diff --git a/README.md b/README.md
index 6dafed1f9..1ffbe53e4 100644
--- a/README.md
+++ b/README.md
@@ -59,11 +59,11 @@ steps:
 ```
 
 > **Note**: Due to the peculiarities of YAML parsing, it is recommended to wrap the version in single quotation marks:
-> 
+>
 > ```yaml
 >   go-version: '1.20'
 >  ```
->  
+>
 > The recommendation is based on the YAML parser's behavior, which interprets non-wrapped values as numbers and, in the case of version 1.20, trims it down to 1.2, which may not be very obvious.
 Matching an unstable pre-release:
 
@@ -161,7 +161,7 @@ The action defaults to search for the dependency file - go.sum in the repository
 the cache key. Use `cache-dependency-path` input for cases when multiple dependency files are used, or they are located
 in different subdirectories.
 
-If some problem that prevents success caching happens then the action issues the warning in the log and continues the execution of the pipeline. 
+If some problem that prevents success caching happens then the action issues the warning in the log and continues the execution of the pipeline.
 
 **Caching in monorepos**
 
@@ -175,16 +175,19 @@ steps:
       cache-dependency-path: subdir/go.sum
   - run: go run hello.go
   ```
+## Getting go version from a file
 
-## Getting go version from the go.mod file
+If both the `go-version` and the `go-version-file` inputs are provided then the `go-version` input is used.
 
-The `go-version-file` input accepts a path to a `go.mod` file or a `go.work` file that contains the version of Go to be
-used by a project. As the `go.mod` file contains only major and minor (e.g. 1.18) tags, the action will search for the
-latest available patch version sequentially in the runner's directory with the cached tools, in
-the [versions-manifest.json](https://github.com/actions/go-versions/blob/main/versions-manifest.json) file or at the go
-servers.
+If the file contains only major and minor (e.g. 1.18) tags, the action will search for the latest available patch version
+sequentially in the runner's directory with the cached tools, in the [version-manifest.json](https://github.com/actions/go-versions/blob/main/versions-manifest.json)
+file or at the go servers.
+
+### If the go.mod or .tool-versions files
+
+The `go-version-file` input accepts a path to a `go.mod` file, [.tool-versions](https://asdf-vm.com/manage/configuration.html#tool-versions) file or a `go.work` file that contains the version of Go to be used by a project.
+As the `go.mod` file contains only major and minor (e.g. 1.18) tags, the action will follow the above-mentioned approach.
 
-If both the `go-version` and the `go-version-file` inputs are provided then the `go-version` input is used.
 > The action will search for the `go.mod` file relative to the repository root
 
 ```yaml
@@ -196,6 +199,34 @@ steps:
   - run: go version
 ```
 
+The `go-version` output contains the resolved Golang version from the `go.mod` file.
+
+> The action will search for the `.tool-versions` file relative to the repository root
+
+```yaml
+steps:
+  - uses: actions/checkout@v3
+  - uses: actions/setup-go@v4
+    with:
+      go-version-file: '.tool-versions'
+  - run: go version
+```
+
+### If a different file
+
+The `go-version-file` input accepts a path to a file that contains the version of Go to be used by a project. It supports either major and minor (e.g 1.18) or major, minor and patch (e.g 1.18.7) tags. If the file contains only major and minor (e.g. 1.18) tags, the action will follow the above-mentioned approach.
+
+> The action will search for the `.go-version` file relative to the repository root
+
+```yaml
+steps:
+- uses: actions/checkout@v3
+- uses: actions/setup-go@v3
+  with:
+    go-version-file: 'path/to/.go-version'
+- run: go version
+```
+
 ## Matrix testing
 
 ```yaml