diff --git a/src/derivatives/introduction.md b/src/derivatives/introduction.md
index c18e8d5190..9cad29a14a 100644
--- a/src/derivatives/introduction.md
+++ b/src/derivatives/introduction.md
@@ -4,9 +4,30 @@ Derivatives are outputs of common processing pipelines, capturing data and
 meta-data sufficient for a researcher to understand and (critically) reuse those
 outputs in subsequent processing.
 Standardizing derivatives is motivated by use cases where formalized
-machine-readable access to processed data enables higher level processing.
+machine-readable access to processed data enables higher-level processing.
 
 The following sections cover additions to and divergences from "raw" BIDS.
+Raw data are data that have been curated into BIDS from a non-BIDS source.
+If a dataset is derived from at least one other valid BIDS dataset, then it is a derivative dataset.
+
+Examples:
+
+A defaced T1w image would typically be made during the curation process and is thus under raw
+
+```Text
+sourcedata/private/sub-01/anat/sub-01_T1w.nii.gz
+sub-01/anat/sub-01_T1w.nii.gz
+```
+
+A defaced T1w image could also, in theory, be derived from a BIDS dataset and would thus be under derivatives
+
+```Text
+sub-01/anat/sub-01_T1w.nii.gz
+derivatives/sub-01/anat/sub-01_desc-defaced_T1w.nii.gz
+```
+
+## Derivatives storage and directory structure
+
 Placement and naming conventions for derived datasets are addressed in
 [Storage of derived datasets][storage], and dataset-level metadata is included
 in [Derived dataset and pipeline description][derived-dataset-description].