diff --git a/src/Runner.Worker/ExecutionContext.cs b/src/Runner.Worker/ExecutionContext.cs
index 1aad95c9c..370960b07 100644
--- a/src/Runner.Worker/ExecutionContext.cs
+++ b/src/Runner.Worker/ExecutionContext.cs
@@ -98,7 +98,7 @@ namespace GitHub.Runner.Worker
         // others
         void ForceTaskComplete();
         void RegisterPostJobStep(IStep step);
-        IStep CreateCompositeStep(string scopeName, IActionRunner step, DictionaryContextData inputsData, Dictionary<string, string> envData);
+        IStep CreateCompositeStep(string scopeName, IActionRunner step, DictionaryContextData inputsData, Dictionary<string, string> envData, string actionDirectory);
     }
 
     public sealed class ExecutionContext : RunnerService, IExecutionContext
@@ -258,7 +258,8 @@ namespace GitHub.Runner.Worker
             string scopeName,
             IActionRunner step,
             DictionaryContextData inputsData,
-            Dictionary<string, string> envData)
+            Dictionary<string, string> envData,
+            string actionDirectory)
         {
             step.ExecutionContext = Root.CreateChild(_record.Id, step.DisplayName, _record.Id.ToString("N"), scopeName, step.Action.ContextName, logger: _logger, insideComposite: true, cancellationTokenSource: CancellationTokenSource.CreateLinkedTokenSource(_cancellationTokenSource.Token));
             step.ExecutionContext.ExpressionValues["inputs"] = inputsData;
@@ -274,6 +275,10 @@ namespace GitHub.Runner.Worker
             {
                 envContext[pair.Key] = new StringContextData(pair.Value ?? string.Empty);
             }
+
+            // Add path to action directory as an environment variable. 
+            envContext["GITHUB_ACTION_PATH"] = new StringContextData(actionDirectory);
+
             step.ExecutionContext.ExpressionValues["env"] = envContext;
 
             return step;
diff --git a/src/Runner.Worker/Handlers/CompositeActionHandler.cs b/src/Runner.Worker/Handlers/CompositeActionHandler.cs
index 50015a574..8dc8b9213 100644
--- a/src/Runner.Worker/Handlers/CompositeActionHandler.cs
+++ b/src/Runner.Worker/Handlers/CompositeActionHandler.cs
@@ -63,7 +63,7 @@ namespace GitHub.Runner.Worker.Handlers
                 actionRunner.Stage = stage;
                 actionRunner.Condition = actionStep.Condition;
 
-                var step = ExecutionContext.CreateCompositeStep(childScopeName, actionRunner, inputsData, Environment);
+                var step = ExecutionContext.CreateCompositeStep(childScopeName, actionRunner, inputsData, Environment, ActionDirectory);
                 compositeSteps.Add(step);
             }