diff --git a/LICENSE b/LICENSE
new file mode 100644
index 0000000..8937c42
--- /dev/null
+++ b/LICENSE
@@ -0,0 +1,27 @@
+Copyright (c) 2002-2007, Diomidis Spinellis
+All rights reserved.
+
+Redistribution and use in source and binary forms, with or without
+modification, are permitted provided that the following conditions are
+met:
+
+    * Redistributions of source code must retain the above copyright
+      notice, this list of conditions and the following disclaimer.
+    * Redistributions in binary form must reproduce the above copyright
+      notice, this list of conditions and the following disclaimer in the
+      documentation and/or other materials provided with the distribution.
+    * Neither the name of Diomidis Spinellis nor the names of its
+      contributors may be used to endorse or promote products derived from
+      this software without specific prior written permission.
+
+THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS
+"AS IS" AND ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT
+LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
+A PARTICULAR PURPOSE ARE DISCLAIMED. IN NO EVENT SHALL THE COPYRIGHT
+OWNER OR CONTRIBUTORS BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL,
+SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED
+TO, PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATA, OR
+PROFITS; OR BUSINESS INTERRUPTION) HOWEVER CAUSED AND ON ANY THEORY OF
+LIABILITY, WHETHER IN CONTRACT, STRICT LIABILITY, OR TORT (INCLUDING
+NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF THE USE OF THIS
+SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
diff --git a/Makefile b/Makefile
index 61151f6..9dbd0cf 100644
--- a/Makefile
+++ b/Makefile
@@ -21,9 +21,10 @@ TESTSRC = \
 	src/gr/spinellis/umlgraph/test/BasicTest.java
 PICFILE=sequence.pic
 README=README.txt
+LICENSE=LICENSE
 OTHERSRC=index.html build.xml Makefile
 # Files to tag
-ALLTAG=$(DOCLETSRC) $(TESTSRC) $(PICFILE) $(README) $(OTHERSRC)
+ALLTAG=$(DOCLETSRC) $(TESTSRC) $(PICFILE) $(README) $(LICENSE) $(OTHERSRC)
 # Documentation location (release)
 ifeq ($(VERSION),snapshot)
 	DOC=snapshot-doc
@@ -49,6 +50,7 @@ $(BALL_TAR_GZ): $(JARFILE) docs Makefile
 	mkdir $(DISTDIR)/doc
 	mkdir $(DISTDIR)/lib
 	$(LF) $(README) >$(DISTDIR)/$(README)
+	$(LF) $(LICENSE) >$(DISTDIR)/$(LICENSE)
 	$(LF) $(PICFILE) >$(DISTDIR)/lib/$(PICFILE)
 	cp $(JARFILE) $(DISTDIR)/lib
 	cp $(WEBDIR)/$(DOC)/* $(DISTDIR)/doc
diff --git a/doc/faq.xml b/doc/faq.xml
index e8892d0..640248c 100644
--- a/doc/faq.xml
+++ b/doc/faq.xml
@@ -25,6 +25,7 @@ To update the table of contents execute the following vim command from a registe
 <li> <a href="#tiger">Why doesn't UMLGraph run under Mac OS X?</a></li>
 <li> <a href="#cpp">Can I create UML class diagrams from C++ code?</a></li>
 <li> <a href="#ClassCastException">How can I get around a UMLGraphDoc crash with a ClassCastException?</a></li>
+<li> <a href="#license">Under what license is UMLGraph distributed?</a></li>
 </ul>
 
 <h2><a name="cmdline">What is the command line sequence to generate a UMLGraph class diagram?</a></h2>
@@ -199,4 +200,15 @@ JBuilder users need to go to Preferences/Build/Ant,
 and tick the box "Use project libraries when running ant" to solve the issue.
 </blockquote>
 
+<h2><a name="license">Under what license is UMLGraph distributed?</a></h2>
+UMLGraph is distributed under the
+<a href="http://www.opensource.org/licenses/bsd-license.html">BSD license</a>
+(see the file LICENSE in the distribution).
+For uniformity with the rest of the web content appearing on this site,
+the web site of UMLGraph appears under a
+<a href="http://creativecommons.org/licenses/by-nc-nd/2.5/">Creative Commons Attribution-NonCommercial-NoDerivs 2.5</a>
+license.
+This affects only the UMLGraph home page; all other material
+(for example the documentation) is also part of the UMLGraph distribution,
+and can therefore be used under the BSD license.
 </notes>