diff --git a/src/v2/components/password/index.ts b/src/v2/components/password/index.ts
new file mode 100644
index 0000000..4ddaab3
--- /dev/null
+++ b/src/v2/components/password/index.ts
@@ -0,0 +1,68 @@
+import * as aws from '@pulumi/aws';
+import * as pulumi from '@pulumi/pulumi';
+import * as random from '@pulumi/random';
+import { commonTags } from '../../../constants';
+
+export namespace Password {
+  export type Args = {
+    value?: pulumi.Input<string>;
+  };
+}
+
+export class Password extends pulumi.ComponentResource {
+  name: string;
+  value: pulumi.Output<string>;
+  secret: aws.secretsmanager.Secret;
+
+  constructor(
+    name: string,
+    args: Password.Args = {},
+    opts: pulumi.ComponentResourceOptions = {},
+  ) {
+    super('studion:Password', name, {}, opts);
+
+    this.name = name;
+    if (args.value) {
+      this.value = pulumi.secret(args.value);
+    } else {
+      const password = new random.RandomPassword(
+        `${this.name}-random-password`,
+        {
+          length: 16,
+          overrideSpecial: '_$',
+          special: true,
+        },
+        { parent: this },
+      );
+      this.value = password.result;
+    }
+
+    this.secret = this.createPasswordSecret(this.value);
+    this.registerOutputs();
+  }
+
+  private createPasswordSecret(password: pulumi.Input<string>) {
+    const project = pulumi.getProject();
+    const stack = pulumi.getStack();
+
+    const passwordSecret = new aws.secretsmanager.Secret(
+      `${this.name}-password-secret`,
+      {
+        namePrefix: `${stack}/${project}/${this.name}-`,
+        tags: commonTags,
+      },
+      { parent: this },
+    );
+
+    const passwordSecretValue = new aws.secretsmanager.SecretVersion(
+      `${this.name}-password-secret-value`,
+      {
+        secretId: passwordSecret.id,
+        secretString: password,
+      },
+      { parent: this, dependsOn: [passwordSecret] },
+    );
+
+    return passwordSecret;
+  }
+}
diff --git a/src/v2/index.ts b/src/v2/index.ts
index aaaabc7..807116b 100644
--- a/src/v2/index.ts
+++ b/src/v2/index.ts
@@ -5,6 +5,7 @@ export { WebServerLoadBalancer } from './components/web-server/load-balancer';
 export { ElastiCacheRedis } from './components/redis/elasticache-redis';
 export { UpstashRedis } from './components/redis/upstash-redis';
 export { Vpc } from './components/vpc';
+export { Password } from './components/password';
 
 import { OtelCollectorBuilder } from './otel/builder';
 import { OtelCollector } from './otel';
diff --git a/tests/password/index.test.ts b/tests/password/index.test.ts
new file mode 100644
index 0000000..8ace4b6
--- /dev/null
+++ b/tests/password/index.test.ts
@@ -0,0 +1,121 @@
+import * as assert from 'node:assert';
+import { InlineProgramArgs } from '@pulumi/pulumi/automation';
+import { SecretsManagerClient } from '@aws-sdk/client-secrets-manager';
+import {
+  DescribeSecretCommand,
+  GetSecretValueCommand,
+} from '@aws-sdk/client-secrets-manager';
+import { PasswordTestContext } from './test-context';
+import { after, before, describe, it } from 'node:test';
+import * as automation from '../automation';
+
+const programArgs: InlineProgramArgs = {
+  stackName: 'dev',
+  projectName: 'icb-test-password',
+  program: () => import('./infrastructure'),
+};
+
+describe('Password component deployment', () => {
+  const region = process.env.AWS_REGION;
+  if (!region) {
+    throw new Error('AWS_REGION environment variable is required');
+  }
+
+  const ctx: PasswordTestContext = {
+    outputs: {},
+    config: {
+      autoGeneratedPasswordName: 'password-test-auto',
+    },
+    clients: {
+      secretsManager: new SecretsManagerClient({ region }),
+    },
+  };
+
+  before(async () => {
+    ctx.outputs = await automation.deploy(programArgs);
+  });
+
+  after(() => automation.destroy(programArgs));
+
+  it('should create a password component with the correct configuration', async () => {
+    const password = ctx.outputs.autoGeneratedPassword.value;
+
+    assert.ok(
+      password.secret,
+      'Password component should have secret property',
+    );
+    assert.ok(password.value, 'Password component should have value property');
+    assert.strictEqual(
+      password.name,
+      ctx.config.autoGeneratedPasswordName,
+      'Password name should match input',
+    );
+  });
+
+  it('should create a secret with auto generated password', async () => {
+    const password = ctx.outputs.autoGeneratedPassword.value;
+
+    const secretResult = await ctx.clients.secretsManager.send(
+      new DescribeSecretCommand({
+        SecretId: password.secret.arn,
+      }),
+    );
+
+    assert.ok(secretResult.ARN, 'Secret should exist');
+    assert.ok(secretResult.Name, 'Secret should have a name');
+    assert.ok(secretResult.CreatedDate, 'Secret should have creation date');
+
+    const expectedPrefix = `${programArgs.stackName}/${programArgs.projectName}/${ctx.config.autoGeneratedPasswordName}-`;
+    assert.ok(
+      secretResult.Name?.startsWith(expectedPrefix),
+      `Secret name should start with ${expectedPrefix}`,
+    );
+  });
+
+  it('should generate a random password with correct format', async () => {
+    const password = ctx.outputs.autoGeneratedPassword.value;
+
+    const secretValue = await ctx.clients.secretsManager.send(
+      new GetSecretValueCommand({
+        SecretId: password.secret.arn,
+      }),
+    );
+
+    const passwordValue = secretValue.SecretString;
+    assert.ok(passwordValue, 'Password value should exist');
+    assert.strictEqual(
+      passwordValue.length,
+      16,
+      'Password should be 16 characters long',
+    );
+    assert.ok(secretValue.VersionId, 'Secret should have a version ID');
+  });
+
+  it('should create a secret with custom password value', async () => {
+    const password = ctx.outputs.customPassword.value;
+
+    const secretValue = await ctx.clients.secretsManager.send(
+      new GetSecretValueCommand({
+        SecretId: password.secret.arn,
+      }),
+    );
+
+    const passwordValue = secretValue.SecretString;
+    assert.strictEqual(
+      passwordValue,
+      'customPass!',
+      'Password should match custom value',
+    );
+  });
+
+  it('should have password value as a secret', async () => {
+    const autoGeneratePasswordValue = ctx.outputs.autoGeneratePasswordValue;
+    assert.ok(
+      autoGeneratePasswordValue.secret,
+      'Auto-generated password should be a secret',
+    );
+
+    const customPasswordValue = ctx.outputs.customPasswordValue;
+    assert.ok(customPasswordValue.secret, 'Custom password should be a secret');
+  });
+});
diff --git a/tests/password/infrastructure/index.ts b/tests/password/infrastructure/index.ts
new file mode 100644
index 0000000..ebe7bce
--- /dev/null
+++ b/tests/password/infrastructure/index.ts
@@ -0,0 +1,18 @@
+import { next as studion } from '@studion/infra-code-blocks';
+
+const appName = 'password-test';
+
+const autoGeneratedPassword = new studion.Password(`${appName}-auto`);
+const autoGeneratePasswordValue = autoGeneratedPassword.value;
+
+const customPassword = new studion.Password(`${appName}-custom`, {
+  value: 'customPass!',
+});
+const customPasswordValue = customPassword.value;
+
+export {
+  autoGeneratedPassword,
+  customPassword,
+  autoGeneratePasswordValue,
+  customPasswordValue,
+};
diff --git a/tests/password/test-context.ts b/tests/password/test-context.ts
new file mode 100644
index 0000000..7607393
--- /dev/null
+++ b/tests/password/test-context.ts
@@ -0,0 +1,25 @@
+import { OutputMap } from '@pulumi/pulumi/automation';
+import { SecretsManagerClient } from '@aws-sdk/client-secrets-manager';
+
+interface PasswordTestConfig {
+  autoGeneratedPasswordName: string;
+}
+
+interface ConfigContext {
+  config: PasswordTestConfig;
+}
+
+interface PulumiProgramContext {
+  outputs: OutputMap;
+}
+
+interface AwsContext {
+  clients: {
+    secretsManager: SecretsManagerClient;
+  };
+}
+
+export interface PasswordTestContext
+  extends ConfigContext,
+    PulumiProgramContext,
+    AwsContext {}