A rotary valve can include a housing, a manifold with multiple flow paths can be fixedly mounted to the housing. A rotary actuator with a first surface can be rotatably mounted within the housing, and a valve seat with a second surface can be fixedly attached to the manifold, where the second surface can sealingly engage the first surface. The rotary actuator can include a gap that selectively aligns with respective ones of valve seat ports as the rotary actuator rotates relative to the valve seat, thereby selectively pressurizing one or more actuators. A system and method can include a rotary valve that selectively causes pads to extend at a predetermined orientation in the wellbore to steer a drill bit. The azimuthal orientation of a rotary actuator of the valve can determine which pads are extended and which are retracted as the drill bit rotates.