diff --git a/README.md b/README.md
index ee5557b..36f0d09 100644
--- a/README.md
+++ b/README.md
@@ -17,6 +17,7 @@ The V3 offers:
 - Adds GOBIN to the PATH
 - Proxy Support
 - Check latest version
+- Caching packages dependencies
 - Bug Fixes (including issues around version matching and semver)
 
 The action will first check the local cache for a version match. If a version is not found locally, it will pull it from the `main` branch of the [go-versions](https://github.com/actions/go-versions/blob/main/versions-manifest.json) repository. On miss or failure, it will fall back to downloading directly from [go dist](https://storage.googleapis.com/golang). To change the default behavior, please use the [check-latest input](#check-latest-version).
@@ -92,6 +93,37 @@ steps:
   - run: go run hello.go
 ```
 
+## Caching packages dependencies:
+
+The action has a built-in functionality for caching and restoring dependencies. It uses [actions/cache](https://github.com/actions/cache) under the hood for caching dependencies but requires less configuration settings.The `cache` input is optional, and caching is turned off by default.
+
+The action defaults to search for the dependency file - go.sum in the repository root, and uses its hash as a part of the cache key. Use `cache-dependency-path` input for cases when multiple dependency files are used, or they are located in different subdirectories.
+
+**Caching packages dependencies without specifying dependency file path**
+```yaml
+steps:
+  - uses: actions/checkout@v3
+  - uses: actions/setup-go@v3
+    with:
+      go-version: '1.14'
+      check-latest: true
+      cache: true
+  - run: go run hello.go
+```
+
+**Caching packages dependencies in monorepos**
+```yaml
+steps:
+  - uses: actions/checkout@v3
+  - uses: actions/setup-go@v3
+    with:
+      go-version: '1.14'
+      check-latest: true
+      cache: true
+      cache-dependency-path: subdir/go.sum
+  - run: go run hello.go
+```
+
 ## Matrix Testing:
 ```yaml
 jobs:
diff --git a/action.yml b/action.yml
index 834894c..00f5a35 100644
--- a/action.yml
+++ b/action.yml
@@ -13,7 +13,7 @@ inputs:
   cache:
     description: Used to specify whether go-modules caching is needed. Set to true, if you'd like to enable caching.
   cache-dependency-path:
-    description: 'Used to specify the path to a dependency file: go.sum'
+    description: 'Used to specify the path to a dependency file - go.sum'
 runs:
   using: 'node16'
   main: 'dist/setup/index.js'