diff --git a/doc/update.md b/doc/update.md
index cdb5179..cfbd686 100644
--- a/doc/update.md
+++ b/doc/update.md
@@ -108,11 +108,73 @@ Please be advised that you lose your settings in files such as gitlab.yml, unico
 You will have to [configure those settings in /etc/gitlab/gitlab.rb](https://gitlab.com/gitlab-org/omnibus-gitlab/blob/master/README.md#configuration).
 SMTP is not supported in omnibus-gitlab at this time.
 
-### Upgrading from non-Omnibus PostgreSQL to an Omnibus installation
+### Upgrading from non-Omnibus PostgreSQL to an Omnibus installation using a backup
 Upgrade by [creating a backup from the non-Omnibus install](https://gitlab.com/gitlab-org/gitlab-ce/blob/master/doc/raketasks/backup_restore.md#create-a-backup-of-the-gitlab-system) and [restoring this in the Omnibus installation](https://gitlab.com/gitlab-org/omnibus-gitlab/blob/master/README.md#restoring-an-application-backup).
 Please ensure you are using exactly equal versions of GitLab (for example 6.7.3) when you do this.
 You might have to upgrade your non-Omnibus installation before creating the backup to achieve this.
 
+### Upgrading from non-Omnibus PostgreSQL to an Omnibus installation in-place
+It is also possible to upgrade a source GitLab installation to omnibus-gitlab
+in-place.  Below we assume you are using PostgreSQL on Ubuntu, and that you
+have an omnibus-gitlab package matching your current GitLab version.  We also
+assume that your source installation of GitLab uses all the default paths and
+users.
+
+First, stop and disable GitLab, Redis and Nginx.
+
+```
+# Ubuntu
+sudo service gitlab stop
+sudo update-rc.d gitlab disable
+
+sudo service nginx stop
+sudo update-rc.d nginx disable
+
+sudo service redis-server stop
+sudo update-rc.d redis-server disable
+```
+
+Next, create a `gitlab.rb` file for your new setup.
+
+```
+sudo mkdir /etc/gitlab
+sudo tee -a /etc/gitlab/gitlab.rb <<'EOF'
+# Use your own GitLab URL here
+external_url 'http://gitlab.example.com'
+
+# We assume your repositories are in /home/git/repositories (default for source installs)
+git_data_dir '/home/git'
+
+# Re-use the Postgres that is already running on your system
+postgresql['enable'] = false
+# This db_host setting is for Debian Postgres packages
+gitlab_rails['db_host'] = '/var/run/postgresql/'
+gitlab_rails['db_port'] = 5432
+# We assume you called the GitLab DB user 'git'
+gitlab_rails['db_username'] = 'git'
+EOF
+```
+
+Now install the omnibus-gitlab package and run `sudo gitlab-ctl reconfigure`.
+
+You are not done yet! The `gitlab-ctl reconfigure` run has changed the home
+directory of the git user, so OpenSSH can no longer find its authorized_keys
+file. Rebuild the keys file with the following command:
+
+```
+sudo gitlab-rake gitlab:shell:setup
+```
+
+You should now have HTTP and SSH access to your GitLab server with the
+repositories and users that were there before.
+
+If you can log into the GitLab web interface, the next step is to reboot your
+server to make sure none of the old services interferes with omnibus-gitlab.
+
+If you are using special features such as LDAP you will have to put your
+settings in gitlab.rb; see the [omnibus-gitlab
+README](https://gitlab.com/gitlab-org/omnibus-gitlab/blob/master/README.md#configuration).
+
 ### Upgrading from non-Omnibus MySQL to an Omnibus installation (version 6.8+)
 Unlike the previous chapter, the non-Omnibus installation is using MySQL while the Omnibus installation is using PostgreSQL.
 
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