diff --git a/doc/functions/fileset.section.md b/doc/functions/fileset.section.md
index b24ebe26cc3b..08b9ba9eaedc 100644
--- a/doc/functions/fileset.section.md
+++ b/doc/functions/fileset.section.md
@@ -9,7 +9,7 @@ File sets are easy and safe to use, providing obvious and composable semantics w
 These sections apply to the entire library.
 See the [function reference](#sec-functions-library-fileset) for function-specific documentation.
 
-The file set library is currently very limited but is being expanded to include more functions over time.
+The file set library is currently somewhat limited but is being expanded to include more functions over time.
 
 ## Implicit coercion from paths to file sets {#sec-fileset-path-coercion}
 
diff --git a/lib/fileset/README.md b/lib/fileset/README.md
index 306dcdaa421d..a75efc496c4e 100644
--- a/lib/fileset/README.md
+++ b/lib/fileset/README.md
@@ -177,15 +177,9 @@ Arguments:
 ## To update in the future
 
 Here's a list of places in the library that need to be updated in the future:
-- > The file set library is currently very limited but is being expanded to include more functions over time.
+- > The file set library is currently somewhat limited but is being expanded to include more functions over time.
 
   in [the manual](../../doc/functions/fileset.section.md)
-- > Currently the only way to construct file sets is using implicit coercion from paths.
-
-  in [the `toSource` reference](./default.nix)
-- > For now filesets are always paths
-
-  in [the `toSource` implementation](./default.nix), also update the variable name there
 - Once a tracing function exists, `__noEval` in [internal.nix](./internal.nix) should mention it
 - If/Once a function to convert `lib.sources` values into file sets exists, the `_coerce` and `toSource` functions should be updated to mention that function in the error when such a value is passed
 - If/Once a function exists that can optionally include a path depending on whether it exists, the error message for the path not existing in `_coerce` should mention the new function
diff --git a/lib/fileset/default.nix b/lib/fileset/default.nix
index 1bda8ef789a4..2c8997d71fc2 100644
--- a/lib/fileset/default.nix
+++ b/lib/fileset/default.nix
@@ -58,16 +58,51 @@ in {
       } -> SourceLike
 
     Example:
-      # Import the current directory into the store but only include files under ./src
-      toSource { root = ./.; fileset = ./src; }
+      # Import the current directory into the store
+      # but only include files under ./src
+      toSource {
+        root = ./.;
+        fileset = ./src;
+      }
       => "/nix/store/...-source"
 
-      # The file set coerced from path ./bar could contain files outside the root ./foo, which is not allowed
-      toSource { root = ./foo; fileset = ./bar; }
+      # Import the current directory into the store
+      # but only include ./Makefile and all files under ./src
+      toSource {
+        root = ./.;
+        fileset = union
+          ./Makefile
+          ./src;
+      }
+      => "/nix/store/...-source"
+
+      # Trying to include a file outside the root will fail
+      toSource {
+        root = ./.;
+        fileset = unions [
+          ./Makefile
+          ./src
+          ../LICENSE
+        ];
+      }
       => <error>
 
+      # The root needs to point to a directory that contains all the files
+      toSource {
+        root = ../.;
+        fileset = unions [
+          ./Makefile
+          ./src
+          ../LICENSE
+        ];
+      }
+      => "/nix/store/...-source"
+
       # The root has to be a local filesystem path
-      toSource { root = "/nix/store/...-source"; fileset = ./.; }
+      toSource {
+        root = "/nix/store/...-source";
+        fileset = ./.;
+      }
       => <error>
   */
   toSource = {
@@ -85,18 +120,24 @@ The only way to change which files get added to the store is by changing the `fi
     root,
     /*
       (required) The file set whose files to import into the store.
-      Currently the only way to construct file sets is using [implicit coercion from paths](#sec-fileset-path-coercion).
-      If a directory does not recursively contain any file, it is omitted from the store path contents.
+      File sets can be created using other functions in this library.
+      This argument can also be a path,
+      which gets [implicitly coerced to a file set](#sec-fileset-path-coercion).
+
+<!-- Ignore the indentation here, this is a nixdoc rendering bug that needs to be fixed -->
+:::{.note}
+If a directory does not recursively contain any file, it is omitted from the store path contents.
+:::
+
     */
     fileset,
   }:
     let
       # We cannot rename matched attribute arguments, so let's work around it with an extra `let in` statement
-      # For now filesets are always paths
-      filesetPath = fileset;
+      maybeFileset = fileset;
     in
     let
-      fileset = _coerce "lib.fileset.toSource: `fileset`" filesetPath;
+      fileset = _coerce "lib.fileset.toSource: `fileset`" maybeFileset;
       rootFilesystemRoot = (splitRoot root).root;
       filesetFilesystemRoot = (splitRoot fileset._internalBase).root;
       filter = _toSourceFilter fileset;
diff --git a/lib/fileset/tests.sh b/lib/fileset/tests.sh
index d4a175acf6c7..69ce29bbbfb3 100755
--- a/lib/fileset/tests.sh
+++ b/lib/fileset/tests.sh
@@ -265,7 +265,7 @@ expectFailure 'toSource { root = ./.; fileset = "/some/path"; }' 'lib.fileset.to
 expectFailure 'toSource { root = ./.; fileset = ./a; }' 'lib.fileset.toSource: `fileset` '"$work"'/a does not exist.'
 
 # File sets cannot be evaluated directly
-expectFailure '_create ./. null' 'lib.fileset: Directly evaluating a file set is not supported. Use `lib.fileset.toSource` to turn it into a usable source instead.'
+expectFailure 'union ./. ./.' 'lib.fileset: Directly evaluating a file set is not supported. Use `lib.fileset.toSource` to turn it into a usable source instead.'
 
 # Past versions of the internal representation are supported
 expectEqual '_coerce "<tests>: value" { _type = "fileset"; _internalVersion = 0; _internalBase = ./.; }' \