diff --git a/mopidy/frontends/mpd/exceptions.py b/mopidy/frontends/mpd/exceptions.py
index 2a18b2f3..53a31dd9 100644
--- a/mopidy/frontends/mpd/exceptions.py
+++ b/mopidy/frontends/mpd/exceptions.py
@@ -39,6 +39,11 @@ class MpdArgError(MpdAckError):
         super(MpdArgError, self).__init__(*args, **kwargs)
         self.error_code = 2 # ACK_ERROR_ARG
 
+class MpdPasswordError(MpdAckError):
+    def __init__(self, *args, **kwargs):
+        super(MpdPasswordError, self).__init__(*args, **kwargs)
+        self.error_code = 3 # ACK_ERROR_PASSWORD
+
 class MpdUnknownCommand(MpdAckError):
     def __init__(self, *args, **kwargs):
         super(MpdUnknownCommand, self).__init__(*args, **kwargs)
diff --git a/mopidy/frontends/mpd/protocol/connection.py b/mopidy/frontends/mpd/protocol/connection.py
index 0ce3ef51..65811d09 100644
--- a/mopidy/frontends/mpd/protocol/connection.py
+++ b/mopidy/frontends/mpd/protocol/connection.py
@@ -1,5 +1,6 @@
+from mopidy import settings
 from mopidy.frontends.mpd.protocol import handle_pattern
-from mopidy.frontends.mpd.exceptions import MpdNotImplemented
+from mopidy.frontends.mpd.exceptions import MpdPasswordError
 
 @handle_pattern(r'^close$')
 def close(frontend):
@@ -33,7 +34,11 @@ def password_(frontend, password):
         This is used for authentication with the server. ``PASSWORD`` is
         simply the plaintext password.
     """
-    raise MpdNotImplemented # TODO
+    # You will not get to this code without being authenticated. This is for
+    # when you are already authenticated, and are sending additional 'password'
+    # requests.
+    if settings.MPD_SERVER_PASSWORD != password:
+        raise MpdPasswordError(u'incorrect password', command=u'password')
 
 @handle_pattern(r'^ping$')
 def ping(frontend):
diff --git a/tests/frontends/mpd/connection_test.py b/tests/frontends/mpd/connection_test.py
index 21753054..e7bb74de 100644
--- a/tests/frontends/mpd/connection_test.py
+++ b/tests/frontends/mpd/connection_test.py
@@ -1,5 +1,6 @@
 import unittest
 
+from mopidy import settings
 from mopidy.backends.dummy import DummyBackend
 from mopidy.frontends.mpd import dispatcher
 from mopidy.mixers.dummy import DummyMixer
@@ -9,6 +10,9 @@ class ConnectionHandlerTest(unittest.TestCase):
         self.b = DummyBackend(mixer_class=DummyMixer)
         self.h = dispatcher.MpdDispatcher(backend=self.b)
 
+    def tearDown(self):
+        settings.runtime.clear()
+
     def test_close(self):
         result = self.h.handle_request(u'close')
         self.assert_(u'OK' in result)
@@ -21,9 +25,20 @@ class ConnectionHandlerTest(unittest.TestCase):
         result = self.h.handle_request(u'kill')
         self.assert_(u'OK' in result)
 
-    def test_password(self):
+    def test_valid_password_is_accepted(self):
+        settings.MPD_SERVER_PASSWORD = u'topsecret'
+        result = self.h.handle_request(u'password "topsecret"')
+        self.assert_(u'OK' in result)
+
+    def test_invalid_password_is_not_accepted(self):
+        settings.MPD_SERVER_PASSWORD = u'topsecret'
         result = self.h.handle_request(u'password "secret"')
-        self.assert_(u'ACK [0@0] {} Not implemented' in result)
+        self.assert_(u'ACK [3@0] {password} incorrect password' in result)
+
+    def test_any_password_is_not_accepted_when_password_check_turned_off(self):
+        settings.MPD_SERVER_PASSWORD = False
+        result = self.h.handle_request(u'password "secret"')
+        self.assert_(u'ACK [3@0] {password} incorrect password' in result)
 
     def test_ping(self):
         result = self.h.handle_request(u'ping')