diff --git a/phpgwapi/inc/class.auth.inc.php b/phpgwapi/inc/class.auth.inc.php
index 859ac15595..8e7ce423f7 100644
--- a/phpgwapi/inc/class.auth.inc.php
+++ b/phpgwapi/inc/class.auth.inc.php
@@ -100,12 +100,21 @@
 					 */
 					$e_password = '{md5}' . base64_encode(pack("H*",md5($password)));
 					break;
+				case 'smd5':
+					if(!function_exists('mhash'))
+					{
+						return False;
+					}
+					$salt = $this->randomstring(8);
+					$hash = mhash(MHASH_MD5, $password . $salt);
+					$e_password = '{SMD5}' . base64_encode($hash . $salt);
+					break;
 				case 'sha':
 					if(!function_exists('mhash'))
 					{
 						return False;
 					}
-					$e_password = '{SHA}' . base64_encode(mhash(MHASH_SHA1, $userpass));
+					$e_password = '{SHA}' . base64_encode(mhash(MHASH_SHA1, $password));
 					break;
 				case 'ssha':
 					if(!function_exists('mhash'))
@@ -163,6 +172,14 @@
 					}
 					$this->error = 'no ext crypt';
 					break;
+				case 'smd5':
+					if(!function_exists('mhash'))
+					{
+						return False;
+					}
+					$salt = $this->randomstring(8);
+					$hash = mhash(MHASH_MD5, $password . $salt);
+					return '{SMD5}' . base64_encode($hash . $salt);
 				case 'sha':
 					if(!function_exists('mhash'))
 					{
@@ -188,6 +205,27 @@
 			return False;
 		}
 
+		/**
+		@function smd5_compare
+		@abstract compare SHA-encrypted passwords for authentication
+		@param $form_val user input value for comparison
+		@param $db_val   stored value (from database)
+		@return boolean	 True on successful comparison
+		*/
+		function smd5_compare($form_val,$db_val)
+		{
+			/* Start with the first char after {SMD5} */
+			$hash = base64_decode(substr($db_val,6));
+			$new_hash = mhash(MHASH_MD5,$form_val);
+			//echo '<br>  DB: ' . base64_encode($orig_hash) . '<br>FORM: ' . base64_encode($new_hash);
+
+			if(strcmp($hash,$new_hash) == 0)
+			{
+				return True;
+			}
+			return False;
+		}
+
 		/**
 		@function sha_compare
 		@abstract compare SHA-encrypted passwords for authentication
diff --git a/phpgwapi/inc/class.auth_sql.inc.php b/phpgwapi/inc/class.auth_sql.inc.php
index 8f75a9d51e..6644555d25 100644
--- a/phpgwapi/inc/class.auth_sql.inc.php
+++ b/phpgwapi/inc/class.auth_sql.inc.php
@@ -44,6 +44,24 @@
 					: 'md5';
 				switch($type)
 				{
+					case 'smd5':
+						$this->db->query("SELECT account_lid,account_pwd FROM phpgw_accounts WHERE account_lid = '$username' AND "
+							. " account_type='u' AND "
+							. " account_status ='A'",__LINE__,__FILE__);
+						$this->db->next_record();
+
+						if($GLOBALS['phpgw_info']['server']['case_sensitive_username'] == true)
+						{
+							if($this->db->f('account_lid') != $username)
+							{
+								return false;
+							}
+						}
+						if($this->db->f('account_pwd'))
+						{
+							return $this->smd5_compare($passwd,$this->db->f('account_pwd'));
+						}
+						break;
 					case 'sha':
 						$this->db->query("SELECT account_lid,account_pwd FROM phpgw_accounts WHERE account_lid = '$username' AND "
 							. " account_type='u' AND "
@@ -175,6 +193,27 @@
 				: 'md5';
 			switch($type)
 			{
+				case 'smd5':
+					$this->db->query("SELECT account_pwd FROM phpgw_accounts WHERE account_id = '" . (int)$account_id
+						. "' AND " // . " account_type='u' AND "
+						. " account_status ='A'",__LINE__,__FILE__);
+					$this->db->next_record();
+					if($this->db->f('account_pwd'))
+					{
+						if(!$admin)
+						{
+							/* Check the old_passwd to make sure this is legal */
+							if(!$this->smd5_compare($old_passwd,$this->db->f('account_pwd')))
+							{
+								return False;
+							}
+						}
+						/* old password ok, or admin called the function from
+						 * the admin application (no old passwd available).
+						 */
+						return $this->_update_passwd($encrypted_passwd,$new_passwd,$account_id,$admin,__FILE__);
+					}
+					return False;
 				case 'sha':
 					$this->db->query("SELECT account_pwd FROM phpgw_accounts WHERE account_id = '" . (int)$account_id
 						. "' AND " // . " account_type='u' AND "
diff --git a/setup/inc/hook_config.inc.php b/setup/inc/hook_config.inc.php
index dc0a4d2175..518223af37 100644
--- a/setup/inc/hook_config.inc.php
+++ b/setup/inc/hook_config.inc.php
@@ -113,6 +113,7 @@
 		if(@function_exists('mhash'))
 		{
 			$hashes += array(
+				'smd5' => 'smd5',
 				'sha'  => 'sha',
 				'ssha' => 'ssha'
 			);
@@ -162,6 +163,7 @@
 		if(@function_exists('mhash'))
 		{
 			$hashes += array(
+				'smd5' => 'smd5',
 				'sha'  => 'sha',
 				'ssha' => 'ssha'
 			);