diff --git a/doc/changelog.txt b/doc/changelog.txt
index 3ae571dca..2c577b421 100644
--- a/doc/changelog.txt
+++ b/doc/changelog.txt
@@ -3,6 +3,9 @@ Minetest-c55 changelog
 This should contain all the major changes.
 For minor stuff, refer to the commit log of the repository.
 
+2011-07-31_3:
+- Fixes a bug that made the server to deny non-empty passwords from players connecting the first time
+
 2011-07-31_2:
 - Fixes a bug that caused the server to always read an empty password from the client when a client connected.
 
diff --git a/src/server.cpp b/src/server.cpp
index 35c186b5d..8a19306a9 100644
--- a/src/server.cpp
+++ b/src/server.cpp
@@ -2047,7 +2047,7 @@ void Server::ProcessData(u8 *data, u32 datasize, u16 peer_id)
 		/*dstream<<"Server: Client gave password '"<<password
 				<<"', the correct one is '"<<checkpwd<<"'"<<std::endl;*/
 		
-		if(password != checkpwd)
+		if(password != checkpwd && m_authmanager.exists(playername))
 		{
 			derr_server<<DTIME<<"Server: peer_id="<<peer_id
 					<<": supplied invalid password for "