diff --git a/pkg/runner/step_context.go b/pkg/runner/step_context.go
index 9d6eb38f648..b4854b3c53f 100644
--- a/pkg/runner/step_context.go
+++ b/pkg/runner/step_context.go
@@ -173,6 +173,7 @@ func (sc *StepContext) setupShellCommand() common.Executor {
 		if step.WorkingDirectory == "" {
 			step.WorkingDirectory = rc.Run.Workflow.Defaults.Run.WorkingDirectory
 		}
+		step.WorkingDirectory = rc.ExprEval.Interpolate(step.WorkingDirectory)
 		if step.WorkingDirectory != "" {
 			_, err = script.WriteString(fmt.Sprintf("cd %s\n", step.WorkingDirectory))
 			if err != nil {
@@ -181,6 +182,7 @@ func (sc *StepContext) setupShellCommand() common.Executor {
 		}
 
 		run := rc.ExprEval.Interpolate(step.Run)
+		step.Shell = rc.ExprEval.Interpolate(step.Shell)
 
 		if _, err = script.WriteString(run); err != nil {
 			return err
@@ -381,15 +383,13 @@ func getOsSafeRelativePath(s, prefix string) string {
 func (sc *StepContext) getContainerActionPaths(step *model.Step, actionDir string, rc *RunContext) (string, string) {
 	actionName := ""
 	containerActionDir := "."
-	if !rc.Config.BindWorkdir && step.Type() != model.StepTypeUsesActionRemote {
+	if step.Type() != model.StepTypeUsesActionRemote {
 		actionName = getOsSafeRelativePath(actionDir, rc.Config.Workdir)
-		containerActionDir = ActPath + "/actions/" + actionName
+		containerActionDir = rc.Config.ContainerWorkdir() + "/" + actionName
+		actionName = "./" + actionName
 	} else if step.Type() == model.StepTypeUsesActionRemote {
 		actionName = getOsSafeRelativePath(actionDir, rc.ActionCacheDir())
 		containerActionDir = ActPath + "/actions/" + actionName
-	} else if step.Type() == model.StepTypeUsesActionLocal {
-		actionName = getOsSafeRelativePath(actionDir, rc.Config.Workdir)
-		containerActionDir = ActPath + "/actions/" + actionName
 	}
 
 	if actionName == "" {
@@ -422,11 +422,9 @@ func (sc *StepContext) runAction(actionDir string, actionPath string) common.Exe
 		log.Debugf("type=%v actionDir=%s actionPath=%s Workdir=%s ActionCacheDir=%s actionName=%s containerActionDir=%s", step.Type(), actionDir, actionPath, rc.Config.Workdir, rc.ActionCacheDir(), actionName, containerActionDir)
 
 		maybeCopyToActionDir := func() error {
+			sc.Env["GITHUB_ACTION_PATH"] = containerActionDir
 			if step.Type() != model.StepTypeUsesActionRemote {
-				// If the workdir is bound to our repository then we don't need to copy the file
-				if rc.Config.BindWorkdir {
-					return nil
-				}
+				return nil
 			}
 			err := removeGitIgnore(actionDir)
 			if err != nil {
@@ -570,28 +568,29 @@ func (sc *StepContext) execAsComposite(ctx context.Context, step *model.Step, _
 			}
 		}
 
-		if stepClone.Env == nil {
-			stepClone.Env = make(map[string]string)
-		}
-		actionPath := filepath.Join(containerActionDir, actionName)
-
 		env := stepClone.Environment()
-		env["GITHUB_ACTION_PATH"] = actionPath
-		stepClone.Run = strings.ReplaceAll(stepClone.Run, "${{ github.action_path }}", actionPath)
-
 		stepContext := StepContext{
 			RunContext: rcClone,
-			Step:       &stepClone,
+			Step:       step,
 			Env:        mergeMaps(sc.Env, env),
 		}
 
-		// Interpolate the outer inputs into the composite step with items
-		exprEval := sc.NewExpressionEvaluator()
-		for k, v := range stepContext.Step.With {
-			if strings.Contains(v, "inputs") {
-				stepContext.Step.With[k] = exprEval.Interpolate(v)
-			}
+		// Required to set github.action_path
+		if rcClone.Config.Env == nil {
+			// Workaround to get test working
+			rcClone.Config.Env = make(map[string]string)
 		}
+		rcClone.Config.Env["GITHUB_ACTION_PATH"] = sc.Env["GITHUB_ACTION_PATH"]
+		ev := stepContext.NewExpressionEvaluator()
+		// Required to interpolate inputs and github.action_path into the env map
+		stepContext.interpolateEnv(ev)
+		// Required to interpolate inputs, env and github.action_path into run steps
+		ev = stepContext.NewExpressionEvaluator()
+		stepClone.Run = ev.Interpolate(stepClone.Run)
+		stepClone.Shell = ev.Interpolate(stepClone.Shell)
+		stepClone.WorkingDirectory = ev.Interpolate(stepClone.WorkingDirectory)
+
+		stepContext.Step = &stepClone
 
 		executors = append(executors, stepContext.Executor())
 	}
diff --git a/pkg/runner/testdata/local-action-docker-url/push.yml b/pkg/runner/testdata/local-action-docker-url/push.yml
index b8a30defbed..5de1437c699 100644
--- a/pkg/runner/testdata/local-action-docker-url/push.yml
+++ b/pkg/runner/testdata/local-action-docker-url/push.yml
@@ -5,4 +5,5 @@ jobs:
   test:
     runs-on: ubuntu-latest
     steps:
+    - uses: actions/checkout@v2
     - uses: ./actions/docker-url
diff --git a/pkg/runner/testdata/local-action-dockerfile/push.yml b/pkg/runner/testdata/local-action-dockerfile/push.yml
index 2454eed195b..06f9f4c7ef0 100644
--- a/pkg/runner/testdata/local-action-dockerfile/push.yml
+++ b/pkg/runner/testdata/local-action-dockerfile/push.yml
@@ -5,6 +5,7 @@ jobs:
   test:
     runs-on: ubuntu-latest
     steps:
+    - uses: actions/checkout@v2
     - uses: ./actions/docker-local
       with:
         who-to-greet: 'Mona the Octocat'
diff --git a/pkg/runner/testdata/local-action-js/push.yml b/pkg/runner/testdata/local-action-js/push.yml
index 4095fe50b5c..f23a2f094ec 100644
--- a/pkg/runner/testdata/local-action-js/push.yml
+++ b/pkg/runner/testdata/local-action-js/push.yml
@@ -5,6 +5,7 @@ jobs:
   test:
     runs-on: ubuntu-latest
     steps:
+    - uses: actions/checkout@v2
     - uses: ./actions/node12
       with:
         who-to-greet: 'Mona the Octocat'