diff --git a/README.md b/README.md
index 3faa542..dd811e3 100644
--- a/README.md
+++ b/README.md
@@ -393,6 +393,15 @@ sed(/.*DELETE_THIS_LINE.*\n/, '', 'source.js');
 Reads an input string from `files` and performs a JavaScript `replace()` on the input
 using the given search regex and replacement string or function. Returns the new string after replacement.
 
+Note:
+
+Like unix `sed`, ShellJS `sed` supports capture groups. Capture groups are specified
+using the `$n` syntax:
+
+```javascript
+sed(/(\w+)\s(\w+)/, '$2, $1', 'file.txt');
+```
+
 
 ### sort([options,] file [, file ...])
 ### sort([options,] file_array)
diff --git a/src/sed.js b/src/sed.js
index 590ba74..dfdc0a7 100644
--- a/src/sed.js
+++ b/src/sed.js
@@ -25,6 +25,15 @@ common.register('sed', _sed, {
 //@
 //@ Reads an input string from `files` and performs a JavaScript `replace()` on the input
 //@ using the given search regex and replacement string or function. Returns the new string after replacement.
+//@
+//@ Note:
+//@
+//@ Like unix `sed`, ShellJS `sed` supports capture groups. Capture groups are specified
+//@ using the `$n` syntax:
+//@
+//@ ```javascript
+//@ sed(/(\w+)\s(\w+)/, '$2, $1', 'file.txt');
+//@ ```
 function _sed(options, regex, replacement, files) {
   // Check if this is coming from a pipe
   var pipe = common.readFromPipe();