diff --git a/__tests__/fs-helper.test.ts b/__tests__/fs-helper.test.ts
index 641d9f5..b86174a 100644
--- a/__tests__/fs-helper.test.ts
+++ b/__tests__/fs-helper.test.ts
@@ -1,5 +1,6 @@
 import * as fsHelper from '../src/fs-helper'
 import * as fs from 'fs'
+import * as path from 'path'
 import * as os from 'os'
 import { execSync } from 'child_process'
 
@@ -131,6 +132,33 @@ describe('isDirectory', () => {
   })
 })
 
+describe('isActionRepo', () => {
+  let stagingDir: string
+
+  beforeEach(() => {
+    stagingDir = fsHelper.createTempDir()
+  })
+
+  afterEach(() => {
+    fs.rmSync(stagingDir, { recursive: true })
+  })
+
+  it('returns true if action.yml exists at the root', () => {
+    fs.writeFileSync(path.join(stagingDir, `action.yml`), fileContent)
+    expect(fsHelper.isActionRepo(stagingDir)).toEqual(true)
+  })
+
+  it('returns true if action.yaml exists at the root', () => {
+    fs.writeFileSync(path.join(stagingDir, `action.yaml`), fileContent)
+    expect(fsHelper.isActionRepo(stagingDir)).toEqual(true)
+  })
+
+  it('returns false if action.y(a)ml doesn\'t exist at the root', () => {
+    fs.writeFileSync(path.join(stagingDir, `action.yaaml`), fileContent)
+    expect(fsHelper.isActionRepo(stagingDir)).toEqual(false)
+  })
+})
+
 describe('readFileContents', () => {
   let dir: string
 
diff --git a/src/fs-helper.ts b/src/fs-helper.ts
index 2245132..a191aba 100644
--- a/src/fs-helper.ts
+++ b/src/fs-helper.ts
@@ -91,6 +91,14 @@ export function isDirectory(dirPath: string): boolean {
   return fs.existsSync(dirPath) && fs.lstatSync(dirPath).isDirectory()
 }
 
+export function isActionRepo(stagingDir: string): boolean {
+  return (
+    fs.existsSync(path.join(stagingDir, 'action.yml')) ||
+    fs.existsSync(path.join(stagingDir, 'action.yaml'))
+  )
+}
+
+
 export function readFileContents(filePath: string): Buffer {
   return fs.readFileSync(filePath)
 }
@@ -116,6 +124,7 @@ export function bundleFilesintoDirectory(
   return targetDir
 }
 
+
 // Converts a file path to a filemetadata object by querying the fs for relevant metadata.
 async function fileMetadata(filePath: string): Promise<FileMetadata> {
   const stats = fs.statSync(filePath)
diff --git a/src/main.ts b/src/main.ts
index 7a661ec..2c5c6f0 100644
--- a/src/main.ts
+++ b/src/main.ts
@@ -65,6 +65,13 @@ export async function run(pathInput: string): Promise<void> {
       path = fsHelper.bundleFilesintoDirectory(paths, bundleDir)
     }
 
+    if (!fsHelper.isActionRepo(path)) {
+      core.setFailed(
+        'action.y(a)ml not found. Action packages can be created only for action repositories.'
+      )
+      return
+    }
+
     // Create a temporary directory to store the archives
     const archiveDir = fsHelper.createTempDir()
     tmpDirs.push(archiveDir)