diff --git a/backend/main.py b/backend/main.py
index 2d057e7..aaa547e 100644
--- a/backend/main.py
+++ b/backend/main.py
@@ -67,10 +67,34 @@ if 'AUTHENTICATION_ENABLED' in os.environ:
 else:
     print(f"🔐 Authentication {'ENABLED' if config.get('authentication', {}).get('enabled', False) else 'DISABLED'} (from config.yaml)")
 
-# Allow password hash to be set via environment variable (useful for demos)
-if 'AUTHENTICATION_PASSWORD_HASH' in os.environ:
+# Password configuration priority:
+# 1. AUTHENTICATION_PASSWORD env var (plain text, hashed at startup)
+# 2. AUTHENTICATION_PASSWORD_HASH env var (pre-hashed)
+# 3. authentication.password in config.yaml (plain text, hashed at startup)
+# 4. authentication.password_hash in config.yaml (pre-hashed)
+# Default password is "admin" if nothing is configured
+if 'AUTHENTICATION_PASSWORD' in os.environ:
+    # Plain text password from env var - hash it
+    plain_password = os.getenv('AUTHENTICATION_PASSWORD')
+    config['authentication']['password_hash'] = bcrypt.hashpw(
+        plain_password.encode('utf-8'), 
+        bcrypt.gensalt()
+    ).decode('utf-8')
+    print("🔑 Password loaded from AUTHENTICATION_PASSWORD env var (hashed at startup)")
+elif 'AUTHENTICATION_PASSWORD_HASH' in os.environ:
+    # Pre-hashed password from env var
     config['authentication']['password_hash'] = os.getenv('AUTHENTICATION_PASSWORD_HASH')
     print("🔑 Password hash loaded from AUTHENTICATION_PASSWORD_HASH env var")
+elif config.get('authentication', {}).get('password'):
+    # Plain text password from config.yaml - hash it
+    plain_password = config['authentication']['password']
+    config['authentication']['password_hash'] = bcrypt.hashpw(
+        plain_password.encode('utf-8'), 
+        bcrypt.gensalt()
+    ).decode('utf-8')
+    # Clear the plain text password from config for security
+    del config['authentication']['password']
+    print("🔑 Password loaded from config.yaml (hashed at startup)")
 
 # Allow secret key to be set via environment variable (for session security)
 if 'AUTHENTICATION_SECRET_KEY' in os.environ:
diff --git a/config.yaml b/config.yaml
index 9dbd2f5..5a3653a 100644
--- a/config.yaml
+++ b/config.yaml
@@ -35,9 +35,16 @@ authentication:
   # Generate with: python -c "import secrets; print(secrets.token_hex(32))"
   secret_key: "change_this_to_a_random_secret_key_in_production"
   
-  # Password hash - Generate with: python generate_password.py
+  # Password configuration - choose ONE of the following options:
+  #
+  # Option 1: Plain text password (recommended for ease of use)
+  # The password is hashed automatically at startup
   # ⚠️ Default password is "admin" - CHANGE THIS for production!
-  password_hash: "$2b$12$t/6PGExFzdpU2PUta0iVY.eDQwvu63kH.c/d4bEnnHaQ5CspH1yrG"  # Default: "admin"
+  password: "admin"
+  
+  # Option 2: Pre-hashed password (for advanced users)
+  # Generate with: python generate_password.py
+  # password_hash: "$2b$12$..."
   
   # Session expiry in seconds (default: 7 days)
   session_max_age: 604800
diff --git a/documentation/AUTHENTICATION.md b/documentation/AUTHENTICATION.md
index 0f7adb1..ed53822 100644
--- a/documentation/AUTHENTICATION.md
+++ b/documentation/AUTHENTICATION.md
@@ -49,9 +49,54 @@ For **local testing only**, you can use the default configuration:
 
 For any deployment exposed to a network, follow these steps:
 
-### Step 1: Generate a Password Hash
+---
 
-Choose your environment:
+## Password Configuration Options
+
+NoteDiscovery supports two ways to set passwords:
+
+| Method | Best For | Security |
+|--------|----------|----------|
+| **Plain text password** | Docker, PikaPods, easy deployment | Password is hashed at startup |
+| **Pre-hashed password** | Advanced users, extra security | You control the hashing |
+
+Both methods are secure - the plain text option simply hashes the password when the app starts.
+
+---
+
+### Option A: Plain Text Password (Recommended for Docker/PikaPods)
+
+The easiest approach - just set your password directly:
+
+**Via Environment Variable:**
+```bash
+# Docker run
+docker run -e AUTHENTICATION_ENABLED=true \
+           -e AUTHENTICATION_PASSWORD=your_secure_password \
+           ...
+
+# Docker Compose (.env file)
+AUTHENTICATION_ENABLED=true
+AUTHENTICATION_PASSWORD=your_secure_password
+```
+
+**Via config.yaml:**
+```yaml
+authentication:
+  enabled: true
+  password: "your_secure_password"
+  secret_key: "your_generated_secret_key_here"
+```
+
+The password is automatically hashed with bcrypt when the app starts.
+
+---
+
+### Option B: Pre-Hashed Password (Advanced)
+
+For users who prefer to hash passwords themselves:
+
+#### Step 1: Generate a Password Hash
 
 **Docker Users:**
 
@@ -81,7 +126,7 @@ The script will:
 
 **Copy the hash** - you'll need it for Step 3.
 
-### Step 2: Generate a Secret Key
+#### Step 2: Generate a Secret Key
 
 Generate a random secret key for session encryption:
 
@@ -100,7 +145,7 @@ python -c "import secrets; print(secrets.token_hex(32))"
 
 **Copy the key** - you'll need it for Step 3.
 
-### Step 3: Update `config.yaml`
+#### Step 3: Update `config.yaml`
 
 Edit your `config.yaml` and update the authentication section:
 
@@ -119,7 +164,9 @@ authentication:
   session_max_age: 604800
 ```
 
-### Step 4: Restart the Application
+---
+
+### Restart the Application
 
 ```bash
 # If running locally
@@ -132,11 +179,11 @@ docker-compose restart
 docker restart notediscovery
 ```
 
-### Step 5: Test Login
+### Test Login
 
 Navigate to `http://localhost:8000` and you'll be redirected to the login page.
 
-Enter the password you chose in Step 2.
+Enter the password you configured.
 
 ---
 
diff --git a/documentation/ENVIRONMENT_VARIABLES.md b/documentation/ENVIRONMENT_VARIABLES.md
index 4b32ef2..5a0c268 100644
--- a/documentation/ENVIRONMENT_VARIABLES.md
+++ b/documentation/ENVIRONMENT_VARIABLES.md
@@ -17,9 +17,22 @@ NoteDiscovery supports environment variables to override configuration settings,
 | Variable | Type | Default | Description |
 |----------|------|---------|-------------|
 | `AUTHENTICATION_ENABLED` | boolean | `config.yaml` | Enable/disable authentication |
-| `AUTHENTICATION_PASSWORD_HASH` | string | `config.yaml` | Bcrypt password hash |
+| `AUTHENTICATION_PASSWORD` | string | `admin` | Plain text password (hashed automatically at startup) |
+| `AUTHENTICATION_PASSWORD_HASH` | string | - | Pre-hashed bcrypt password (for advanced users) |
 | `AUTHENTICATION_SECRET_KEY` | string | `config.yaml` | Session secret key (for session security) |
 
+> **Password Priority:** `AUTHENTICATION_PASSWORD` takes precedence over `AUTHENTICATION_PASSWORD_HASH`. If both are set, the plain text password is used.
+
+#### Example: Setting password via environment variable
+
+```bash
+# Docker
+docker run -e AUTHENTICATION_ENABLED=true -e AUTHENTICATION_PASSWORD=mysecretpassword ...
+
+# Docker Compose (in .env file or docker-compose.yml)
+AUTHENTICATION_PASSWORD=mysecretpassword
+```
+
 ### Demo Mode
 
 | Variable | Type | Default | Description |