diff --git a/__tests__/data/package.json b/__tests__/data/package.json
new file mode 100644
index 00000000..e537e200
--- /dev/null
+++ b/__tests__/data/package.json
@@ -0,0 +1,5 @@
+{
+  "engines": {
+    "node": ">=14.0.0"
+  }
+}
diff --git a/__tests__/installer.test.ts b/__tests__/installer.test.ts
index cd536192..d04eb582 100644
--- a/__tests__/installer.test.ts
+++ b/__tests__/installer.test.ts
@@ -591,6 +591,35 @@ describe('setup-node', () => {
       );
     });
 
+    it('reads package.json as node-version-file if provided', async () => {
+      // Arrange
+      const versionSpec = `{
+  \"engines\": {
+    \"node\": \">=14.0.0\"
+  }
+}
+`;
+      const versionFile = 'package.json';
+      const expectedVersionSpec = '14';
+      process.env['GITHUB_WORKSPACE'] = path.join(__dirname, 'data');
+      inputs['node-version-file'] = versionFile;
+
+      parseNodeVersionSpy.mockImplementation(() => expectedVersionSpec);
+      existsSpy.mockImplementationOnce(
+        input => input === path.join(__dirname, 'data', versionFile)
+      );
+      // Act
+      await main.run();
+
+      // Assert
+      expect(existsSpy).toHaveBeenCalledTimes(1);
+      expect(existsSpy).toHaveReturnedWith(true);
+      expect(parseNodeVersionSpy).toHaveBeenCalledWith(versionSpec);
+      expect(logSpy).toHaveBeenCalledWith(
+        `Resolved ${versionFile} as ${expectedVersionSpec}`
+      );
+    });
+
     it('both node-version-file and node-version are provided', async () => {
       inputs['node-version'] = '12';
       const versionSpec = 'v14';
diff --git a/src/installer.ts b/src/installer.ts
index 019f2eda..8fa44b01 100644
--- a/src/installer.ts
+++ b/src/installer.ts
@@ -495,16 +495,24 @@ function translateArchToDistUrl(arch: string): string {
 }
 
 export function parseNodeVersionFile(contents: string): string {
-  const found = contents.match(/^(?:nodejs\s+)?v?(?<version>[^\s]+)$/m);
-  const nodeVersion = found?.groups?.version;
-
-  if (nodeVersion) {
-    return nodeVersion;
-  }
-
   // In the case of an unknown format,
   // return as is and evaluate the version separately.
-  return contents.trim();
+  let nodeVersion = contents.trim();
+
+  try {
+    // Assume all content parseable as JSON is a valid,
+    // NPM `package.json` file
+    const packageJson = JSON.parse(contents);
+    nodeVersion = packageJson.engines.node || nodeVersion;
+
+    if (!nodeVersion) throw
+  } catch (err) {
+    // If not, assume it is a node version file
+    const found = nodeVersion.match(/^(?:nodejs\s+)?v?(?<version>[^\s]+)$/m);
+    nodeVersion = found?.groups?.version || nodeVersion;
+  }
+
+  return nodeVersion;
 }
 
 function isLatestSyntax(versionSpec): boolean {