diff --git a/README.md b/README.md
index 6f3ec36..153a580 100644
--- a/README.md
+++ b/README.md
@@ -1,3 +1,6 @@
 # Setup Python GitHub Action
 
-Setup Python environment with Pipenv and cache the virtual environment.
+Setup Python environment and cache the virtual environment.
+
+Dependencies manager Pipenv or Poetry can be used. 
+Projects using Poetry must specify version in `.tool-versions`.
diff --git a/action.yml b/action.yml
index 3887b1f..706ea73 100644
--- a/action.yml
+++ b/action.yml
@@ -1,6 +1,13 @@
-name: Install Python dependencies with Pipenv and caching.
+name: Install Python dependencies with Pipenv or Poetry and caching.
 description: |
-  Install Python dependencies with Pipenv.
+  Install Python dependencies and caching. |
+  Dependencies manager Pipenv or Poetry is detetected using file `.tool-versions`. |
+  Caching name is defined.
+
+outputs:
+  dependencies-manager:
+    description: "Dependencies manager selection between 'pipenv' and 'poetry'."
+    value: ${{ steps.dependencies-manager.outputs.dm }}
 
 runs:
   using: composite
@@ -10,16 +17,56 @@ runs:
       shell: bash
       run: echo "python-version=$(cat .tool-versions | grep python | awk '{print $2}')" >> $GITHUB_OUTPUT
 
-    - name: Install pipenv
+    - name: Search Poetry
+      id: search-poetry
+      shell: bash
+      run: echo "poetry-str=$(cat .tool-versions | grep poetry | awk '{print $1}')" >> $GITHUB_OUTPUT
+
+    - name: Check if poetry
+      id: check-if-poetry
+      shell: bash
+      run: echo "use-poetry=$(expr '${{ steps.search-poetry.outputs.poetry-str }}' == 'poetry')" >> $GITHUB_OUTPUT
+
+    - name: Dependecies Manager
+      id: dependencies-manager
+      shell: bash
+      run: if [[ ${{ steps.check-if-poetry.outputs.use-poetry }} == 1 ]]; then echo 'dm=poetry'; else echo 'dm=pipenv'; fi >> $GITHUB_OUTPUT
+
+    - name: Get poetry version
+      id: get-poetry-version
       shell: bash
+      if: ${{ steps.check-if-poetry.outputs.use-poetry == 1 }}
+      run: echo "poetry-version=$(cat .tool-versions | grep poetry | awk '{print $2}')" >> $GITHUB_OUTPUT
+
+    - name: Install poetry if selected
+      id: install-poetry-if-selected
+      shell: bash
+      if: ${{ steps.check-if-poetry.outputs.use-poetry == 1 }}
+      run: pipx install poetry==${{ steps.get-poetry-version.outputs.poetry-version }}
+
+    - name: Install pipenv if not poetry
+      id: install-pipenv-if-not-poetry
+      shell: bash
+      if: ${{ steps.check-if-poetry.outputs.use-poetry != 1 }}
       run: pipx install pipenv
 
+    - name: Get cache name
+      id: get-cache-name
+      shell: bash
+      run: if [[ ${{ steps.check-if-poetry.outputs.use-poetry }} == 1 ]]; then echo 'cache=poetry'; else echo 'cache=pipenv'; fi >> $GITHUB_OUTPUT
+
     - name: Setup Python environment and cache
       uses: actions/setup-python@v4
       with:
         python-version: ${{ steps.get-python-version.outputs.python-version }}
-        cache: 'pipenv'
+        cache: ${{ steps.get-cache-name.outputs.cache }}
+
+    - name: Install dependencies using poetry
+      shell: bash
+      if: ${{ steps.check-if-poetry.outputs.use-poetry == 1 }}
+      run: poetry install --sync
 
-    - name: Install dependencies
+    - name: Install dependencies using pipenv
       shell: bash
+      if: ${{ steps.check-if-poetry.outputs.use-poetry != 1 }}
       run: pipenv sync --dev