diff --git a/.github/workflows/test-version.yaml b/.github/workflows/test-version.yaml
index 61f8dec2..bf869c82 100644
--- a/.github/workflows/test-version.yaml
+++ b/.github/workflows/test-version.yaml
@@ -137,6 +137,32 @@ jobs:
             exit 1
           fi
 
+  tofuenv:
+    runs-on: ubuntu-24.04
+    name: tofuenv
+    steps:
+      - name: Checkout
+        uses: actions/checkout@v4
+        with:
+          persist-credentials: false
+
+      - name: Test tofu-version
+        uses: ./tofu-version
+        id: tofu-version
+        with:
+          path: tests/workflows/test-version/tofuenv
+
+      - name: Check the version
+        env:
+          DETECTED_TERRAFORM_VERSION: ${{ steps.tofu-version.outputs.terraform }}
+        run: |
+          echo "The terraform version was $DETECTED_TERRAFORM_VERSION"
+          
+          if [[ "$DETECTED_TERRAFORM_VERSION" != "1.8.5" ]]; then
+            echo "::error:: Terraform version not set from .opentofu-version"
+            exit 1
+          fi
+
   asdf:
     runs-on: ubuntu-24.04
     name: asdf
diff --git a/image/src/terraform_version/__main__.py b/image/src/terraform_version/__main__.py
index 492ff55a..d6bbf0dc 100644
--- a/image/src/terraform_version/__main__.py
+++ b/image/src/terraform_version/__main__.py
@@ -51,7 +51,12 @@ def determine_version(inputs: InitInputs, cli_config_path: Path, actions_env: Ac
         sys.stdout.write(f'Using {version.product} version specified in .tfswitchrc file\n')
         return version
 
-    if version := try_read_tfenv(inputs, versions):
+    if 'OPENTOFU' in os.environ:
+        if version := try_read_tfenv('.opentofu-version', inputs, versions):
+            sys.stdout.write(f'Using {version.product} version specified in .opentofu-version file\n')
+            return version
+
+    if version := try_read_tfenv('.terraform-version', inputs, versions):
         sys.stdout.write(f'Using {version.product} version specified in .terraform-version file\n')
         return version
 
diff --git a/image/src/terraform_version/tfenv.py b/image/src/terraform_version/tfenv.py
index 3842faeb..4b2f11ef 100644
--- a/image/src/terraform_version/tfenv.py
+++ b/image/src/terraform_version/tfenv.py
@@ -38,16 +38,17 @@ def parse_tfenv(terraform_version_file: str, versions: Iterable[Version]) -> Ver
     return Version(version)
 
 
-def try_read_tfenv(inputs: InitInputs, versions: Iterable[Version]) -> Optional[Version]:
+def try_read_tfenv(filename: str, inputs: InitInputs, versions: Iterable[Version]) -> Optional[Version]:
     """
     Return the terraform version specified by any .terraform-version file.
 
+    :param filename: The name of the version file
     :param inputs: The action inputs
     :param versions: The available terraform versions
     :returns: The terraform version specified by any .terraform-version file, which may be None.
     """
 
-    tfenv_path = os.path.join(inputs.get('INPUT_PATH', '.'), '.terraform-version')
+    tfenv_path = os.path.join(inputs.get('INPUT_PATH', '.'), filename)
 
     if not os.path.exists(tfenv_path):
         return None
diff --git a/terraform-version/README.md b/terraform-version/README.md
index ecddf9e2..c81e88bb 100644
--- a/terraform-version/README.md
+++ b/terraform-version/README.md
@@ -11,12 +11,13 @@ The version to use is discovered from the first of:
 2. A [`required_version`](https://www.terraform.io/docs/configuration/terraform.html#specifying-a-required-terraform-version)
    constraint in the Terraform configuration. If the constraint is range, the latest matching version is used.
 3. A [tfswitch](https://warrensbox.github.io/terraform-switcher/) `.tfswitchrc` file in the module path
-4. A [tfenv](https://github.com/tfutils/tfenv) `.terraform-version` file in the module path
-5. An [asdf](https://asdf-vm.com/) `.tool-versions` file in the module path or any parent path
-6. An `OPENTOFU_VERSION` environment variable containing a [version constraint](https://www.terraform.io/language/expressions/version-constraints). If the constraint allows multiple versions, the latest matching version is used.
-7. A `TERRAFORM_VERSION` environment variable containing a [version constraint](https://www.terraform.io/language/expressions/version-constraints). If the constraint allows multiple versions, the latest matching version is used.
-8. The Terraform version that created the current state file (best effort).
-9. The latest Terraform version
+4. When using a `dflook/tofu-*` action, a [tofuenv](https://github.com/tofuutils/tofuenv) `.opentofu-version` file in the module path
+5. A [tfenv](https://github.com/tfutils/tfenv) `.terraform-version` file in the module path
+6. An [asdf](https://asdf-vm.com/) `.tool-versions` file in the module path or any parent path
+7. An `OPENTOFU_VERSION` environment variable containing a [version constraint](https://www.terraform.io/language/expressions/version-constraints). If the constraint allows multiple versions, the latest matching version is used.
+8. A `TERRAFORM_VERSION` environment variable containing a [version constraint](https://www.terraform.io/language/expressions/version-constraints). If the constraint allows multiple versions, the latest matching version is used.
+9. The Terraform version that created the current state file (best effort).
+10. The latest Terraform version
 
 The version of Terraform and all required providers will be output to the workflow log.
 
diff --git a/tests/workflows/test-version/tofuenv/.opentofu-version b/tests/workflows/test-version/tofuenv/.opentofu-version
new file mode 100644
index 00000000..ff2fd4fb
--- /dev/null
+++ b/tests/workflows/test-version/tofuenv/.opentofu-version
@@ -0,0 +1 @@
+1.8.5
\ No newline at end of file
diff --git a/tests/workflows/test-version/tofuenv/main.tf b/tests/workflows/test-version/tofuenv/main.tf
new file mode 100644
index 00000000..e69de29b
diff --git a/tofu-version/README.md b/tofu-version/README.md
index 3908a500..0f34dd95 100644
--- a/tofu-version/README.md
+++ b/tofu-version/README.md
@@ -11,12 +11,13 @@ The version to use is discovered from the first of:
 2. A [`required_version`](https://www.terraform.io/docs/configuration/terraform.html#specifying-a-required-terraform-version)
    constraint in the OpenTofu configuration. If the constraint is range, the latest matching version is used.
 3. A [tfswitch](https://warrensbox.github.io/terraform-switcher/) `.tfswitchrc` file in the module path
-4. A [tfenv](https://github.com/tfutils/tfenv) `.terraform-version` file in the module path
-5. An [asdf](https://asdf-vm.com/) `.tool-versions` file in the module path or any parent path
-6. An `OPENTOFU_VERSION` environment variable containing a [version constraint](https://www.terraform.io/language/expressions/version-constraints). If the constraint allows multiple versions, the latest matching version is used.
-7. A `TERRAFORM_VERSION` environment variable containing a [version constraint](https://www.terraform.io/language/expressions/version-constraints). If the constraint allows multiple versions, the latest matching version is used.
-8. The OpenTofu version that created the current state file (best effort).
-9. The latest OpenTofu version
+4. When using a `dflook/tofu-*` action, a [tofuenv](https://github.com/tofuutils/tofuenv) `.opentofu-version` file in the module path
+5. A [tfenv](https://github.com/tfutils/tfenv) `.terraform-version` file in the module path
+6. An [asdf](https://asdf-vm.com/) `.tool-versions` file in the module path or any parent path
+7. An `OPENTOFU_VERSION` environment variable containing a [version constraint](https://www.terraform.io/language/expressions/version-constraints). If the constraint allows multiple versions, the latest matching version is used.
+8. A `TERRAFORM_VERSION` environment variable containing a [version constraint](https://www.terraform.io/language/expressions/version-constraints). If the constraint allows multiple versions, the latest matching version is used.
+9. The OpenTofu version that created the current state file (best effort).
+10. The latest OpenTofu version
 
 The version of OpenTofu and all required providers will be output to the workflow log.