diff --git a/action.yaml b/action.yaml
index c441435..577e96e 100644
--- a/action.yaml
+++ b/action.yaml
@@ -25,6 +25,12 @@ inputs:
     digger-version:
         description: Version of digger to use (must match a release tag)
         required: true
+    secrets-context:
+        description: "Pre-encoded secrets context"
+        required: true
+    variables-context:
+        description: "Pre-encoded variables context"
+        required: true
 
 runs:
     using: composite
@@ -65,7 +71,7 @@ runs:
           env:
               DIGGER_VERSION: ${{ inputs.digger-version }}
 
-        - name: Run Digger
+        - name: Run Digger with Environment Setup
           shell: bash
           env:
               AWS_ACCESS_KEY_ID: ${{ inputs.aws-access-key-id }}
@@ -74,4 +80,7 @@ runs:
               AWS_REGION: ${{ inputs.aws-region }}
               AWS_S3_BUCKET: ${{ inputs.aws-bucket }}
               DIGGER_RUN_SPEC: ${{ inputs.digger-spec }}
-          run: ./digger
+              SECRETS_CONTEXT: ${{ inputs.secrets-context }}
+              VARIABLES_CONTEXT: ${{ inputs.variables-context }}
+              ENV_CONTEXT: ${{ toJson(env) }}
+          run: ${GITHUB_ACTION_PATH}/setup-env.sh ./digger
\ No newline at end of file
diff --git a/setup-env.sh b/setup-env.sh
new file mode 100755
index 0000000..e8069d2
--- /dev/null
+++ b/setup-env.sh
@@ -0,0 +1,79 @@
+#!/bin/bash
+
+# Function to validate environment variable name
+is_valid_env_name() {
+    local name="$1"
+    [[ $name =~ ^[a-zA-Z_][a-zA-Z0-9_]*$ ]]
+}
+
+# Function to parse context JSON
+# $1: variable name
+# $2: should_parse flag (true/false)
+parse_context_json() {
+    local json_var="$1"
+    local should_parse="$2"
+    local json_content="${!json_var}"
+
+    if [ -n "$json_content" ]; then
+        # Check if content is valid JSON
+        if echo "$json_content" | jq empty 2>/dev/null; then
+            if [ "$should_parse" = "true" ]; then
+                # Parse JSON into individual env vars
+                while IFS='=' read -r key value; do
+                    if [ -n "$key" ] && is_valid_env_name "$key"; then
+                        # Remove quotes from value
+                        value="${value%\"}"
+                        value="${value#\"}"
+                        export "$key=$value"
+                    fi
+                done < <(echo "$json_content" | jq -r 'to_entries | .[] | .key + "=" + (.value | tostring)')
+            else
+                # Pass through JSON as-is
+                if is_valid_env_name "$json_var"; then
+                    export "$json_var=$json_content"
+                fi
+            fi
+        else
+            # Not JSON, export as-is
+            if is_valid_env_name "$json_var"; then
+                export "$json_var=$json_content"
+            fi
+        fi
+    fi
+}
+
+# Process SECRETS_CONTEXT - parse into individual vars
+parse_context_json "SECRETS_CONTEXT" "true"
+
+# Process VARIABLES_CONTEXT - parse into individual vars
+parse_context_json "VARIABLES_CONTEXT" "true"
+
+# Export all regular environment variables
+while IFS='=' read -r key value; do
+    if [[ "$key" != "SECRETS_CONTEXT" && "$key" != "VARIABLES_CONTEXT" ]]; then
+        if is_valid_env_name "$key"; then
+            # Pass through all other environment variables
+            parse_context_json "$key" "false"
+        fi
+    fi
+done < <(env)
+
+# Handle TF_VAR_ environment variables
+while IFS='=' read -r key value; do
+    if [[ $key == TF_VAR_* ]]; then
+        var_name="${key#TF_VAR_}"
+        lowercase_key="TF_VAR_${var_name,,}"
+
+        if [ -z "${!lowercase_key}" ] && is_valid_env_name "$lowercase_key"; then
+            export "$lowercase_key=$value"
+        fi
+    fi
+done < <(env)
+
+# If digger-spec is provided, export it
+if [ -n "$INPUT_DIGGER_SPEC" ]; then
+    export DIGGER_RUN_SPEC="$INPUT_DIGGER_SPEC"
+fi
+
+# Execute the command passed as arguments
+exec "$@"
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