diff --git a/packages/tool-cache/__tests__/data/test.tar.gz b/packages/tool-cache/__tests__/data/test.tar.gz
new file mode 100644
index 00000000..9ba362f6
Binary files /dev/null and b/packages/tool-cache/__tests__/data/test.tar.gz differ
diff --git a/packages/tool-cache/__tests__/data/test.tar.xz b/packages/tool-cache/__tests__/data/test.tar.xz
new file mode 100644
index 00000000..5993e1fd
Binary files /dev/null and b/packages/tool-cache/__tests__/data/test.tar.xz differ
diff --git a/packages/tool-cache/__tests__/tool-cache.test.ts b/packages/tool-cache/__tests__/tool-cache.test.ts
index 59315e5c..35f90be1 100644
--- a/packages/tool-cache/__tests__/tool-cache.test.ts
+++ b/packages/tool-cache/__tests__/tool-cache.test.ts
@@ -197,6 +197,62 @@ describe('@actions/tool-cache', function() {
         await io.rmRF(tempDir)
       }
     })
+  } else {
+    it('extract .tar.gz', async () => {
+      const tempDir = path.join(tempPath, 'test-install-tar.gz')
+
+      await io.mkdirP(tempDir)
+
+      // copy the .tar.gz file to the test dir
+      const _tgzFile: string = path.join(tempDir, 'test.tar.gz')
+      await io.cp(path.join(__dirname, 'data', 'test.tar.gz'), _tgzFile)
+
+      // extract/cache
+      const extPath: string = await tc.extractTar(_tgzFile)
+      await tc.cacheDir(extPath, 'my-tgz-contents', '1.1.0')
+      const toolPath: string = tc.find('my-tgz-contents', '1.1.0')
+
+      expect(fs.existsSync(toolPath)).toBeTruthy()
+      expect(fs.existsSync(`${toolPath}.complete`)).toBeTruthy()
+      expect(fs.existsSync(path.join(toolPath, 'file.txt'))).toBeTruthy()
+      expect(
+        fs.existsSync(path.join(toolPath, 'file-with-ç-character.txt'))
+      ).toBeTruthy()
+      expect(
+        fs.existsSync(path.join(toolPath, 'folder', 'nested-file.txt'))
+      ).toBeTruthy()
+      expect(
+        fs.readFileSync(
+          path.join(toolPath, 'folder', 'nested-file.txt'),
+          'utf8'
+        )
+      ).toBe('folder/nested-file.txt contents')
+    })
+
+    it('extract .tar.xz', async () => {
+      const tempDir = path.join(tempPath, 'test-install-tar.xz')
+
+      await io.mkdirP(tempDir)
+
+      // copy the .tar.gz file to the test dir
+      const _txzFile: string = path.join(tempDir, 'test.tar.xz')
+      await io.cp(path.join(__dirname, 'data', 'test.tar.xz'), _txzFile)
+
+      // extract/cache
+      const extPath: string = await tc.extractTar(_txzFile, undefined, 'x')
+      await tc.cacheDir(extPath, 'my-txz-contents', '1.1.0')
+      const toolPath: string = tc.find('my-txz-contents', '1.1.0')
+
+      expect(fs.existsSync(toolPath)).toBeTruthy()
+      expect(fs.existsSync(`${toolPath}.complete`)).toBeTruthy()
+      expect(fs.existsSync(path.join(toolPath, 'bar.txt'))).toBeTruthy()
+      expect(
+        fs.existsSync(path.join(toolPath, 'foo', 'hello.txt'))
+      ).toBeTruthy()
+      expect(
+        fs.readFileSync(path.join(toolPath, 'foo', 'hello.txt'), 'utf8')
+      ).toBe('foo/hello: world')
+    })
   }
 
   it('installs a zip and finds it', async () => {
diff --git a/packages/tool-cache/src/tool-cache.ts b/packages/tool-cache/src/tool-cache.ts
index c4c71f1c..0dd556c3 100644
--- a/packages/tool-cache/src/tool-cache.ts
+++ b/packages/tool-cache/src/tool-cache.ts
@@ -187,16 +187,21 @@ export async function extract7z(
  *
  * @param file     path to the tar
  * @param dest     destination directory. Optional.
+ * @param flags    flags for the tar. Optional.
  * @returns        path to the destination directory
  */
-export async function extractTar(file: string, dest?: string): Promise<string> {
+export async function extractTar(
+  file: string,
+  dest?: string,
+  flags: string = 'xz'
+): Promise<string> {
   if (!file) {
     throw new Error("parameter 'file' is required")
   }
 
   dest = dest || (await _createExtractFolder(dest))
   const tarPath: string = await io.which('tar', true)
-  await exec(`"${tarPath}"`, ['xzC', dest, '-f', file])
+  await exec(`"${tarPath}"`, [flags, '-C', dest, '-f', file])
 
   return dest
 }