diff --git a/parsers/manifest_parser.go b/parsers/manifest_parser.go
index 725155906..6c831de01 100644
--- a/parsers/manifest_parser.go
+++ b/parsers/manifest_parser.go
@@ -874,7 +874,11 @@ func (dm *YAMLParser) ComposeActions(manifestFilePath string, actions map[string
 
 		// update the action (of type Action) to set its name
 		// here key name is the action name
-		action.Name = actionName
+		if i, ok := packageInputs.Inputs[wskenv.GetEnvVarName(actionName)]; ok {
+			action.Name = i.Value.(string)
+		} else {
+			action.Name = wskenv.ConvertSingleName(actionName)
+		}
 
 		// Create action data object from client library
 		wskaction := new(whisk.Action)
@@ -946,7 +950,7 @@ func (dm *YAMLParser) ComposeActions(manifestFilePath string, actions map[string
 		if wskaction.Annotations != nil {
 			if webaction.HasAnnotation(&wskaction.Annotations, webaction.REQUIRE_WHISK_AUTH) {
 				_, errorParser = webaction.ValidateRequireWhiskAuthAnnotationValue(
-					actionName,
+					action.Name,
 					wskaction.Annotations.GetValue(webaction.REQUIRE_WHISK_AUTH))
 			}
 			if errorParser != nil {
@@ -967,7 +971,7 @@ func (dm *YAMLParser) ComposeActions(manifestFilePath string, actions map[string
 		}
 
 		// Set other top-level values for the action (e.g., name, version, publish, etc.)
-		wskaction.Name = actionName
+		wskaction.Name = action.Name
 		pub := false
 		wskaction.Publish = &pub
 		wskaction.Version = wskenv.ConvertSingleName(action.Version)
diff --git a/parsers/manifest_parser_test.go b/parsers/manifest_parser_test.go
index 434cc56f2..284a20d3c 100644
--- a/parsers/manifest_parser_test.go
+++ b/parsers/manifest_parser_test.go
@@ -1969,6 +1969,28 @@ func TestPackageName_Env_Var(t *testing.T) {
 	}
 }
 
+func TestActionName_Env_Var(t *testing.T) {
+	testAction := "test_action"
+	os.Setenv("action_name", testAction)
+	file := "../tests/dat/manifest_validate_action_name_env_var.yaml"
+	p, m, _ := testLoadParseManifest(t, file)
+	actions, err := p.ComposeActionsFromAllPackages(m, m.Filepath, whisk.KeyValue{}, map[string]PackageInputs{})
+	if err != nil {
+		assert.Fail(t, "Failed to compose actions")
+	}
+	packageName := "helloworld"
+
+	assert.Equal(t, 1, len(m.Packages[packageName].Actions), "Get action list failed.")
+	action := actions[0]
+	wskprint.PrintlnOpenWhiskVerbose(false, fmt.Sprintf("actionName: %v", action))
+	switch action.Action.Name {
+	case testAction:
+		assert.Equal(t, testAction, action.Action.Name, "Get action name failed.")
+	default:
+		t.Error("Get action name failed")
+	}
+}
+
 func TestRuleName_Env_Var(t *testing.T) {
 	// read and parse manifest file with env var for rule name, and rule trigger and action
 	testRule := "test_rule"
diff --git a/tests/dat/manifest_validate_action_name_env_var.yaml b/tests/dat/manifest_validate_action_name_env_var.yaml
new file mode 100644
index 000000000..314fa3f75
--- /dev/null
+++ b/tests/dat/manifest_validate_action_name_env_var.yaml
@@ -0,0 +1,22 @@
+#
+# Licensed to the Apache Software Foundation (ASF) under one or more
+# contributor license agreements.  See the NOTICE file distributed with
+# this work for additional information regarding copyright ownership.
+# The ASF licenses this file to You under the Apache License, Version 2.0
+# (the "License"); you may not use this file except in compliance with
+# the License.  You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+#
+
+packages:
+    helloworld:
+        actions:
+            $action_name:
+                function: actions/hello.js