diff --git a/README.md b/README.md
index b23585d..d4fa6fa 100644
--- a/README.md
+++ b/README.md
@@ -191,9 +191,15 @@ steps:
 
 ## Getting go version from the go.mod file
 
-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.
+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. The version taken
+from thils file will be:
+
+  - The version from the `toolchain` directive, if there is one, otherwise
+  - The version from the `go` directive
+
+The version can specify a patch version or omit it altogether (e.g., `go 1.22.0` or `go 1.22`).
 
-The `go` directive in `go.mod` can specify a patch version or omit it altogether (e.g., `go 1.22.0` or `go 1.22`).  
 If a patch version is specified, that specific patch version will be used.  
 If no patch version is specified, it will search for the latest available patch version in the cache,
 [versions-manifest.json](https://github.com/actions/go-versions/blob/main/versions-manifest.json), and the
diff --git a/__tests__/setup-go.test.ts b/__tests__/setup-go.test.ts
index f94f9ee..e167ce6 100644
--- a/__tests__/setup-go.test.ts
+++ b/__tests__/setup-go.test.ts
@@ -285,7 +285,7 @@ describe('setup-go', () => {
     expect(logSpy).toHaveBeenCalledWith(`Setup go version spec 1.13.0`);
   });
 
-  it('does not export any variables for Go versions >=1.9', async () => {
+  it('does not export GOROOT for Go versions >=1.9', async () => {
     inputs['go-version'] = '1.13.0';
     inSpy.mockImplementation(name => inputs[name]);
 
@@ -298,7 +298,7 @@ describe('setup-go', () => {
     });
 
     await main.run();
-    expect(vars).toStrictEqual({});
+    expect(vars).not.toHaveProperty('GOROOT');
   });
 
   it('exports GOROOT for Go versions <1.9', async () => {
@@ -314,9 +314,7 @@ describe('setup-go', () => {
     });
 
     await main.run();
-    expect(vars).toStrictEqual({
-      GOROOT: toolPath
-    });
+    expect(vars).toHaveProperty('GOROOT', toolPath);
   });
 
   it('finds a version of go already in the cache', async () => {
@@ -989,4 +987,68 @@ use .
       }
     );
   });
+
+  describe('go-version-file-toolchain', () => {
+    const goModContents = `module example.com/mymodule
+
+go 1.14
+
+toolchain go1.21.0
+
+require (
+	example.com/othermodule v1.2.3
+	example.com/thismodule v1.2.3
+	example.com/thatmodule v1.2.3
+)
+
+replace example.com/thatmodule => ../thatmodule
+exclude example.com/thismodule v1.3.0
+`;
+
+    const goWorkContents = `go 1.19
+
+toolchain go1.21.0
+
+use .
+
+`;
+
+    it('reads version from toolchain directive in go.mod', async () => {
+      inputs['go-version-file'] = 'go.mod';
+      existsSpy.mockImplementation(() => true);
+      readFileSpy.mockImplementation(() => Buffer.from(goModContents));
+
+      await main.run();
+
+      expect(logSpy).toHaveBeenCalledWith('Setup go version spec 1.21.0');
+      expect(logSpy).toHaveBeenCalledWith('Attempting to download 1.21.0...');
+      expect(logSpy).toHaveBeenCalledWith('matching 1.21.0...');
+    });
+
+    it('reads version from toolchain directive in go.work', async () => {
+      inputs['go-version-file'] = 'go.work';
+      existsSpy.mockImplementation(() => true);
+      readFileSpy.mockImplementation(() => Buffer.from(goWorkContents));
+
+      await main.run();
+
+      expect(logSpy).toHaveBeenCalledWith('Setup go version spec 1.21.0');
+      expect(logSpy).toHaveBeenCalledWith('Attempting to download 1.21.0...');
+      expect(logSpy).toHaveBeenCalledWith('matching 1.21.0...');
+    });
+  });
+
+  it('exports GOTOOLCHAIN and sets it in current process env', async () => {
+    inputs['go-version'] = '1.21.0';
+    inSpy.mockImplementation(name => inputs[name]);
+
+    const vars: {[key: string]: string} = {};
+    exportVarSpy.mockImplementation((name: string, val: string) => {
+      vars[name] = val;
+    });
+
+    await main.run();
+    expect(vars).toStrictEqual({GOTOOLCHAIN: 'local'});
+    expect(process.env).toHaveProperty('GOTOOLCHAIN', 'local');
+  });
 });
diff --git a/dist/setup/index.js b/dist/setup/index.js
index 11df681..da47f5f 100644
--- a/dist/setup/index.js
+++ b/dist/setup/index.js
@@ -94663,8 +94663,14 @@ function parseGoVersionFile(versionFilePath) {
     const contents = fs_1.default.readFileSync(versionFilePath).toString();
     if (path.basename(versionFilePath) === 'go.mod' ||
         path.basename(versionFilePath) === 'go.work') {
-        const match = contents.match(/^go (\d+(\.\d+)*)/m);
-        return match ? match[1] : '';
+        // toolchain directive: https://go.dev/ref/mod#go-mod-file-toolchain
+        const matchToolchain = contents.match(/^toolchain go(\d+(\.\d+)*)/m);
+        if (matchToolchain) {
+            return matchToolchain[1];
+        }
+        // go directive: https://go.dev/ref/mod#go-mod-file-go
+        const matchGo = contents.match(/^go (\d+(\.\d+)*)/m);
+        return matchGo ? matchGo[1] : '';
     }
     return contents.trim();
 }
@@ -94777,6 +94783,7 @@ const os_1 = __importDefault(__nccwpck_require__(2037));
 function run() {
     return __awaiter(this, void 0, void 0, function* () {
         try {
+            setToolchain();
             //
             // versionSpec is optional.  If supplied, install / use from the tool cache
             // If not supplied then problem matchers will still be setup.  Useful for self-hosted.
@@ -94890,6 +94897,21 @@ function resolveVersionInput() {
     }
     return version;
 }
+function setToolchain() {
+    // docs: https://go.dev/doc/toolchain
+    // "local indicates the bundled Go toolchain (the one that shipped with the go command being run)"
+    // this is so any 'go' command is run with the selected Go version
+    // and doesn't trigger a toolchain download and run commands with that
+    // see e.g. issue #424
+    // and a similar discussion: https://github.com/docker-library/golang/issues/472
+    const toolchain = 'local';
+    const toolchainVar = 'GOTOOLCHAIN';
+    // set the value in process env so any `go` commands run as child-process
+    // don't cause toolchain downloads
+    process.env[toolchainVar] = toolchain;
+    // and in the runner env so e.g. a user running `go mod tidy` won't cause it
+    core.exportVariable(toolchainVar, toolchain);
+}
 
 
 /***/ }),
diff --git a/src/installer.ts b/src/installer.ts
index 1b5f20f..4b8204d 100644
--- a/src/installer.ts
+++ b/src/installer.ts
@@ -495,8 +495,15 @@ export function parseGoVersionFile(versionFilePath: string): string {
     path.basename(versionFilePath) === 'go.mod' ||
     path.basename(versionFilePath) === 'go.work'
   ) {
-    const match = contents.match(/^go (\d+(\.\d+)*)/m);
-    return match ? match[1] : '';
+    // toolchain directive: https://go.dev/ref/mod#go-mod-file-toolchain
+    const matchToolchain = contents.match(/^toolchain go(\d+(\.\d+)*)/m);
+    if (matchToolchain) {
+      return matchToolchain[1];
+    }
+
+    // go directive: https://go.dev/ref/mod#go-mod-file-go
+    const matchGo = contents.match(/^go (\d+(\.\d+)*)/m);
+    return matchGo ? matchGo[1] : '';
   }
 
   return contents.trim();
diff --git a/src/main.ts b/src/main.ts
index 690d277..a52951c 100644
--- a/src/main.ts
+++ b/src/main.ts
@@ -11,6 +11,7 @@ import os from 'os';
 
 export async function run() {
   try {
+    setToolchain();
     //
     // versionSpec is optional.  If supplied, install / use from the tool cache
     // If not supplied then problem matchers will still be setup.  Useful for self-hosted.
@@ -160,3 +161,20 @@ function resolveVersionInput(): string {
 
   return version;
 }
+
+function setToolchain() {
+  // docs: https://go.dev/doc/toolchain
+  // "local indicates the bundled Go toolchain (the one that shipped with the go command being run)"
+  // this is so any 'go' command is run with the selected Go version
+  // and doesn't trigger a toolchain download and run commands with that
+  // see e.g. issue #424
+  // and a similar discussion: https://github.com/docker-library/golang/issues/472
+  const toolchain = 'local';
+  const toolchainVar = 'GOTOOLCHAIN';
+
+  // set the value in process env so any `go` commands run as child-process
+  // don't cause toolchain downloads
+  process.env[toolchainVar] = toolchain;
+  // and in the runner env so e.g. a user running `go mod tidy` won't cause it
+  core.exportVariable(toolchainVar, toolchain);
+}