diff --git a/package.json b/package.json
index 6d433e64..e6eaca48 100644
--- a/package.json
+++ b/package.json
@@ -42,7 +42,7 @@
     "msvc-dev-cmd": "github:aminya/msvc-dev-cmd#9f672c1",
     "numerous": "1.0.3",
     "semver": "7.3.7",
-    "setup-python": "github:actions/setup-python#7f80679172b057fc5e90d70d197929d454754a5a",
+    "setup-python": "github:actions/setup-python#v3.1.2",
     "time-delta": "github:aminya/time-delta#69d91a41cef28e569be9a2991129f5f7d1f0d00e",
     "untildify": "^4.0.0",
     "which": "^2.0.2"
diff --git a/src/python/actions_python.ts b/src/python/actions_python.ts
index dbc64022..4131ed3b 100644
--- a/src/python/actions_python.ts
+++ b/src/python/actions_python.ts
@@ -1,43 +1,53 @@
 import * as finder from "setup-python/src/find-python"
 import * as finderPyPy from "setup-python/src/find-pypy"
 import { existsSync } from "fs"
-import { warning } from "../utils/io/io"
-import { info } from "@actions/core"
+import { info, warning } from "../utils/io/io"
+import * as core from "@actions/core"
 import path from "path"
 import { isGitHubCI } from "../utils/env/isci"
-// import { getCacheDistributor } from "setup-python/src/cache-distributions/cache-factory"
-// import { isGhes } from "setup-python/src/utils"
+import { isCacheFeatureAvailable } from "setup-python/src/utils"
+import { getCacheDistributor } from "setup-python/src/cache-distributions/cache-factory"
 
 function isPyPyVersion(versionSpec: string) {
   return versionSpec.startsWith("pypy-")
 }
 
-// // @ts-ignore
-// async function cacheDependencies(cache: string, pythonVersion: string) {
-//   if (isGhes()) {
-//     throw new Error("Caching is not supported on GHES")
-//   }
-//   const cacheDependencyPath = core.getInput("cache-dependency-path") || undefined
-//   const cacheDistributor = getCacheDistributor(cache, pythonVersion, cacheDependencyPath)
-//   await cacheDistributor.restoreCache()
-// }
+async function cacheDependencies(cache: string, pythonVersion: string) {
+  const cacheDependencyPath = undefined // core.getInput("cache-dependency-path") || undefined
+  const cacheDistributor = getCacheDistributor(cache, pythonVersion, cacheDependencyPath)
+  await cacheDistributor.restoreCache()
+}
 
 export async function setupActionsPython(version: string, _setupDir: string, arch: string) {
-  let pythonVersion: string
-  if (isPyPyVersion(version)) {
-    const installed = await finderPyPy.findPyPyVersion(version, arch)
-    pythonVersion = `${installed.resolvedPyPyVersion}-${installed.resolvedPythonVersion}`
-    info(`Successfully setup PyPy ${installed.resolvedPyPyVersion} with Python (${installed.resolvedPythonVersion})`)
+  if (process.env.AGENT_TOOLSDIRECTORY?.trim()) {
+    core.debug(`Python is expected to be installed into AGENT_TOOLSDIRECTORY=${process.env.AGENT_TOOLSDIRECTORY}`)
+    process.env.RUNNER_TOOL_CACHE = process.env.AGENT_TOOLSDIRECTORY
   } else {
-    const installed = await finder.findPythonVersion(version, arch)
-    pythonVersion = installed.version
-    info(`Successfully setup ${installed.impl} (${pythonVersion})`)
+    core.debug(`Python is expected to be installed into RUNNER_TOOL_CACHE==${process.env.RUNNER_TOOL_CACHE}`)
   }
+  try {
+    if (version) {
+      let pythonVersion: string
+      if (isPyPyVersion(version)) {
+        const installed = await finderPyPy.findPyPyVersion(version, arch)
+        pythonVersion = `${installed.resolvedPyPyVersion}-${installed.resolvedPythonVersion}`
+        info(
+          `Successfully setup PyPy ${installed.resolvedPyPyVersion} with Python (${installed.resolvedPythonVersion})`
+        )
+      } else {
+        const installed = await finder.useCpythonVersion(version, arch)
+        pythonVersion = installed.version
+        info(`Successfully setup ${installed.impl} (${pythonVersion})`)
+      }
 
-  // const cache = core.getInput("cache")
-  // if (cache) {
-  //   await cacheDependencies(cache, pythonVersion)
-  // }
+      const cache = "pip" // core.getInput("cache") // package manager used for caching
+      if (isCacheFeatureAvailable()) {
+        await cacheDependencies(cache, pythonVersion)
+      }
+    }
+  } catch (err) {
+    core.setFailed((err as Error).message)
+  }
 
   if (isGitHubCI()) {
     addPythonLoggingMatcher()