diff --git a/docs/reference/builder.md b/docs/reference/builder.md
index 65f6e05f04..b0e40010f7 100644
--- a/docs/reference/builder.md
+++ b/docs/reference/builder.md
@@ -530,8 +530,10 @@ FROM extras:${CODE_VERSION}
 CMD  /code/run-extras
 ```
 
-To use the default value of an `ARG` declared before the first `FROM` use an
-`ARG` instruction without a value:
+An `ARG` declared before a `FROM` is outside of a build stage, so it
+can't be used in any instruction after a `FROM`. To use the default value of
+an `ARG` declared before the first `FROM` use an `ARG` instruction without
+a value inside of a build stage:
 
 ```Dockerfile
 ARG  SETTINGS=default