diff --git a/.github/workflows/test-oblt-cli-setup.yml b/.github/workflows/test-oblt-cli-setup.yml
index 6811f036..86d0924f 100644
--- a/.github/workflows/test-oblt-cli-setup.yml
+++ b/.github/workflows/test-oblt-cli-setup.yml
@@ -16,6 +16,9 @@ jobs:
       - version
       - version-file
       - default-version
+      - tools-versions
+      - non-existing-file
+      - both-version-and-version-file
     runs-on: ubuntu-latest
     steps:
       - id: check
@@ -36,6 +39,7 @@ jobs:
         run: |
           version=$(oblt-cli version 2>&1)
           [[ "$version" == *"version 7.2.2"* ]]
+
   version-file:
     runs-on: ubuntu-latest
     steps:
@@ -51,6 +55,7 @@ jobs:
         run: |
           version=$(oblt-cli version 2>&1)
           [[ "$version" == *"version 7.2.5"* ]]
+
   default-version:
     runs-on: ubuntu-latest
     steps:
@@ -60,7 +65,9 @@ jobs:
           github-token: ${{ secrets.OBLT_CLI_GITHUB_TOKEN }}
       - name: Verify oblt-cli version
         run: |
-          oblt-cli version
+          version=$(oblt-cli version 2>&1)
+          default_version=$(cat ./oblt-cli/setup/.default-oblt-cli-version)
+          [[ "$version" == *"version ${default_version}"* ]]
 
   tools-versions:
     runs-on: ubuntu-latest
@@ -82,3 +89,32 @@ jobs:
         run: |
           version=$(oblt-cli version 2>&1)
           [[ "$version" == *"version 7.2.5"* ]]
+
+  non-existing-file:
+    runs-on: ubuntu-latest
+    steps:
+      - uses: actions/checkout@v4
+      - uses: ./oblt-cli/setup
+        id: oblt-cli-setup
+        continue-on-error: true
+        with:
+          github-token: ${{ secrets.OBLT_CLI_GITHUB_TOKEN }}
+          version-file: non-existing-file
+      - name: Verify step failed
+        if: steps.oblt-cli-setup.outcome != 'failure'
+        run: exit 1
+
+  both-version-and-version-file:
+    runs-on: ubuntu-latest
+    steps:
+      - uses: actions/checkout@v4
+      - uses: ./oblt-cli/setup
+        id: oblt-cli-setup
+        with:
+          github-token: ${{ secrets.OBLT_CLI_GITHUB_TOKEN }}
+          version: 7.3.0
+          version-file: non-existing-file
+      - name: Verify oblt-cli version
+        run: |
+          version=$(oblt-cli version 2>&1)
+          [[ "$version" == *"version 7.3.0"* ]]
diff --git a/oblt-cli/setup/.default-oblt-cli-version b/oblt-cli/setup/.default-oblt-cli-version
new file mode 100644
index 00000000..15020207
--- /dev/null
+++ b/oblt-cli/setup/.default-oblt-cli-version
@@ -0,0 +1 @@
+7.3.0
diff --git a/oblt-cli/setup/README.md b/oblt-cli/setup/README.md
index df23d41a..9ffda1d3 100644
--- a/oblt-cli/setup/README.md
+++ b/oblt-cli/setup/README.md
@@ -9,13 +9,13 @@ Setup oblt-cli for use in GitHub Actions workflows.
 
 ## Inputs
 <!--inputs-->
-| Name            | Description                                                                                                                   | Required | Default            |
-|-----------------|-------------------------------------------------------------------------------------------------------------------------------|----------|--------------------|
-| `github-token`  | The GitHub access token.                                                                                                      | `true`   | ` `                |
-| `slack-channel` | The slack channel to notify the status.                                                                                       | `false`  | `#observablt-bots` |
-| `username`      | Username to show in the deployments with oblt-cli, format: [a-z0-9]                                                           | `false`  | `obltmachine`      |
-| `version`       | Install a specific version of oblt-cli                                                                                        | `false`  | `7.2.2`            |
-| `version-file`  | The file to read the version from. E.g. `.oblt-cli-version` or `.tool-versions`. This option takes precedence over `version`. | `false`  | ` `                |
+| Name            | Description                                                                                                        | Required | Default            |
+|-----------------|--------------------------------------------------------------------------------------------------------------------|----------|--------------------|
+| `github-token`  | The GitHub access token.                                                                                           | `true`   | ` `                |
+| `slack-channel` | The slack channel to notify the status.                                                                            | `false`  | `#observablt-bots` |
+| `username`      | Username to show in the deployments with oblt-cli, format: [a-z0-9]                                                | `false`  | `obltmachine`      |
+| `version`       | Install a specific version of oblt-cli. If both `version` and `version-file` are provided, `version` will be used. | `false`  | ` `                |
+| `version-file`  | The file to read the version from. E.g. `.oblt-cli-version` or `.tool-versions` (asdf-vm).                         | `false`  | ` `                |
 <!--/inputs-->
 
 ## Usage
diff --git a/oblt-cli/setup/action.yml b/oblt-cli/setup/action.yml
index 742279b1..09a9d8df 100644
--- a/oblt-cli/setup/action.yml
+++ b/oblt-cli/setup/action.yml
@@ -16,11 +16,10 @@ inputs:
     default: "obltmachine"
     required: false
   version:
-    description: "Install a specific version of oblt-cli"
-    default: "7.2.2"
+    description: "Install a specific version of oblt-cli. If both `version` and `version-file` are provided, `version` will be used."
     required: false
   version-file:
-    description: "The file to read the version from. E.g. `.oblt-cli-version` or `.tool-versions`. This option takes precedence over `version`."
+    description: "The file to read the version from. E.g. `.oblt-cli-version` or `.tool-versions` (asdf-vm)."
     required: false
 
 runs:
diff --git a/oblt-cli/setup/download.sh b/oblt-cli/setup/download.sh
index f43de5cf..83fad576 100755
--- a/oblt-cli/setup/download.sh
+++ b/oblt-cli/setup/download.sh
@@ -29,26 +29,35 @@ else
   exit 1
 fi
 
-OBLT_CLI_VERSION_FILE=${OBLT_CLI_VERSION_FILE:-}
+input_version="${OBLT_CLI_VERSION:-}"
+version_file="${OBLT_CLI_VERSION_FILE:-"${GITHUB_ACTION_PATH}/.default-oblt-cli-version"}"
 
-if [[ -n "${OBLT_CLI_VERSION_FILE}" ]]; then
-  if [[ -f "${OBLT_CLI_VERSION_FILE}" ]]; then
-    if [[ "$(basename "$OBLT_CLI_VERSION_FILE")" == ".tool-versions" ]]; then
-      OBLT_CLI_VERSION=$(grep "^oblt-cli" "${OBLT_CLI_VERSION_FILE}" | awk '{ print $2 }')
-    else
-      OBLT_CLI_VERSION=$(< "${OBLT_CLI_VERSION_FILE}" tr -d '[:space:]')
-    fi
+if [[ -n "${version_file}" && -n "${input_version}" ]]; then
+  echo "::warning title=elastic/oblt-actions/oblt-cli/setup::Both version and version-file are provided. Using version: ${input_version}."
+fi
+
+if [[ -n "${input_version}" ]]; then
+  version="${OBLT_CLI_VERSION}"
+else
+  if [[ -f "${version_file}" ]]; then
+    case $(basename "$version_file") in
+    ".tool-versions")
+      version=$(grep "^oblt-cli" "${version_file}" | awk '{ printf $2 }')
+      ;;
+    *)
+      version=$(tr -d '[:space:]' <"${version_file}")
+      ;;
+    esac
   else
-    echo "[ERROR] ${OBLT_CLI_VERSION_FILE} file not found."
+    echo "::error title=elastic/oblt-actions/oblt-cli/setup::version-file not found: ${version_file}"
     exit 1
   fi
 fi
 
-# Downloads the latest release if OBLT_CLI_VERSION is not set
-gh release download "${OBLT_CLI_VERSION}" \
+gh release download "${version}" \
   --skip-existing \
   --repo elastic/observability-test-environments \
   -p "${PATTERN}" \
   --output - | tar -xz -C "${BIN_DIR}"
-
+echo "::notice title=elastic/oblt-actions/oblt-cli/setup::Downloaded oblt-cli version: ${version}"
 echo "${BIN_DIR}" >> "${GITHUB_PATH}"