If you haven't installed the MS Word plugin, you can do so by opening Mendeley, go to 'Tools' and choose 'Install MS Word plugin' (close all running Word documents if needed).
1. To insert a citation in Word, go to 'References' tab, select 'Insert Citation'.
You can either search using keyword(s) and select the reference you want to insert and hit 'OK', or choose 'Go to Mendeley'.
In Mendeley, select a reference, and choose 'Cite'.
2. To insert the references (Reference list), select 'Insert Bibliography' from the Word plugin.
Mendeley will automatically update the references as you insert more citations to your Word document. The references will also be arranged in alphabetical order.