diff --git a/.github/workflows/test.yml b/.github/workflows/test.yml
index cc23018a9..9e4fc7dac 100644
--- a/.github/workflows/test.yml
+++ b/.github/workflows/test.yml
@@ -90,3 +90,24 @@ jobs:
 
     - name: Run simple code
       run: python -c 'import math; print(math.factorial(5))'
+
+  setup-pypy:
+    name: Setup PyPy ${{ matrix.os }}
+    runs-on: ${{ matrix.os }}
+    strategy:
+      fail-fast: false
+      matrix:
+        os: [macos-latest, windows-latest, ubuntu-16.04, ubuntu-18.04]
+    steps:
+    - name: Checkout
+      uses: actions/checkout@v2
+
+    - name: setup-python pypy3
+      uses: ./
+      with:
+        python-version: 'pypy3'
+
+    - name: setup-python pypy2
+      uses: ./
+      with:
+        python-version: 'pypy2'
diff --git a/dist/index.js b/dist/index.js
index 7fa762a1e..41cfa78b7 100644
--- a/dist/index.js
+++ b/dist/index.js
@@ -6445,7 +6445,7 @@ function installPython(workingDirectory) {
     return __awaiter(this, void 0, void 0, function* () {
         const options = {
             cwd: workingDirectory,
-            env: Object.assign(Object.assign({}, process.env), IS_LINUX && { 'LD_LIBRARY_PATH': path.join(workingDirectory, 'lib') }),
+            env: Object.assign(Object.assign({}, process.env), (IS_LINUX && { LD_LIBRARY_PATH: path.join(workingDirectory, 'lib') })),
             silent: true,
             listeners: {
                 stdout: (data) => {
@@ -6718,7 +6718,7 @@ function binDir(installDir) {
 // For example, PyPy 7.0 contains Python 2.7, 3.5, and 3.6-alpha.
 // We only care about the Python version, so we don't use the PyPy version for the tool cache.
 function usePyPy(majorVersion, architecture) {
-    const findPyPy = tc.find.bind(undefined, 'PyPy', majorVersion.toString());
+    const findPyPy = tc.find.bind(undefined, 'PyPy', majorVersion);
     let installDir = findPyPy(architecture);
     if (!installDir && IS_WINDOWS) {
         // PyPy only precompiles binaries for x86, but the architecture parameter defaults to x64.
@@ -6765,7 +6765,9 @@ function useCpythonVersion(version, architecture) {
         }
         core.exportVariable('pythonLocation', installDir);
         if (IS_LINUX) {
-            const libPath = (process.env.LD_LIBRARY_PATH) ? `:${process.env.LD_LIBRARY_PATH}` : '';
+            const libPath = process.env.LD_LIBRARY_PATH
+                ? `:${process.env.LD_LIBRARY_PATH}`
+                : '';
             const pyLibPath = path.join(installDir, 'lib');
             if (!libPath.split(':').includes(pyLibPath)) {
                 core.exportVariable('LD_LIBRARY_PATH', pyLibPath + libPath);
@@ -6819,9 +6821,10 @@ function findPythonVersion(version, architecture) {
     return __awaiter(this, void 0, void 0, function* () {
         switch (version.toUpperCase()) {
             case 'PYPY2':
-                return usePyPy(2, architecture);
+                return usePyPy('2', architecture);
             case 'PYPY3':
-                return usePyPy(3, architecture);
+                // keep pypy3 pointing to 3.6 for backward compatibility
+                return usePyPy('3.6', architecture);
             default:
                 return yield useCpythonVersion(version, architecture);
         }
diff --git a/src/find-python.ts b/src/find-python.ts
index 8bc8d5bc4..6702430c5 100644
--- a/src/find-python.ts
+++ b/src/find-python.ts
@@ -37,8 +37,11 @@ function binDir(installDir: string): string {
 // A particular version of PyPy may contain one or more versions of the Python interpreter.
 // For example, PyPy 7.0 contains Python 2.7, 3.5, and 3.6-alpha.
 // We only care about the Python version, so we don't use the PyPy version for the tool cache.
-function usePyPy(majorVersion: 2 | 3, architecture: string): InstalledVersion {
-  const findPyPy = tc.find.bind(undefined, 'PyPy', majorVersion.toString());
+function usePyPy(
+  majorVersion: '2' | '3.6',
+  architecture: string
+): InstalledVersion {
+  const findPyPy = tc.find.bind(undefined, 'PyPy', majorVersion);
   let installDir: string | null = findPyPy(architecture);
 
   if (!installDir && IS_WINDOWS) {
@@ -188,9 +191,10 @@ export async function findPythonVersion(
 ): Promise<InstalledVersion> {
   switch (version.toUpperCase()) {
     case 'PYPY2':
-      return usePyPy(2, architecture);
+      return usePyPy('2', architecture);
     case 'PYPY3':
-      return usePyPy(3, architecture);
+      // keep pypy3 pointing to 3.6 for backward compatibility
+      return usePyPy('3.6', architecture);
     default:
       return await useCpythonVersion(version, architecture);
   }