Firstly, note that Compose 1.4.0 requires Docker 1.7.1 or later.

Secondly, if you're a Mac user, the Docker Toolbox will install Compose 1.4.0 for you, alongside the latest versions of the Docker Engine, Machine and Kitematic.

Otherwise, you can use the usual commands to install/upgrade. Either download the binary:

curl -L https://github.com/docker/compose/releases/download/1.4.0/docker-compose-`uname -s`-`uname -m` > /usr/local/bin/docker-compose
chmod +x /usr/local/bin/docker-compose

Or install the PyPi package:

pip install -U docker-compose==1.4.0

Here's what's new:

• By default, docker-compose up now only recreates containers for services whose configuration has changed since they were created. This should result in a dramatic speed-up for many applications.

The experimental --x-smart-recreate flag which introduced this feature in Compose 1.3.0 has been removed, and a --force-recreate flag has been added for when you want to recreate everything.

• Several of Compose's commands - scale, stop, kill and rm - now perform actions on multiple containers in parallel, rather than in sequence, which will run much faster on larger applications.
• You can now specify a custom name for a service's container with container_name. Because Docker container names must be unique, this means you can't scale the service beyond one container.
• You no longer have to specify a file option when using extends - it will default to the current file.
• Service names can now contain dots, dashes and underscores.
• Compose can now read YAML configuration from standard input, rather than from a file, by specifying - as the filename. This makes it easier to generate configuration dynamically:

$ echo 'redis: {"image": "redis"}' | docker-compose --file - up

• There's a new docker-compose version command which prints extended information about Compose's bundled dependencies.
• docker-compose.yml now supports log_opt as well as log_driver, allowing you to pass extra configuration to a service's logging driver.
• docker-compose.yml now supports memswap_limit, similar to docker run --memory-swap.
• When mounting volumes with the volumes option, you can now pass in any mode supported by the daemon, not just :ro or :rw. For example, SELinux users can pass :z or :Z.
• You can now specify a custom volume driver with the volume_driver option in docker-compose.yml, much like docker run --volume-driver.
• A bug has been fixed where Compose would fail to pull images from private registries serving plain (unsecured) HTTP. The --allow-insecure-ssl flag, which was previously used to work around this issue, has been deprecated and now has no effect.
• A bug has been fixed where docker-compose build would fail if the build depended on a private Hub image or an image from a private registry.
• A bug has been fixed where Compose would crash if there were containers which the Docker daemon had not finished removing.
• Two bugs have been fixed where Compose would sometimes fail with a "Duplicate bind mount" error, or fail to attach volumes to a container, if there was a volume path specified in docker-compose.yml with a trailing slash.

Thanks @mnowster, @dnephin, @ekristen, @funkyfuture, @jeffk and @lukemarsden!