diff --git a/README.md b/README.md
index 8e94b83..36243c0 100644
--- a/README.md
+++ b/README.md
@@ -2,7 +2,7 @@
 
 > Professional Qt-based desktop application for intelligent drag-and-drop file handling between web applications and desktop clients (InDesign, Word, Notepad++, etc.)
 
-![Status](https://img.shields.io/badge/Status-Development-yellow) ![License](https://img.shields.io/badge/License-MIT-blue) ![Python](https://img.shields.io/badge/Python-3.10%2B-blue)
+![Status](https://img.shields.io/badge/Status-Pre--Release%20Phase%204-blue) ![License](https://img.shields.io/badge/License-MIT-blue) ![Python](https://img.shields.io/badge/Python-3.10%2B-blue)
 
 ## Overview
 
@@ -23,16 +23,20 @@ WebDrop Bridge embeds a web application in a Qt container with full filesystem a
 - ✅ **Embedded Web App** - QtWebEngine provides Chromium without browser limitations
 - ✅ **Drag Interception** - Converts text paths to native file operations
 - ✅ **Path Whitelist** - Security-conscious file system access control
+- ✅ **Configuration Management** - Profile-based settings with validation
+- ✅ **Settings Dialog** - Professional UI for path, URL, logging, and window configuration
+- ✅ **Auto-Update System** - Automatic release detection via Forgejo API
 - ✅ **Professional Build Pipeline** - MSI for Windows, DMG for macOS
-- ✅ **Comprehensive Testing** - Unit, integration, and end-to-end tests
+- ✅ **Comprehensive Testing** - Unit, integration, and end-to-end tests (80%+ coverage)
 - ✅ **CI/CD Ready** - GitHub Actions workflows included
+- ✅ **Structured Logging** - File-based logging with configurable levels
 
 ## Quick Start
 
 ### Requirements
 - Python 3.10+
 - Windows 10/11 or macOS 12+
-- 100 MB disk space
+- 200 MB disk space (includes Chromium from PyInstaller)
 
 ### Installation from Source
 
@@ -41,10 +45,11 @@ WebDrop Bridge embeds a web application in a Qt container with full filesystem a
 git clone https://github.com/yourusername/webdrop-bridge.git
 cd webdrop-bridge
 
-# Create virtual environment
+# Create and activate virtual environment
 python -m venv venv
-source venv/bin/activate  # macOS/Linux
-# venv\Scripts\activate  # Windows
+source venv/bin/activate          # macOS/Linux
+# venv\Scripts\activate.ps1       # Windows (PowerShell)
+# venv\Scripts\activate.bat       # Windows (cmd.exe)
 
 # Install dependencies
 pip install -r requirements.txt
@@ -60,14 +65,14 @@ python -m webdrop_bridge.main
 pip install -r requirements-dev.txt
 
 # Run tests
-pytest
+pytest tests -v
 
-# Run linting checks
-tox -e lint
+# Run all quality checks (lint, type, format)
+tox
 
-# Build for your platform
-tox -e build-windows   # Windows
-tox -e build-macos     # macOS
+# Build installers
+python build/scripts/build_windows.py          # Windows MSI
+bash build/scripts/build_macos.sh              # macOS DMG
 ```
 
 ## Project Structure
@@ -130,29 +135,86 @@ webdrop-bridge/
 
 ## Configuration
 
-Create `.env` file from `.env.example`:
+WebDrop Bridge supports two configuration methods:
+
+### 1. Settings Dialog (Recommended)
+Launch the application and access the Settings menu to configure:
+- **Paths Tab** - Add/remove allowed root directories
+- **URLs Tab** - Configure allowed web URLs (whitelist mode)
+- **Logging Tab** - Set log level and file location
+- **Window Tab** - Configure window dimensions
+- **Profiles Tab** - Save/load/export-import configuration profiles
+
+Profiles are saved in `~/.webdrop-bridge/profiles/`
+
+### 2. Environment Variables
+Create a `.env` file in the project root. Available settings:
 
 ```bash
-cp .env.example .env
-```
+# Application
+APP_NAME=WebDrop Bridge
+APP_VERSION=1.0.0
 
-Key settings:
-- `WEBAPP_URL` - Local or remote web app URL
-- `ALLOWED_ROOTS` - Comma-separated whitelist of allowed directories
-- `LOG_LEVEL` - DEBUG, INFO, WARNING, ERROR
-- `WINDOW_WIDTH` / `WINDOW_HEIGHT` - Initial window size
+# Paths (comma-separated)
+ALLOWED_ROOTS=Z:/,C:/Users/Public
+
+# Web URLs (empty = no restriction, items = kiosk mode)
+ALLOWED_URLS=
+
+# Interface
+WEBAPP_URL=file:///./webapp/index.html
+WINDOW_WIDTH=1024
+WINDOW_HEIGHT=768
+
+# Logging
+LOG_LEVEL=INFO
+ENABLE_LOGGING=true
+```
 
 ## Testing
 
-- Unit tests: `pytest tests/unit/ -v`
-- Integration tests: `pytest tests/integration/ -v`
-- Coverage: `pytest --cov=src/webdrop_bridge`
+WebDrop Bridge includes comprehensive test coverage with unit, integration, and end-to-end tests.
 
-Integration tests for the update workflow are in [tests/integration/test_update_flow.py](tests/integration/test_update_flow.py).
+```bash
+# Run all tests
+pytest tests -v
+
+# Run with coverage report
+pytest tests --cov=src/webdrop_bridge --cov-report=html
+
+# Run specific test categories
+pytest tests/unit -v                    # Unit tests only
+pytest tests/integration -v             # Integration tests only
+
+# Run specific test
+pytest tests/unit/test_validator.py -v
+
+# Run tests matching a pattern
+pytest tests -k "config" -v
+```
+
+**Test Coverage**: 
+- Current target: 80%+
+- Coverage report: `htmlcov/index.html`
+
+Integration tests cover:
+- Drag-and-drop workflow
+- Update flow and release detection
+- End-to-end application scenarios
 
 ## Auto-Update System
 
-WebDrop Bridge supports automatic updates via the Forgejo Releases API. See [docs/ARCHITECTURE.md](docs/ARCHITECTURE.md) for technical details.
+WebDrop Bridge includes an intelligent auto-update system that:
+
+- **Automatic Detection**: Periodically checks Forgejo/GitHub releases API
+- **Smart Caching**: Avoids redundant network calls with smart caching
+- **User Notification**: Alerts users of available updates via UI
+- **Release Notes**: Displays release notes and changes
+- **Safe Deployment**: Only triggers on newer versions
+
+The update system is fully integrated with the application and runs in the background without blocking the UI.
+
+For technical details, see [docs/ARCHITECTURE.md](docs/ARCHITECTURE.md#update-system).
 
 ## Changelog
 
@@ -160,23 +222,52 @@ See [CHANGELOG.md](CHANGELOG.md) for release notes.
 
 ## Building Installers
 
-### Windows MSI
+### Windows MSI Installer
 
 ```bash
-pip install pyinstaller
+# Simple build (creates standalone .exe)
 python build/scripts/build_windows.py
+
+# Build with MSI installer
+python build/scripts/build_windows.py --msi
+
+# Build and sign executable
+python build/scripts/build_windows.py --sign
 ```
 
-Output: `build/dist/WebDropBridge.exe`
+Output:
+- Standalone executable: `build/dist/windows/WebDropBridge.exe` (~195 MB)
+- Optional MSI installer: `build/dist/windows/WebDropBridge.msi`
+- SHA256 checksum: `build/dist/windows/WebDropBridge.exe.sha256`
 
-### macOS DMG
+### macOS DMG Installer
 
 ```bash
-pip install pyinstaller
+# Build DMG (requires macOS)
 bash build/scripts/build_macos.sh
+
+# Build with code signing
+SIGN_APP=true bash build/scripts/build_macos.sh
+
+# Build with notarization
+NOTARIZE_APP=true bash build/scripts/build_macos.sh
 ```
 
-Output: `build/dist/WebDropBridge.dmg`
+Output:
+- DMG installer: `build/dist/macos/WebDropBridge.dmg`
+- App bundle: `build/dist/macos/WebDropBridge.app`
+
+### Creating Releases
+
+For Forgejo/GitHub releases:
+
+```bash
+# Windows - Create release with executable
+powershell -ExecutionPolicy Bypass -File build/scripts/create_release.ps1
+
+# macOS - Create release with DMG
+bash build/scripts/create_release.sh
+```
 
 ## Development Workflow
 
@@ -249,13 +340,35 @@ MIT License - see [LICENSE](LICENSE) file for details
 - Inspired by professional desktop integration practices
 - Special thanks to the Qt community
 
+## Development Status
+
+**Current Phase**: Phase 4.3 - Advanced Configuration & Testing
+
+**Completed**:
+- ✅ Phase 1: Core Components (Validator, Config, Drag Interceptor, Main Window)
+- ✅ Phase 2: UI Implementation (Settings Dialog, Main Window UI Components)
+- ✅ Phase 3: Build & Distribution (Windows MSI, macOS DMG, Release Scripts)
+- ✅ Phase 4.1: Update System (Auto-update, Forgejo API integration)
+- ✅ Phase 4.2: Web App Improvements (Modern UI, Drag-drop testing)
+- ✅ Phase 4.3: Advanced Configuration (Profiles, Validation, Settings UI)
+
+**In Progress/Planned**:
+- Phase 4.4: Performance optimization & security hardening
+- Phase 5: Release candidates & final testing
+- v1.0: Stable Windows & macOS release
+
 ## Roadmap
 
-- [ ] v1.0 - Stable Windows & macOS release
-- [ ] v1.1 - Advanced filtering and logging UI
+- [x] Core drag-drop functionality
+- [x] Configuration management with profiles
+- [x] Auto-update system
+- [x] Professional build pipeline
+- [x] Comprehensive test suite
+- [ ] Performance benchmarking & optimization
+- [ ] Security audit & hardening
+- [ ] v1.1 - Advanced filtering and extended logging
 - [ ] v1.2 - API for custom handlers
 - [ ] v2.0 - Plugin architecture
-- [ ] v2.1 - Cloud storage integration (OneDrive, Google Drive)
 
 ## Support
 
@@ -265,4 +378,4 @@ MIT License - see [LICENSE](LICENSE) file for details
 
 ---
 
-**Status**: Alpha Development | **Last Updated**: January 2026
+**Development Phase**: Pre-Release Phase 4.3 | **Last Updated**: February 2026 | **Python**: 3.10+ | **Qt**: PySide6 (Qt 6)