diff --git a/Doc/library/functions.rst b/Doc/library/functions.rst
--- a/Doc/library/functions.rst
+++ b/Doc/library/functions.rst
@@ -1376,21 +1376,51 @@
    With three arguments, return a new type object.  This is essentially a
    dynamic form of the :keyword:`class` statement. The *name* string is the
    class name and becomes the :attr:`__name__` attribute; the *bases* tuple
-   itemizes the base classes and becomes the :attr:`__bases__` attribute;
-   and the *dict* dictionary is the namespace containing definitions for class
-   body and becomes the :attr:`__dict__` attribute.  For example, the
-   following two statements create identical :class:`type` objects:
+   itemizes the base classes and becomes the :attr:`__bases__` attribute; and
+   the *dict* dictionary is the namespace containing definitions for class body
+   and becomes the :attr:`__dict__` attribute.
+   
+   For example, the following two statements create identical :class:`type`
+   objects:
 
       >>> class X:
       ...     a = 1
       ...
       >>> X = type('X', (object,), dict(a=1))
 
+   However, when any of the base classes is using metaclasses, there is a
+   difference between definition of a derived class using the :keyword:`class`
+   statement, and definition of the derived class using :func:`type`. In the
+   later case, any `__prepare__` functions defined in the metaclass (cf.
+   :ref:`class-namespace-preparation`) are *not* executed.
+
+   The following example demonstrates the difference:
+
+      >>> class CustomMetaclass(type):
+      ...     @classmethod
+      ...     def __prepare__(cls, name, bases):
+      ...          return { 'prepared_for': name }
+      ...
+      >>> class ParentClass(metaclass=CustomMetaclass):
+      ...     pass
+      ...
+      >>> class ClassOne(ParentClass):
+      ...     pass
+      ...
+      >>> ClassTwo = type('ClassTwo', (ParentClass,), {})
+      >>> ClassOne.prepared_for
+      'ClassOne'
+      >>> ClassTwo.prepared_for
+      'ParentClass'
+      >>> 'prepared_for' in ClassOne.__dict__
+      True
+      >>> 'prepared_for' in ClassTwo.__dict__
+      False
+
    See also :ref:`bltin-type-objects`.
 
-
 .. function:: vars([object])
-
+   
    Return the :attr:`__dict__` attribute for a module, class, instance,
    or any other object with a :attr:`__dict__` attribute.
 
diff --git a/Doc/reference/datamodel.rst b/Doc/reference/datamodel.rst
--- a/Doc/reference/datamodel.rst
+++ b/Doc/reference/datamodel.rst
@@ -1619,6 +1619,8 @@
 that criterion, then the class definition will fail with ``TypeError``.
 
 
+.. _class-namespace-preparation:
+
 Preparing the class namespace
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^