diff --git a/.github/workflows/self-test.yml b/.github/workflows/self-test.yml
index f815892..3f7c229 100644
--- a/.github/workflows/self-test.yml
+++ b/.github/workflows/self-test.yml
@@ -16,12 +16,48 @@ jobs:
     steps:
     - uses: actions/checkout@v3
 
+    - run: echo "3.11.6" > .python-version
+      shell: bash
+
+    # Run local action
+    - name: Test action-setup-venv
+      id: venv
+      uses: ./
+      with:
+        # this should override .python-version
+        python-version: 3.11.4
+        install-cmd: pip install -r test/testdata/requirements.txt
+
+    # Print debug vars
+    - name: Print variables for debugging
+      shell: bash
+      run: |
+        echo "VIRTUAL_ENV: ${VIRTUAL_ENV}"
+        echo "PATH: ${PATH}"
+        echo "Cache Hit: ${{ steps.venv.outputs.cache-hit }}"
+        ls -la ${VIRTUAL_ENV}/${{ runner.os == 'Windows' && 'Lib' || 'lib/*' }}/site-packages
+
+    # Test the venv and install worked
+    - name: Ensure environment works
+      run: |
+        python -Sc 'import sys; assert sys.version_info[:3] == (3, 11, 4), sys.version_info'
+        python ./test/testdata/demo.py
+
+  self-test-python-version-file:
+    runs-on: ubuntu-latest
+    steps:
+    - uses: actions/checkout@v3
+
+    - run: echo "3.11.6" > .python-version
+      shell: bash
+
     # Run local action
     - name: Test action-setup-venv
       id: venv
       uses: ./
       with:
-        python-version: 3.8
+        # since there is a .python-version file and we did not specify
+        # python-version, it should be used
         install-cmd: pip install -r test/testdata/requirements.txt
 
     # Print debug vars
@@ -35,7 +71,9 @@ jobs:
 
     # Test the venv and install worked
     - name: Ensure environment works
-      run: python ./test/testdata/demo.py
+      run: |
+        python -Sc 'import sys; assert sys.version_info[:3] == (3, 11, 6), sys.version_info'
+        python ./test/testdata/demo.py
 
   no-install-self-test:
     runs-on: ubuntu-latest
@@ -47,11 +85,13 @@ jobs:
       id: venv
       uses: ./
       with:
-        python-version: 3.8
+        python-version: 3.11.6
 
     # Test the venv and external install work
     - name: Pip install
       if: steps.venv.outputs.cache-hit != 'true'
       run: pip install -r test/testdata/requirements.txt
     - name: Ensure environment works
-      run: python ./test/testdata/demo.py
+      run: |
+        python -Sc 'import sys; assert sys.version_info[:3] == (3, 11, 6), sys.version_info'
+        python ./test/testdata/demo.py
diff --git a/README.md b/README.md
index ad48c7e..91c06c7 100644
--- a/README.md
+++ b/README.md
@@ -9,11 +9,28 @@ when the cache is available.
 
 ### Usage
 
+uv:
 ```yaml
-    - uses: getsentry/action-setup-venv@v2.2.0
+    - uses: astral-sh/setup-uv@884ad927a57e558e7a70b92f2bccf9198a4be546 # v6
+      with:
+        version: "0.8.2"
+        # we just cache the venv-dir directly in action-setup-venv
+        enable-cache: false
+
+    - uses: getsentry/action-setup-venv@v3.0.0
+      with:
+        cache-dependency-path: uv.lock
+        install-cmd: uv sync --frozen --active
+```
+
+pip:
+```yaml
+    - uses: getsentry/action-setup-venv@v3.0.0
       id: venv
       with:
-        python-version: 3.10.7
+        # starting from action-setup-venv@v3.0.0, if python-version isn't specified,
+        # we default to using the version in .python-version file.
+        python-version: 3.11.6
         cache-dependency-path: |
           requirements.txt
           requirements-frozen.txt
diff --git a/action.yml b/action.yml
index 0f2e4fa..1eca513 100644
--- a/action.yml
+++ b/action.yml
@@ -3,7 +3,8 @@ description: 'configures venv, python and caches'
 
 inputs:
   python-version:
-    description: "Version range or exact version of Python or PyPy to use, using SemVer's version range syntax."
+    description: "Version range or exact version of Python or PyPy to use, using SemVer's version range syntax. If not set, the version in .python-version file will be used."
+    default: ''
   cache-dependency-path:
     description: "Requirement files to install. Can be a glob pattern."
     default: '**/requirements*.txt'
@@ -24,6 +25,7 @@ runs:
       id: setup-python
       with:
         python-version: ${{ inputs.python-version }}
+        python-version-file: ${{ hashFiles('.python-version') == '' && '' || '.python-version' }}
 
     - run: echo '::remove-matcher owner=python::'
       shell: bash