diff --git a/.github/workflows/test.yml b/.github/workflows/test.yml
index fb8505e..0c57aab 100644
--- a/.github/workflows/test.yml
+++ b/.github/workflows/test.yml
@@ -540,7 +540,6 @@ jobs:
       - name: Install from custom manifest file
         uses: ./
         with:
-          version: 0.7.12-alpha.1
           manifest-file: "https://raw.githubusercontent.com/astral-sh/setup-uv/${{ github.ref }}/__tests__/download/custom-manifest.json"
       - run: uv sync
         working-directory: __tests__/fixtures/uv-project
diff --git a/README.md b/README.md
index a75541d..895ffee 100644
--- a/README.md
+++ b/README.md
@@ -430,6 +430,11 @@ This is useful if you maintain your own uv builds or want to override the defaul
     manifest-file: "https://example.com/my-custom-manifest.json"
 ```
 
+> [!NOTE]
+> When you use a custom manifest file and do not set the `version` input, its default value is `latest`.
+> This means the action will install the latest version available in the custom manifest file.
+> This is different from the default behavior of installing the latest version from the official uv releases.
+
 ## How it works
 
 This action downloads uv from the uv repo's official
diff --git a/dist/setup/index.js b/dist/setup/index.js
index eed451c..a096a2b 100644
--- a/dist/setup/index.js
+++ b/dist/setup/index.js
@@ -124735,11 +124735,21 @@ async function downloadVersion(downloadUrl, artifactName, platform, arch, versio
 function getExtension(platform) {
     return platform === "pc-windows-msvc" ? ".zip" : ".tar.gz";
 }
-async function resolveVersion(versionInput, githubToken) {
+async function resolveVersion(versionInput, manifestFile, githubToken) {
     core.debug(`Resolving version: ${versionInput}`);
-    const version = versionInput === "latest"
-        ? await getLatestVersion(githubToken)
-        : versionInput;
+    let version;
+    if (manifestFile) {
+        version =
+            versionInput === "latest"
+                ? await (0, version_manifest_1.getLatestKnownVersion)(manifestFile)
+                : versionInput;
+    }
+    else {
+        version =
+            versionInput === "latest"
+                ? await getLatestVersion(githubToken)
+                : versionInput;
+    }
     if (tc.isExplicitVersion(version)) {
         core.debug(`Version ${version} is an explicit version.`);
         return version;
@@ -125105,7 +125115,7 @@ function detectEmptyWorkdir() {
     }
 }
 async function setupUv(platform, arch, checkSum, githubToken) {
-    const resolvedVersion = await determineVersion();
+    const resolvedVersion = await determineVersion(inputs_1.manifestFile);
     const toolCacheResult = (0, download_version_1.tryGetFromToolCache)(arch, resolvedVersion);
     if (toolCacheResult.installedPath) {
         core.info(`Found uv in tool-cache for ${toolCacheResult.version}`);
@@ -125127,16 +125137,16 @@ async function setupUv(platform, arch, checkSum, githubToken) {
         version: downloadVersionResult.version,
     };
 }
-async function determineVersion() {
+async function determineVersion(manifestFile) {
     if (inputs_1.version !== "") {
-        return await (0, download_version_1.resolveVersion)(inputs_1.version, inputs_1.githubToken);
+        return await (0, download_version_1.resolveVersion)(inputs_1.version, manifestFile, inputs_1.githubToken);
     }
     const versionFromUvToml = (0, config_file_1.getUvVersionFromConfigFile)(`${inputs_1.workingDirectory}${path.sep}uv.toml`);
     const versionFromPyproject = (0, config_file_1.getUvVersionFromConfigFile)(`${inputs_1.workingDirectory}${path.sep}pyproject.toml`);
     if (versionFromUvToml === undefined && versionFromPyproject === undefined) {
         core.info("Could not determine uv version from uv.toml or pyproject.toml. Falling back to latest.");
     }
-    return await (0, download_version_1.resolveVersion)(versionFromUvToml || versionFromPyproject || "latest", inputs_1.githubToken);
+    return await (0, download_version_1.resolveVersion)(versionFromUvToml || versionFromPyproject || "latest", manifestFile, inputs_1.githubToken);
 }
 function addUvToPathAndOutput(cachedPath) {
     core.setOutput("uv-path", `${cachedPath}${path.sep}uv`);
diff --git a/src/download/download-version.ts b/src/download/download-version.ts
index e06efae..3204e26 100644
--- a/src/download/download-version.ts
+++ b/src/download/download-version.ts
@@ -7,7 +7,10 @@ import { OWNER, REPO, TOOL_CACHE_NAME } from "../utils/constants";
 import type { Architecture, Platform } from "../utils/platforms";
 import { validateChecksum } from "./checksum/checksum";
 import { Octokit } from "../utils/octokit";
-import { getDownloadUrl } from "./version-manifest";
+import {
+  getDownloadUrl,
+  getLatestKnownVersion as getLatestVersionInManifest,
+} from "./version-manifest";
 
 export function tryGetFromToolCache(
   arch: Architecture,
@@ -127,13 +130,22 @@ function getExtension(platform: Platform): string {
 
 export async function resolveVersion(
   versionInput: string,
+  manifestFile: string | undefined,
   githubToken: string,
 ): Promise<string> {
   core.debug(`Resolving version: ${versionInput}`);
-  const version =
-    versionInput === "latest"
-      ? await getLatestVersion(githubToken)
-      : versionInput;
+  let version: string;
+  if (manifestFile) {
+    version =
+      versionInput === "latest"
+        ? await getLatestVersionInManifest(manifestFile)
+        : versionInput;
+  } else {
+    version =
+      versionInput === "latest"
+        ? await getLatestVersion(githubToken)
+        : versionInput;
+  }
   if (tc.isExplicitVersion(version)) {
     core.debug(`Version ${version} is an explicit version.`);
     return version;
diff --git a/src/setup-uv.ts b/src/setup-uv.ts
index de9129d..f6ed2af 100644
--- a/src/setup-uv.ts
+++ b/src/setup-uv.ts
@@ -87,7 +87,7 @@ async function setupUv(
   checkSum: string | undefined,
   githubToken: string,
 ): Promise<{ uvDir: string; version: string }> {
-  const resolvedVersion = await determineVersion();
+  const resolvedVersion = await determineVersion(manifestFile);
   const toolCacheResult = tryGetFromToolCache(arch, resolvedVersion);
   if (toolCacheResult.installedPath) {
     core.info(`Found uv in tool-cache for ${toolCacheResult.version}`);
@@ -127,9 +127,11 @@ async function setupUv(
   };
 }
 
-async function determineVersion(): Promise<string> {
+async function determineVersion(
+  manifestFile: string | undefined,
+): Promise<string> {
   if (versionInput !== "") {
-    return await resolveVersion(versionInput, githubToken);
+    return await resolveVersion(versionInput, manifestFile, githubToken);
   }
   const versionFromUvToml = getUvVersionFromConfigFile(
     `${workingDirectory}${path.sep}uv.toml`,
@@ -144,6 +146,7 @@ async function determineVersion(): Promise<string> {
   }
   return await resolveVersion(
     versionFromUvToml || versionFromPyproject || "latest",
+    manifestFile,
     githubToken,
   );
 }