_setup.md) (recommended)
 - Native (coming soon)
-- AWS Virtual Machine (coming soon)
+- [AWS Virtual Machine](/docs/setup/aws_vm_setup.md)
 
 ## Finding An Issue
 * Now you have everything setup, you will need to find issues to work on. **Operation Code** uses Github's built in issue tracker. A listing of all our issues can be found [here](https://github.com/OperationCode/operationcode_backend/issues).
diff --git a/docs/setup/aws_vm_setup.md b/docs/setup/aws_vm_setup.md
new file mode 100644
index 00000000..06960bd3
--- /dev/null
+++ b/docs/setup/aws_vm_setup.md
@@ -0,0 +1,66 @@
+# Virtual Machine
+
+A virtual machine is defined as a computer file, typically called an image, that behaves like an actual computer.
+
+## Create AWS VM
+(Using Ubuntu 16.04 on AWS)
+Make sure to open these ports in your security group
+- Port 22
+- Port 3000
+When the VM spins up, SSH into it.
+
+##
+(from your VM)
+Fork https://github.com/operationcode/operationcode_backend
+
+```bash
+git clone https://github.com/[YOUR-GITHUB-NAME]/operationcode_backend.git
+
+cd operationcode_backend
+
+git remote add upstream https://github.com/OperationCode/operationcode_backend.git
+
+sudo apt-get install make
+```
+
+## Install Docker
+```bash
+sudo apt-get update
+
+sudo apt-get install \
+    apt-transport-https \
+    ca-certificates \
+    curl \
+    software-properties-common
+
+curl -fsSL https://download.docker.com/linux/ubuntu/gpg | sudo apt-key add -
+
+sudo add-apt-repository \
+   "deb [arch=amd64] https://download.docker.com/linux/ubuntu \
+   $(lsb_release -cs) \
+   stable"
+
+sudo apt-get update
+
+sudo apt-get install docker-ce
+```
+
+## Install Docker Compose
+
+```bash
+sudo curl -L https://github.com/docker/compose/releases/download/1.19.0/docker-compose-`uname -s`-`uname -m` -o /usr/local/bin/docker-compose
+sudo chmod +x /usr/local/bin/docker-compose
+```
+
+## Setting up the Dev Environment
+```bash
+sudo make setup
+```
+
+(if you want to try running the tests, run this command)
+
+```bash
+sudo make test
+```
+
+Now navigate to http://<vm_public_ip>:3000 and you should see the "You're running on Rails" page!