diff --git a/docs/api/config/image-upload-url.md b/docs/api/config/image-upload-url.md
index 761b8c8..9a43aa3 100644
--- a/docs/api/config/image-upload-url.md
+++ b/docs/api/config/image-upload-url.md
@@ -10,6 +10,18 @@ description: You can learn about the imageUploadUrl config in the documentation
 
 @short: Optional. Specifies the URL which will be used for image upload
 
+When the property is set, RichText uploads each inserted image to the given endpoint (via toolbar, menubar, paste, or drag-and-drop) and inserts the URL returned by the server.
+
+When the property is omitted or set to a falsy value (`""`, `null`, `undefined`), RichText switches to **inline mode**: the image file is read on the client and embedded directly into the content as a base64 data URL — no server is required. Inline images larger than 1024×800 are proportionally downscaled to fit within these limits.
+
+:::note
+Inline (base64) images are not preserved by the built-in DOCX / PDF [export](api/events/export.md). If you rely on export, supply an `imageUploadUrl` so that images reference an external location.
+:::
+
+:::caution
+Base64 encoding increases the encoded payload by roughly one third relative to the original file. A document with several large inline images grows accordingly, which affects the size of the value returned by [`getValue()`](api/methods/get-value.md), the memory footprint of the editor, and the cost of persisting or transferring the content. Prefer a server `imageUploadUrl` for documents that contain many or large images.
+:::
+
 ### Usage
 
 ~~~jsx {}
@@ -18,15 +30,26 @@ imageUploadUrl?: string;
 
 ### Example
 
+Upload images to a server endpoint:
+
 ~~~jsx {3}
 // initialize RichText
 new richtext.Richtext("#root", {
-    imageUploadUrl: "some URL"
+    imageUploadUrl: "https://example.com/upload"
+    // other configuration properties
+});
+~~~
+
+Insert images inline as base64 (no server required) — omit the property or pass an empty string:
+
+~~~jsx {2}
+new richtext.Richtext("#root", {
+    // imageUploadUrl is not set, images are inserted as base64 data URLs
     // other configuration properties
 });
 ~~~
 
-**Change log:** The property was added in v2.0
+**Change log:** The property was added in v2.0. Starting with v2.1, the property is fully optional: when omitted, images are inserted inline as base64 data URLs.
 
 **Related articles:** [Configuration](guides/configuration.md)
 
diff --git a/docs/api/events/insert-image.md b/docs/api/events/insert-image.md
index 7898511..99c5dde 100644
--- a/docs/api/events/insert-image.md
+++ b/docs/api/events/insert-image.md
@@ -17,7 +17,7 @@ description: You can learn about the insert-image event in the documentation of
 
 interface IImageContext {
     id: TID;
-    value: string;
+    value: string;  // image source: server URL when imageUploadUrl is set, or a base64 data URL when the image is inlined
     width: number;
     height: number;
     // extra props from uploader ctx, not required for the actual action
@@ -29,6 +29,10 @@ interface IImageContext {
 }
 ~~~
 
+:::note
+The `value` field holds either an external URL (when [`imageUploadUrl`](api/config/image-upload-url.md) is configured and the upload succeeds) or a base64 data URL (when `imageUploadUrl` is omitted and the image is inlined on the client). Handlers that process the source — for example, to rewrite the URL or validate the host — must account for both formats.
+:::
+
 :::info
 For handling inner events you can use [**Event Bus methods**](api/overview/event_bus_methods_overview.md)
 :::
diff --git a/docs/guides/configuration.md b/docs/guides/configuration.md
index 855ae27..3d3d2ff 100644
--- a/docs/guides/configuration.md
+++ b/docs/guides/configuration.md
@@ -238,9 +238,13 @@ new richtext.Richtext("#root", {
 });
 ~~~
 
-## Configure the image upload URL
+## Configure image insertion
 
-Pass a URL to the [`imageUploadUrl`](api/config/image-upload-url.md) property to set the server endpoint for toolbar image uploads:
+RichText supports two modes for inserting images via the toolbar, menubar, paste, or drag-and-drop. The mode is selected automatically based on the [`imageUploadUrl`](api/config/image-upload-url.md) property.
+
+### Upload images to a server
+
+Pass a URL to the [`imageUploadUrl`](api/config/image-upload-url.md) property to upload each inserted image to your endpoint. RichText sends the file as `multipart/form-data` (field name `upload`) and inserts the URL returned by the server:
 
 ~~~jsx {2}
 new richtext.Richtext("#root", {
@@ -249,6 +253,23 @@ new richtext.Richtext("#root", {
 });
 ~~~
 
+### Insert images inline as base64
+
+Omit [`imageUploadUrl`](api/config/image-upload-url.md) (or set it to an empty string) to embed images directly into the document content as base64 data URLs. No server is required:
+
+~~~jsx {2}
+new richtext.Richtext("#root", {
+    // imageUploadUrl is not set, images are inserted inline
+    // other configuration properties
+});
+~~~
+
+Inline images larger than 1024×800 are proportionally downscaled to fit within these limits.
+
+:::note
+Inline (base64) images are not preserved by the built-in DOCX / PDF [export](api/events/export.md). If you rely on export, supply an `imageUploadUrl` so that images reference an external location.
+:::
+
 ## Configure default styles
 
 Use the [`defaultStyles`](api/config/default-styles.md) property to set default styles per block type.
diff --git a/docs/index.md b/docs/index.md
index d6a84fe..25c556b 100644
--- a/docs/index.md
+++ b/docs/index.md
@@ -19,7 +19,7 @@ description: You can have an overview of DHTMLX JavaScript RichText library in t
 
 - Static [**menubar**](api/config/menubar.md) that can be shown or hidden
 
-- Image uploading, rich formatting, custom styling, and full screen mode
+- Image uploading with optional server [upload](api/config/image-upload-url.md) or inline base64 embedding, rich formatting, custom styling, and full screen mode
 
 - [Full API access](api/overview/main_overview.md) for [event handling](api/overview/event_bus_methods_overview.md), [content manipulation](api/overview/methods_overview.md), and [reactive state management](api/overview/state_methods_overview.md)