diff --git a/README.md b/README.md
index 6c7ca03..44fb937 100644
--- a/README.md
+++ b/README.md
@@ -66,6 +66,7 @@ Afterward, the `components` and `target` specified via inputs are installed in a
 | `matcher`                | Enable problem matcher to surface build messages and formatting issues                                                  | true          |
 | `rustflags`              | Set the value of `RUSTFLAGS` (set to empty string to avoid overwriting existing flags)                                  | "-D warnings" |
 | `override`               | Setup the last installed toolchain as the default via `rustup override`                                                 | true          |
+| `rust-src-dir`           | Path from root directory to directory with the Rust source directory (if its not in the root of the repository)         |               |
 
 [`Swatinem/rust-cache`]: https://github.com/Swatinem/rust-cache
 
diff --git a/action.yml b/action.yml
index 328965d..35e0d30 100644
--- a/action.yml
+++ b/action.yml
@@ -69,6 +69,9 @@ inputs:
     description: "Setup the last installed toolchain as the default via `rustup override`"
     required: false
     default: "true"
+  rust-src-dir:
+    description: "Specify path from root directory to the Rust source directory. By default root directory will be used."
+    required: false
 
 outputs:
   rustc-version:
@@ -163,9 +166,13 @@ runs:
         targets: ${{inputs.target}}
         components: ${{inputs.components}}
         override: ${{inputs.override}}
+        rust_src_dir: ${{inputs.rust-src-dir}}
       shell: bash
       run: |
-        if [[ -z "$toolchain" && ( -f "rust-toolchain" || -f "rust-toolchain.toml" ) ]]
+        if [[ -d "$rust_src_dir" ]]; then
+          cd "$rust_src_dir"
+        fi
+        if [[ -z "$toolchain" && ( -f "rust-toolchain" || -f "rust-toolchain.toml") ]]
         then
           # Install the toolchain as specified in the file
           # rustup show is the old way that implicitly installed a toolchain
@@ -222,7 +229,7 @@ runs:
       if: inputs.cache == 'true'
       uses: Swatinem/rust-cache@v2
       with:
-        workspaces: ${{inputs.cache-workspaces}}
+        workspaces: ${{ inputs.cache-workspaces || inputs.rust-src-dir }}
         cache-directories: ${{inputs.cache-directories}}
         cache-on-failure: ${{inputs.cache-on-failure}}
         cache-bin: ${{inputs.cache-bin}}