diff --git a/modules/installed/lib/auth.py b/modules/installed/lib/auth.py
index e75cedfdc..3adc5b9e9 100644
--- a/modules/installed/lib/auth.py
+++ b/modules/installed/lib/auth.py
@@ -7,7 +7,8 @@
 # on 1 February 2011.
 
 import cherrypy
-import urllib, hashlib
+import urllib
+from passlib.hash import bcrypt
 import cfg
 import random
 import time
@@ -31,7 +32,7 @@ def check_credentials(username, passphrase):
         u = None
     # hash the password whether the user exists, to foil timing
     # side-channel attacks
-    pass_hash = hashlib.md5(passphrase).hexdigest()
+    pass_hash = bcrypt.encrypt(passphrase, salt=u['salt'])
 
     if u is None or u['passphrase'] != pass_hash:
         error = "Bad user-name or password."
diff --git a/tests/auth_test.py b/tests/auth_test.py
new file mode 100644
index 000000000..861a51d59
--- /dev/null
+++ b/tests/auth_test.py
@@ -0,0 +1,70 @@
+#! /usr/bin/env python
+# -*- mode: python; mode: auto-fill; fill-column: 80 -*-
+
+import user_store, auth
+from passlib.hash import bcrypt
+from logger import Logger
+import cfg
+import unittest
+import cherrypy
+import plugin_mount
+import os
+from model import User
+cfg.log = Logger()
+
+cherrypy.log.access_file = None
+
+class Auth(unittest.TestCase):
+    """Test check_credentials function of auth to confirm it works as expected"""
+
+    def setUp(self):
+        cfg.user_db = os.path.join(cfg.file_root, "tests/testdata/users");
+        cfg.users = plugin_mount.UserStoreModule.get_plugins()[0]
+
+    def tearDown(self):
+        for user in cfg.users.get_all():
+            cfg.users.remove(user[0])
+        cfg.users.close()
+
+    def test_password_check(self):
+        self.add_user("test_user", "password")
+
+        # check_credentials returns None if there is no error, or returns error string
+        self.assertIsNone(auth.check_credentials("test_user", "password"))
+        self.assertIsNotNone(auth.check_credentials("test_user", "wrong"))
+
+    def test_salt_check(self):
+        test_user = self.add_user("test_user", "password", "abcdefghijklmnopqrstuv")
+        self.assertIsNotNone(auth.check_credentials("test_user", "password"))
+
+    def test_salt_is_random(self):
+        test_user1 = self.add_user("test_user1", "password")
+        test_user2 = self.add_user("test_user2", "password")
+        self.assertNotEqual(test_user1["salt"], test_user2["salt"])
+
+    def test_hash_is_random(self):
+        test_user1 = self.add_user("test_user1", "password")
+        test_user2 = self.add_user("test_user2", "password")
+        self.assertNotEqual(test_user1["passphrase"], test_user2["passphrase"])
+
+    # set fake_salt if you want to store an invalid salt
+    def add_user(self, test_username, passphrase='', fake_salt=None):
+        test_user = self.create_user(test_username, passphrase, fake_salt)
+        cfg.users.set(test_username,test_user)
+        return test_user
+
+    def create_user(self, username, passphrase='', fake_salt=None):
+        test_user = User()
+        test_user["username"] = username
+        pass_hash = bcrypt.encrypt(passphrase)
+        test_user["passphrase"] = pass_hash
+        if fake_salt:
+            test_user["salt"] = fake_salt
+        else:
+            # for bcrypt, the salt is output as part of the hash
+            test_user["salt"] = pass_hash[7:29]
+
+        return test_user
+
+if __name__ == "__main__":
+    unittest.main()