diff --git a/packages/plugins/users-permissions/server/services/user.js b/packages/plugins/users-permissions/server/services/user.js
index e4ccaa22b1..ae3e10d8dc 100644
--- a/packages/plugins/users-permissions/server/services/user.js
+++ b/packages/plugins/users-permissions/server/services/user.js
@@ -11,6 +11,7 @@ const bcrypt = require('bcryptjs');
 const urlJoin = require('url-join');
 
 const { sanitize } = require('@strapi/utils');
+const { toNumber, getOr } = require('lodash/fp');
 const { getService } = require('../utils');
 
 const USER_MODEL_UID = 'plugin::users-permissions.user';
@@ -27,10 +28,26 @@ module.exports = ({ strapi }) => ({
   },
 
   /**
-   * Promise to search count users
+   * Hashes password fields in the provided values object if they are present.
+   * It checks each key in the values object against the model's attributes and
+   * hashes it if the attribute type is 'password',
    *
-   * @return {Promise}
+   * @param {object} values - The object containing the fields to be hashed.
+   * @return {object} The values object with hashed password fields if they were present.
    */
+  async ensureHashedPasswords(values) {
+    const attributes = strapi.getModel(USER_MODEL_UID).attributes;
+
+    for (const key in values) {
+      if (attributes[key] && attributes[key].type === 'password') {
+        // Check if a custom encryption.rounds has been set on the password attribute
+        const rounds = toNumber(getOr(10, 'encryption.rounds', attributes[key]));
+        values[key] = await bcrypt.hash(values[key], rounds);
+      }
+    }
+
+    return values;
+  },
 
   /**
    * Promise to add a/an user.
@@ -38,7 +55,7 @@ module.exports = ({ strapi }) => ({
    */
   async add(values) {
     return strapi.db.query(USER_MODEL_UID).create({
-      data: values,
+      data: await this.ensureHashedPasswords(values),
       populate: ['role'],
     });
   },
@@ -52,7 +69,7 @@ module.exports = ({ strapi }) => ({
   async edit(userId, params = {}) {
     return strapi.db.query(USER_MODEL_UID).update({
       where: { id: userId },
-      data: params,
+      data: await this.ensureHashedPasswords(params),
       populate: ['role'],
     });
   },
diff --git a/tests/api/plugins/users-permissions/content-api/auth.test.api.js b/tests/api/plugins/users-permissions/content-api/auth.test.api.js
index ec575ca5ec..275b3723f6 100644
--- a/tests/api/plugins/users-permissions/content-api/auth.test.api.js
+++ b/tests/api/plugins/users-permissions/content-api/auth.test.api.js
@@ -1,5 +1,7 @@
 'use strict';
 
+const bcrypt = require('bcryptjs');
+
 const { createStrapiInstance } = require('api-tests/strapi');
 const { createRequest } = require('api-tests/request');
 const { createAuthenticatedUser } = require('../utils');
@@ -20,7 +22,7 @@ const internals = {
 
 const data = {};
 
-describe.skip('Auth API', () => {
+describe('Auth API', () => {
   beforeAll(async () => {
     strapi = await createStrapiInstance({ bypassAuth: false });
 
@@ -111,6 +113,15 @@ describe.skip('Auth API', () => {
         },
       });
 
+      // check that password was hashed
+      const user = await strapi.db.query('plugin::users-permissions.user').findOne({
+        where: {
+          email: internals.user.email.toLowerCase(),
+        },
+      });
+      expect(bcrypt.compareSync(internals.newPassword, user.password)).toBe(true);
+
+      // check results
       expect(res.statusCode).toBe(200);
       expect(res.body).toMatchObject({
         jwt: expect.any(String),
diff --git a/tests/api/plugins/users-permissions/content-api/users-api.test.api.js b/tests/api/plugins/users-permissions/content-api/users-api.test.api.js
index 8991275c1b..dfed97d679 100644
--- a/tests/api/plugins/users-permissions/content-api/users-api.test.api.js
+++ b/tests/api/plugins/users-permissions/content-api/users-api.test.api.js
@@ -2,6 +2,7 @@
 
 // Test a simple default API with no relations
 
+const bcrypt = require('bcryptjs');
 const { createStrapiInstance } = require('api-tests/strapi');
 const { createContentAPIRequest } = require('api-tests/request');
 
@@ -73,6 +74,15 @@ describe('Users API', () => {
       body: user,
     });
 
+    // check that password was hashed
+    const userDb = await strapi.db.query('plugin::users-permissions.user').findOne({
+      where: {
+        email: user.email,
+      },
+    });
+
+    expect(bcrypt.compareSync(user.password, userDb.password)).toBe(true);
+
     expect(res.statusCode).toBe(201);
     expect(res.body).toMatchObject({
       username: user.username,