diff --git a/homeassistant/components/nam/__init__.py b/homeassistant/components/nam/__init__.py
index 5052ffbaf1f..98152956fb5 100644
--- a/homeassistant/components/nam/__init__.py
+++ b/homeassistant/components/nam/__init__.py
@@ -1,14 +1,16 @@
 """The Nettigo Air Monitor component."""
 from __future__ import annotations
 
+import asyncio
 import logging
 from typing import cast
 
-from aiohttp import ClientSession
-from aiohttp.client_exceptions import ClientConnectorError
+from aiohttp.client_exceptions import ClientConnectorError, ClientError
 import async_timeout
 from nettigo_air_monitor import (
     ApiError,
+    AuthFailed,
+    ConnectionOptions,
     InvalidSensorData,
     NAMSensors,
     NettigoAirMonitor,
@@ -16,13 +18,18 @@ from nettigo_air_monitor import (
 
 from homeassistant.components.air_quality import DOMAIN as AIR_QUALITY_PLATFORM
 from homeassistant.config_entries import ConfigEntry
-from homeassistant.const import CONF_HOST
+from homeassistant.const import CONF_HOST, CONF_PASSWORD, CONF_USERNAME
 from homeassistant.core import HomeAssistant
 from homeassistant.helpers import entity_registry
 from homeassistant.helpers.aiohttp_client import async_get_clientsession
 from homeassistant.helpers.device_registry import CONNECTION_NETWORK_MAC
 from homeassistant.helpers.entity import DeviceInfo
-from homeassistant.helpers.update_coordinator import DataUpdateCoordinator, UpdateFailed
+from homeassistant.helpers.update_coordinator import (
+    ConfigEntryAuthFailed,
+    ConfigEntryNotReady,
+    DataUpdateCoordinator,
+    UpdateFailed,
+)
 
 from .const import (
     ATTR_SDS011,
@@ -41,10 +48,20 @@ PLATFORMS = ["sensor"]
 async def async_setup_entry(hass: HomeAssistant, entry: ConfigEntry) -> bool:
     """Set up Nettigo as config entry."""
     host: str = entry.data[CONF_HOST]
+    username: str | None = entry.data.get(CONF_USERNAME)
+    password: str | None = entry.data.get(CONF_PASSWORD)
 
     websession = async_get_clientsession(hass)
 
-    coordinator = NAMDataUpdateCoordinator(hass, websession, host, entry.unique_id)
+    options = ConnectionOptions(host=host, username=username, password=password)
+    try:
+        nam = await NettigoAirMonitor.create(websession, options)
+    except AuthFailed as err:
+        raise ConfigEntryAuthFailed from err
+    except (ApiError, ClientError, ClientConnectorError, asyncio.TimeoutError) as err:
+        raise ConfigEntryNotReady from err
+
+    coordinator = NAMDataUpdateCoordinator(hass, nam, entry.unique_id)
     await coordinator.async_config_entry_first_refresh()
 
     hass.data.setdefault(DOMAIN, {})
@@ -81,14 +98,12 @@ class NAMDataUpdateCoordinator(DataUpdateCoordinator):
     def __init__(
         self,
         hass: HomeAssistant,
-        session: ClientSession,
-        host: str,
+        nam: NettigoAirMonitor,
         unique_id: str | None,
     ) -> None:
         """Initialize."""
-        self.host = host
-        self.nam = NettigoAirMonitor(session, host)
         self._unique_id = unique_id
+        self.nam = nam
 
         super().__init__(
             hass, _LOGGER, name=DOMAIN, update_interval=DEFAULT_UPDATE_INTERVAL
@@ -102,6 +117,8 @@ class NAMDataUpdateCoordinator(DataUpdateCoordinator):
             # get the data 4 times, so we use a longer than usual timeout here.
             async with async_timeout.timeout(30):
                 data = await self.nam.async_update()
+        # We do not need to catch AuthFailed exception here because sensor data is
+        # always available without authorization.
         except (ApiError, ClientConnectorError, InvalidSensorData) as error:
             raise UpdateFailed(error) from error
 
@@ -120,5 +137,5 @@ class NAMDataUpdateCoordinator(DataUpdateCoordinator):
             name=DEFAULT_NAME,
             sw_version=self.nam.software_version,
             manufacturer=MANUFACTURER,
-            configuration_url=f"http://{self.host}/",
+            configuration_url=f"http://{self.nam.host}/",
         )
diff --git a/homeassistant/components/nam/config_flow.py b/homeassistant/components/nam/config_flow.py
index 86a30f95af6..0e98e4f7ef5 100644
--- a/homeassistant/components/nam/config_flow.py
+++ b/homeassistant/components/nam/config_flow.py
@@ -3,16 +3,23 @@ from __future__ import annotations
 
 import asyncio
 import logging
-from typing import Any, cast
+from typing import Any
 
 from aiohttp.client_exceptions import ClientConnectorError
 import async_timeout
-from nettigo_air_monitor import ApiError, CannotGetMac, NettigoAirMonitor
+from nettigo_air_monitor import (
+    ApiError,
+    AuthFailed,
+    CannotGetMac,
+    ConnectionOptions,
+    NettigoAirMonitor,
+)
 import voluptuous as vol
 
 from homeassistant import config_entries
 from homeassistant.components import zeroconf
-from homeassistant.const import ATTR_NAME, CONF_HOST
+from homeassistant.const import CONF_HOST, CONF_PASSWORD, CONF_USERNAME
+from homeassistant.core import HomeAssistant
 from homeassistant.data_entry_flow import FlowResult
 from homeassistant.helpers.aiohttp_client import async_get_clientsession
 from homeassistant.helpers.device_registry import format_mac
@@ -21,6 +28,23 @@ from .const import DOMAIN
 
 _LOGGER = logging.getLogger(__name__)
 
+AUTH_SCHEMA = vol.Schema(
+    {vol.Required(CONF_USERNAME): str, vol.Required(CONF_PASSWORD): str}
+)
+
+
+async def async_get_mac(hass: HomeAssistant, host: str, data: dict[str, Any]) -> str:
+    """Get device MAC address."""
+    websession = async_get_clientsession(hass)
+
+    options = ConnectionOptions(host, data.get(CONF_USERNAME), data.get(CONF_PASSWORD))
+    nam = await NettigoAirMonitor.create(websession, options)
+    # Device firmware uses synchronous code and doesn't respond to http queries
+    # when reading data from sensors. The nettigo-air-monitor library tries to get
+    # the data 4 times, so we use a longer than usual timeout here.
+    async with async_timeout.timeout(30):
+        return await nam.async_get_mac_address()
+
 
 class NAMFlowHandler(config_entries.ConfigFlow, domain=DOMAIN):
     """Config flow for Nettigo Air Monitor."""
@@ -29,18 +53,22 @@ class NAMFlowHandler(config_entries.ConfigFlow, domain=DOMAIN):
 
     def __init__(self) -> None:
         """Initialize flow."""
-        self.host: str | None = None
+        self.host: str
+        self.entry: config_entries.ConfigEntry
 
     async def async_step_user(
         self, user_input: dict[str, Any] | None = None
     ) -> FlowResult:
         """Handle a flow initialized by the user."""
-        errors = {}
+        errors: dict[str, str] = {}
 
         if user_input is not None:
             self.host = user_input[CONF_HOST]
+
             try:
-                mac = await self._async_get_mac(cast(str, self.host))
+                mac = await async_get_mac(self.hass, self.host, {})
+            except AuthFailed:
+                return await self.async_step_credentials()
             except (ApiError, ClientConnectorError, asyncio.TimeoutError):
                 errors["base"] = "cannot_connect"
             except CannotGetMac:
@@ -49,36 +77,65 @@ class NAMFlowHandler(config_entries.ConfigFlow, domain=DOMAIN):
                 _LOGGER.exception("Unexpected exception")
                 errors["base"] = "unknown"
             else:
-
                 await self.async_set_unique_id(format_mac(mac))
                 self._abort_if_unique_id_configured({CONF_HOST: self.host})
 
                 return self.async_create_entry(
-                    title=cast(str, self.host),
+                    title=self.host,
                     data=user_input,
                 )
 
         return self.async_show_form(
             step_id="user",
-            data_schema=vol.Schema(
-                {
-                    vol.Required(CONF_HOST, default=""): str,
-                }
-            ),
+            data_schema=vol.Schema({vol.Required(CONF_HOST): str}),
             errors=errors,
         )
 
+    async def async_step_credentials(
+        self, user_input: dict[str, Any] | None = None
+    ) -> FlowResult:
+        """Handle the credentials step."""
+        errors: dict[str, str] = {}
+
+        if user_input is not None:
+            try:
+                mac = await async_get_mac(self.hass, self.host, user_input)
+            except AuthFailed:
+                errors["base"] = "invalid_auth"
+            except (ApiError, ClientConnectorError, asyncio.TimeoutError):
+                errors["base"] = "cannot_connect"
+            except CannotGetMac:
+                return self.async_abort(reason="device_unsupported")
+            except Exception:  # pylint: disable=broad-except
+                _LOGGER.exception("Unexpected exception")
+                errors["base"] = "unknown"
+            else:
+                await self.async_set_unique_id(format_mac(mac))
+                self._abort_if_unique_id_configured({CONF_HOST: self.host})
+
+                return self.async_create_entry(
+                    title=self.host,
+                    data={**user_input, CONF_HOST: self.host},
+                )
+
+        return self.async_show_form(
+            step_id="credentials", data_schema=AUTH_SCHEMA, errors=errors
+        )
+
     async def async_step_zeroconf(
         self, discovery_info: zeroconf.ZeroconfServiceInfo
     ) -> FlowResult:
         """Handle zeroconf discovery."""
         self.host = discovery_info[CONF_HOST]
+        self.context["title_placeholders"] = {"host": self.host}
 
         # Do not probe the device if the host is already configured
         self._async_abort_entries_match({CONF_HOST: self.host})
 
         try:
-            mac = await self._async_get_mac(self.host)
+            mac = await async_get_mac(self.hass, self.host, {})
+        except AuthFailed:
+            return await self.async_step_credentials()
         except (ApiError, ClientConnectorError, asyncio.TimeoutError):
             return self.async_abort(reason="cannot_connect")
         except CannotGetMac:
@@ -87,21 +144,17 @@ class NAMFlowHandler(config_entries.ConfigFlow, domain=DOMAIN):
         await self.async_set_unique_id(format_mac(mac))
         self._abort_if_unique_id_configured({CONF_HOST: self.host})
 
-        self.context["title_placeholders"] = {
-            ATTR_NAME: discovery_info[ATTR_NAME].split(".")[0]
-        }
-
         return await self.async_step_confirm_discovery()
 
     async def async_step_confirm_discovery(
         self, user_input: dict[str, Any] | None = None
     ) -> FlowResult:
         """Handle discovery confirm."""
-        errors: dict = {}
+        errors: dict[str, str] = {}
 
         if user_input is not None:
             return self.async_create_entry(
-                title=cast(str, self.host),
+                title=self.host,
                 data={CONF_HOST: self.host},
             )
 
@@ -109,16 +162,39 @@ class NAMFlowHandler(config_entries.ConfigFlow, domain=DOMAIN):
 
         return self.async_show_form(
             step_id="confirm_discovery",
-            description_placeholders={CONF_HOST: self.host},
+            description_placeholders={"host": self.host},
             errors=errors,
         )
 
-    async def _async_get_mac(self, host: str) -> str:
-        """Get device MAC address."""
-        websession = async_get_clientsession(self.hass)
-        nam = NettigoAirMonitor(websession, host)
-        # Device firmware uses synchronous code and doesn't respond to http queries
-        # when reading data from sensors. The nettigo-air-monitor library tries to get
-        # the data 4 times, so we use a longer than usual timeout here.
-        async with async_timeout.timeout(30):
-            return await nam.async_get_mac_address()
+    async def async_step_reauth(self, data: dict[str, Any]) -> FlowResult:
+        """Handle configuration by re-auth."""
+        if entry := self.hass.config_entries.async_get_entry(self.context["entry_id"]):
+            self.entry = entry
+        self.host = data[CONF_HOST]
+        self.context["title_placeholders"] = {"host": self.host}
+        return await self.async_step_reauth_confirm()
+
+    async def async_step_reauth_confirm(
+        self, user_input: dict[str, Any] | None = None
+    ) -> FlowResult:
+        """Dialog that informs the user that reauth is required."""
+        errors: dict[str, str] = {}
+
+        if user_input is not None:
+            try:
+                await async_get_mac(self.hass, self.host, user_input)
+            except (ApiError, AuthFailed, ClientConnectorError, asyncio.TimeoutError):
+                return self.async_abort(reason="reauth_unsuccessful")
+            else:
+                self.hass.config_entries.async_update_entry(
+                    self.entry, data={**user_input, CONF_HOST: self.host}
+                )
+                await self.hass.config_entries.async_reload(self.entry.entry_id)
+                return self.async_abort(reason="reauth_successful")
+
+        return self.async_show_form(
+            step_id="reauth_confirm",
+            description_placeholders={"host": self.host},
+            data_schema=AUTH_SCHEMA,
+            errors=errors,
+        )
diff --git a/homeassistant/components/nam/manifest.json b/homeassistant/components/nam/manifest.json
index 114fc4dd48d..1aab1cf4613 100644
--- a/homeassistant/components/nam/manifest.json
+++ b/homeassistant/components/nam/manifest.json
@@ -3,7 +3,7 @@
   "name": "Nettigo Air Monitor",
   "documentation": "https://www.home-assistant.io/integrations/nam",
   "codeowners": ["@bieniu"],
-  "requirements": ["nettigo-air-monitor==1.1.1"],
+  "requirements": ["nettigo-air-monitor==1.2.1"],
   "zeroconf": [
     {
       "type": "_http._tcp.local.",
diff --git a/homeassistant/components/nam/strings.json b/homeassistant/components/nam/strings.json
index e8994a346bf..dab6eefb095 100644
--- a/homeassistant/components/nam/strings.json
+++ b/homeassistant/components/nam/strings.json
@@ -1,6 +1,6 @@
 {
   "config": {
-    "flow_title": "{name}",
+    "flow_title": "{host}",
     "step": {
       "user": {
         "description": "Set up Nettigo Air Monitor integration.",
@@ -8,17 +8,34 @@
           "host": "[%key:common::config_flow::data::host%]"
         }
       },
+      "credentials": {
+        "description": "Please enter the username and password.",
+        "data": {
+          "username": "[%key:common::config_flow::data::username%]",
+          "password": "[%key:common::config_flow::data::password%]"
+        }
+      },
+      "reauth_confirm": {
+        "description": "Please enter the correct username and password for host: {host}",
+        "data": {
+          "username": "[%key:common::config_flow::data::username%]",
+          "password": "[%key:common::config_flow::data::password%]"
+        }
+      },
       "confirm_discovery": {
         "description": "Do you want to set up Nettigo Air Monitor at {host}?"
       }
     },
     "error": {
       "cannot_connect": "[%key:common::config_flow::error::cannot_connect%]",
-      "unknown": "[%key:common::config_flow::error::unknown%]"
+      "unknown": "[%key:common::config_flow::error::unknown%]",
+      "invalid_auth": "[%key:common::config_flow::error::invalid_auth%]"
     },
     "abort": {
       "already_configured": "[%key:common::config_flow::abort::already_configured_device%]",
-      "device_unsupported": "The device is unsupported."
+      "device_unsupported": "The device is unsupported.",
+      "reauth_successful": "[%key:common::config_flow::abort::reauth_successful%]",
+      "reauth_unsuccessful": "Re-authentication was unsuccessful, please remove the integration and set it up again."
     }
   }
 }
diff --git a/requirements_all.txt b/requirements_all.txt
index 493fe9782bf..bfe22c2a1cd 100644
--- a/requirements_all.txt
+++ b/requirements_all.txt
@@ -1056,7 +1056,7 @@ netdisco==3.0.0
 netmap==0.7.0.2
 
 # homeassistant.components.nam
-nettigo-air-monitor==1.1.1
+nettigo-air-monitor==1.2.1
 
 # homeassistant.components.neurio_energy
 neurio==0.3.1
diff --git a/requirements_test_all.txt b/requirements_test_all.txt
index c08e1aded43..0c7fe4f9dbc 100644
--- a/requirements_test_all.txt
+++ b/requirements_test_all.txt
@@ -642,7 +642,7 @@ netdisco==3.0.0
 netmap==0.7.0.2
 
 # homeassistant.components.nam
-nettigo-air-monitor==1.1.1
+nettigo-air-monitor==1.2.1
 
 # homeassistant.components.nexia
 nexia==0.9.11
diff --git a/tests/components/nam/__init__.py b/tests/components/nam/__init__.py
index 8106f97ef31..eb723405076 100644
--- a/tests/components/nam/__init__.py
+++ b/tests/components/nam/__init__.py
@@ -1,5 +1,5 @@
 """Tests for the Nettigo Air Monitor integration."""
-from unittest.mock import patch
+from unittest.mock import AsyncMock, Mock, patch
 
 from homeassistant.components.nam.const import DOMAIN
 
@@ -52,9 +52,11 @@ async def init_integration(hass, co2_sensor=True) -> MockConfigEntry:
         # Remove conc_co2_ppm value
         nam_data["sensordatavalues"].pop(6)
 
-    with patch(
-        "homeassistant.components.nam.NettigoAirMonitor._async_get_data",
-        return_value=nam_data,
+    update_response = Mock(json=AsyncMock(return_value=nam_data))
+
+    with patch("homeassistant.components.nam.NettigoAirMonitor.initialize"), patch(
+        "homeassistant.components.nam.NettigoAirMonitor._async_http_request",
+        return_value=update_response,
     ):
         entry.add_to_hass(hass)
         await hass.config_entries.async_setup(entry.entry_id)
diff --git a/tests/components/nam/test_config_flow.py b/tests/components/nam/test_config_flow.py
index b0ecb20da11..3dbbe416831 100644
--- a/tests/components/nam/test_config_flow.py
+++ b/tests/components/nam/test_config_flow.py
@@ -2,21 +2,22 @@
 import asyncio
 from unittest.mock import patch
 
-from nettigo_air_monitor import ApiError, CannotGetMac
+from nettigo_air_monitor import ApiError, AuthFailed, CannotGetMac
 import pytest
 
 from homeassistant import data_entry_flow
 from homeassistant.components.nam.const import DOMAIN
-from homeassistant.config_entries import SOURCE_USER, SOURCE_ZEROCONF
+from homeassistant.config_entries import SOURCE_REAUTH, SOURCE_USER, SOURCE_ZEROCONF
 
 from tests.common import MockConfigEntry
 
-DISCOVERY_INFO = {"host": "10.10.2.3", "name": "NAM-12345"}
+DISCOVERY_INFO = {"host": "10.10.2.3"}
 VALID_CONFIG = {"host": "10.10.2.3"}
+VALID_AUTH = {"username": "fake_username", "password": "fake_password"}
 
 
-async def test_form_create_entry(hass):
-    """Test that the user step works."""
+async def test_form_create_entry_without_auth(hass):
+    """Test that the user step without auth works."""
     result = await hass.config_entries.flow.async_init(
         DOMAIN, context={"source": SOURCE_USER}
     )
@@ -24,13 +25,12 @@ async def test_form_create_entry(hass):
     assert result["step_id"] == SOURCE_USER
     assert result["errors"] == {}
 
-    with patch(
+    with patch("homeassistant.components.nam.NettigoAirMonitor.initialize"), patch(
         "homeassistant.components.nam.NettigoAirMonitor.async_get_mac_address",
         return_value="aa:bb:cc:dd:ee:ff",
     ), patch(
         "homeassistant.components.nam.async_setup_entry", return_value=True
     ) as mock_setup_entry:
-
         result = await hass.config_entries.flow.async_configure(
             result["flow_id"],
             VALID_CONFIG,
@@ -43,10 +43,153 @@ async def test_form_create_entry(hass):
     assert len(mock_setup_entry.mock_calls) == 1
 
 
+async def test_form_create_entry_with_auth(hass):
+    """Test that the user step with auth works."""
+    result = await hass.config_entries.flow.async_init(
+        DOMAIN, context={"source": SOURCE_USER}
+    )
+    assert result["type"] == data_entry_flow.RESULT_TYPE_FORM
+    assert result["step_id"] == SOURCE_USER
+    assert result["errors"] == {}
+
+    with patch(
+        "homeassistant.components.nam.NettigoAirMonitor.initialize",
+        side_effect=AuthFailed("Auth Error"),
+    ):
+        result = await hass.config_entries.flow.async_configure(
+            result["flow_id"],
+            VALID_CONFIG,
+        )
+        await hass.async_block_till_done()
+
+    assert result["type"] == data_entry_flow.RESULT_TYPE_FORM
+    assert result["step_id"] == "credentials"
+
+    with patch("homeassistant.components.nam.NettigoAirMonitor.initialize"), patch(
+        "homeassistant.components.nam.NettigoAirMonitor.async_get_mac_address",
+        return_value="aa:bb:cc:dd:ee:ff",
+    ), patch(
+        "homeassistant.components.nam.async_setup_entry", return_value=True
+    ) as mock_setup_entry:
+        result = await hass.config_entries.flow.async_configure(
+            result["flow_id"],
+            VALID_AUTH,
+        )
+        await hass.async_block_till_done()
+
+    assert result["type"] == data_entry_flow.RESULT_TYPE_CREATE_ENTRY
+    assert result["title"] == "10.10.2.3"
+    assert result["data"]["host"] == "10.10.2.3"
+    assert result["data"]["username"] == "fake_username"
+    assert result["data"]["password"] == "fake_password"
+    assert len(mock_setup_entry.mock_calls) == 1
+
+
+async def test_reauth_successful(hass):
+    """Test starting a reauthentication flow."""
+    entry = MockConfigEntry(
+        domain=DOMAIN,
+        title="10.10.2.3",
+        unique_id="aa:bb:cc:dd:ee:ff",
+        data={"host": "10.10.2.3"},
+    )
+    entry.add_to_hass(hass)
+
+    with patch("homeassistant.components.nam.NettigoAirMonitor.initialize"), patch(
+        "homeassistant.components.nam.NettigoAirMonitor.async_get_mac_address",
+        return_value="aa:bb:cc:dd:ee:ff",
+    ):
+        result = await hass.config_entries.flow.async_init(
+            DOMAIN,
+            context={"source": SOURCE_REAUTH, "entry_id": entry.entry_id},
+            data=entry.data,
+        )
+
+        assert result["type"] == data_entry_flow.RESULT_TYPE_FORM
+        assert result["step_id"] == "reauth_confirm"
+
+        result = await hass.config_entries.flow.async_configure(
+            result["flow_id"],
+            user_input=VALID_AUTH,
+        )
+
+        assert result["type"] == data_entry_flow.RESULT_TYPE_ABORT
+        assert result["reason"] == "reauth_successful"
+
+
+async def test_reauth_unsuccessful(hass):
+    """Test starting a reauthentication flow."""
+    entry = MockConfigEntry(
+        domain=DOMAIN,
+        title="10.10.2.3",
+        unique_id="aa:bb:cc:dd:ee:ff",
+        data={"host": "10.10.2.3"},
+    )
+    entry.add_to_hass(hass)
+
+    with patch(
+        "homeassistant.components.nam.NettigoAirMonitor.initialize",
+        side_effect=ApiError("API Error"),
+    ):
+        result = await hass.config_entries.flow.async_init(
+            DOMAIN,
+            context={"source": SOURCE_REAUTH, "entry_id": entry.entry_id},
+            data=entry.data,
+        )
+
+        assert result["type"] == data_entry_flow.RESULT_TYPE_FORM
+        assert result["step_id"] == "reauth_confirm"
+
+        result = await hass.config_entries.flow.async_configure(
+            result["flow_id"],
+            user_input=VALID_AUTH,
+        )
+
+        assert result["type"] == data_entry_flow.RESULT_TYPE_ABORT
+        assert result["reason"] == "reauth_unsuccessful"
+
+
 @pytest.mark.parametrize(
     "error",
     [
-        (ApiError("Invalid response from device 10.10.2.3: 404"), "cannot_connect"),
+        (ApiError("API Error"), "cannot_connect"),
+        (AuthFailed("Auth Error"), "invalid_auth"),
+        (asyncio.TimeoutError, "cannot_connect"),
+        (ValueError, "unknown"),
+    ],
+)
+async def test_form_with_auth_errors(hass, error):
+    """Test we handle errors when auth is required."""
+    exc, base_error = error
+    with patch(
+        "homeassistant.components.nam.NettigoAirMonitor.initialize",
+        side_effect=AuthFailed("Auth Error"),
+    ):
+        result = await hass.config_entries.flow.async_init(
+            DOMAIN,
+            context={"source": SOURCE_USER},
+            data=VALID_CONFIG,
+        )
+
+    assert result["type"] == data_entry_flow.RESULT_TYPE_FORM
+    assert result["step_id"] == "credentials"
+
+    with patch(
+        "homeassistant.components.nam.NettigoAirMonitor.initialize",
+        side_effect=exc,
+    ):
+        result = await hass.config_entries.flow.async_configure(
+            result["flow_id"],
+            VALID_AUTH,
+        )
+
+    assert result["errors"] == {"base": base_error}
+
+
+@pytest.mark.parametrize(
+    "error",
+    [
+        (ApiError("API Error"), "cannot_connect"),
         (asyncio.TimeoutError, "cannot_connect"),
         (ValueError, "unknown"),
     ],
@@ -55,7 +198,7 @@ async def test_form_errors(hass, error):
     """Test we handle errors."""
     exc, base_error = error
     with patch(
-        "homeassistant.components.nam.NettigoAirMonitor.async_get_mac_address",
+        "homeassistant.components.nam.NettigoAirMonitor.initialize",
         side_effect=exc,
     ):
 
@@ -70,11 +213,10 @@ async def test_form_errors(hass, error):
 
 async def test_form_abort(hass):
     """Test we handle abort after error."""
-    with patch(
+    with patch("homeassistant.components.nam.NettigoAirMonitor.initialize"), patch(
         "homeassistant.components.nam.NettigoAirMonitor.async_get_mac_address",
         side_effect=CannotGetMac("Cannot get MAC address from device"),
     ):
-
         result = await hass.config_entries.flow.async_init(
             DOMAIN,
             context={"source": SOURCE_USER},
@@ -85,6 +227,34 @@ async def test_form_abort(hass):
     assert result["reason"] == "device_unsupported"
 
 
+async def test_form_with_auth_abort(hass):
+    """Test we handle abort after error."""
+    with patch(
+        "homeassistant.components.nam.NettigoAirMonitor.initialize",
+        side_effect=AuthFailed("Auth Error"),
+    ):
+        result = await hass.config_entries.flow.async_init(
+            DOMAIN,
+            context={"source": SOURCE_USER},
+            data=VALID_CONFIG,
+        )
+
+    assert result["type"] == data_entry_flow.RESULT_TYPE_FORM
+    assert result["step_id"] == "credentials"
+
+    with patch("homeassistant.components.nam.NettigoAirMonitor.initialize"), patch(
+        "homeassistant.components.nam.NettigoAirMonitor.async_get_mac_address",
+        side_effect=CannotGetMac("Cannot get MAC address from device"),
+    ):
+        result = await hass.config_entries.flow.async_configure(
+            result["flow_id"],
+            VALID_AUTH,
+        )
+
+    assert result["type"] == data_entry_flow.RESULT_TYPE_ABORT
+    assert result["reason"] == "device_unsupported"
+
+
 async def test_form_already_configured(hass):
     """Test that errors are shown when duplicates are added."""
     entry = MockConfigEntry(
@@ -96,7 +266,7 @@ async def test_form_already_configured(hass):
         DOMAIN, context={"source": SOURCE_USER}
     )
 
-    with patch(
+    with patch("homeassistant.components.nam.NettigoAirMonitor.initialize"), patch(
         "homeassistant.components.nam.NettigoAirMonitor.async_get_mac_address",
         return_value="aa:bb:cc:dd:ee:ff",
     ):
@@ -114,7 +284,7 @@ async def test_form_already_configured(hass):
 
 async def test_zeroconf(hass):
     """Test we get the form."""
-    with patch(
+    with patch("homeassistant.components.nam.NettigoAirMonitor.initialize"), patch(
         "homeassistant.components.nam.NettigoAirMonitor.async_get_mac_address",
         return_value="aa:bb:cc:dd:ee:ff",
     ):
@@ -131,7 +301,7 @@ async def test_zeroconf(hass):
 
     assert result["type"] == data_entry_flow.RESULT_TYPE_FORM
     assert result["errors"] == {}
-    assert context["title_placeholders"]["name"] == "NAM-12345"
+    assert context["title_placeholders"]["host"] == "10.10.2.3"
     assert context["confirm_only"] is True
 
     with patch(
@@ -150,6 +320,48 @@ async def test_zeroconf(hass):
     assert len(mock_setup_entry.mock_calls) == 1
 
 
+async def test_zeroconf_with_auth(hass):
+    """Test that the zeroconf step with auth works."""
+    with patch(
+        "homeassistant.components.nam.NettigoAirMonitor.initialize",
+        side_effect=AuthFailed("Auth Error"),
+    ):
+        result = await hass.config_entries.flow.async_init(
+            DOMAIN,
+            data=DISCOVERY_INFO,
+            context={"source": SOURCE_ZEROCONF},
+        )
+        context = next(
+            flow["context"]
+            for flow in hass.config_entries.flow.async_progress()
+            if flow["flow_id"] == result["flow_id"]
+        )
+
+    assert result["type"] == data_entry_flow.RESULT_TYPE_FORM
+    assert result["step_id"] == "credentials"
+    assert result["errors"] == {}
+    assert context["title_placeholders"]["host"] == "10.10.2.3"
+
+    with patch("homeassistant.components.nam.NettigoAirMonitor.initialize"), patch(
+        "homeassistant.components.nam.NettigoAirMonitor.async_get_mac_address",
+        return_value="aa:bb:cc:dd:ee:ff",
+    ), patch(
+        "homeassistant.components.nam.async_setup_entry", return_value=True
+    ) as mock_setup_entry:
+        result = await hass.config_entries.flow.async_configure(
+            result["flow_id"],
+            VALID_AUTH,
+        )
+        await hass.async_block_till_done()
+
+    assert result["type"] == data_entry_flow.RESULT_TYPE_CREATE_ENTRY
+    assert result["title"] == "10.10.2.3"
+    assert result["data"]["host"] == "10.10.2.3"
+    assert result["data"]["username"] == "fake_username"
+    assert result["data"]["password"] == "fake_password"
+    assert len(mock_setup_entry.mock_calls) == 1
+
+
 async def test_zeroconf_host_already_configured(hass):
     """Test that errors are shown when host is already configured."""
     entry = MockConfigEntry(
@@ -170,7 +382,7 @@ async def test_zeroconf_host_already_configured(hass):
 @pytest.mark.parametrize(
     "error",
     [
-        (ApiError("Invalid response from device 10.10.2.3: 404"), "cannot_connect"),
+        (ApiError("API Error"), "cannot_connect"),
         (CannotGetMac("Cannot get MAC address from device"), "device_unsupported"),
     ],
 )
@@ -178,10 +390,9 @@ async def test_zeroconf_errors(hass, error):
     """Test we handle errors."""
     exc, reason = error
     with patch(
-        "homeassistant.components.nam.NettigoAirMonitor.async_get_mac_address",
+        "homeassistant.components.nam.NettigoAirMonitor.initialize",
         side_effect=exc,
     ):
-
         result = await hass.config_entries.flow.async_init(
             DOMAIN,
             data=DISCOVERY_INFO,
diff --git a/tests/components/nam/test_init.py b/tests/components/nam/test_init.py
index 97392cbaff8..3223a394f68 100644
--- a/tests/components/nam/test_init.py
+++ b/tests/components/nam/test_init.py
@@ -1,7 +1,7 @@
 """Test init of Nettigo Air Monitor integration."""
 from unittest.mock import patch
 
-from nettigo_air_monitor import ApiError
+from nettigo_air_monitor import ApiError, AuthFailed
 
 from homeassistant.components.air_quality import DOMAIN as AIR_QUALITY_PLATFORM
 from homeassistant.components.nam.const import DOMAIN
@@ -33,7 +33,7 @@ async def test_config_not_ready(hass):
     )
 
     with patch(
-        "homeassistant.components.nam.NettigoAirMonitor._async_get_data",
+        "homeassistant.components.nam.NettigoAirMonitor.initialize",
         side_effect=ApiError("API Error"),
     ):
         entry.add_to_hass(hass)
@@ -41,6 +41,24 @@ async def test_config_not_ready(hass):
         assert entry.state is ConfigEntryState.SETUP_RETRY
 
 
+async def test_config_auth_failed(hass):
+    """Test for setup failure if the auth fails."""
+    entry = MockConfigEntry(
+        domain=DOMAIN,
+        title="10.10.2.3",
+        unique_id="aa:bb:cc:dd:ee:ff",
+        data={"host": "10.10.2.3"},
+    )
+
+    with patch(
+        "homeassistant.components.nam.NettigoAirMonitor.initialize",
+        side_effect=AuthFailed("Authorization has failed"),
+    ):
+        entry.add_to_hass(hass)
+        await hass.config_entries.async_setup(entry.entry_id)
+        assert entry.state is ConfigEntryState.SETUP_ERROR
+
+
 async def test_unload_entry(hass):
     """Test successful unload of entry."""
     entry = await init_integration(hass)
diff --git a/tests/components/nam/test_sensor.py b/tests/components/nam/test_sensor.py
index 68c0044e590..aa05930f727 100644
--- a/tests/components/nam/test_sensor.py
+++ b/tests/components/nam/test_sensor.py
@@ -1,6 +1,6 @@
 """Test sensor of Nettigo Air Monitor integration."""
 from datetime import timedelta
-from unittest.mock import patch
+from unittest.mock import AsyncMock, Mock, patch
 
 from nettigo_air_monitor import ApiError
 
@@ -373,9 +373,10 @@ async def test_incompleta_data_after_device_restart(hass):
     assert state.attributes.get(ATTR_UNIT_OF_MEASUREMENT) == TEMP_CELSIUS
 
     future = utcnow() + timedelta(minutes=6)
-    with patch(
-        "homeassistant.components.nam.NettigoAirMonitor._async_get_data",
-        return_value=INCOMPLETE_NAM_DATA,
+    update_response = Mock(json=AsyncMock(return_value=INCOMPLETE_NAM_DATA))
+    with patch("homeassistant.components.nam.NettigoAirMonitor.initialize"), patch(
+        "homeassistant.components.nam.NettigoAirMonitor._async_http_request",
+        return_value=update_response,
     ):
         async_fire_time_changed(hass, future)
         await hass.async_block_till_done()
@@ -395,8 +396,8 @@ async def test_availability(hass):
     assert state.state == "7.6"
 
     future = utcnow() + timedelta(minutes=6)
-    with patch(
-        "homeassistant.components.nam.NettigoAirMonitor._async_get_data",
+    with patch("homeassistant.components.nam.NettigoAirMonitor.initialize"), patch(
+        "homeassistant.components.nam.NettigoAirMonitor._async_http_request",
         side_effect=ApiError("API Error"),
     ):
         async_fire_time_changed(hass, future)
@@ -407,9 +408,10 @@ async def test_availability(hass):
     assert state.state == STATE_UNAVAILABLE
 
     future = utcnow() + timedelta(minutes=12)
-    with patch(
-        "homeassistant.components.nam.NettigoAirMonitor._async_get_data",
-        return_value=nam_data,
+    update_response = Mock(json=AsyncMock(return_value=nam_data))
+    with patch("homeassistant.components.nam.NettigoAirMonitor.initialize"), patch(
+        "homeassistant.components.nam.NettigoAirMonitor._async_http_request",
+        return_value=update_response,
     ):
         async_fire_time_changed(hass, future)
         await hass.async_block_till_done()
@@ -426,9 +428,10 @@ async def test_manual_update_entity(hass):
 
     await async_setup_component(hass, "homeassistant", {})
 
-    with patch(
-        "homeassistant.components.nam.NettigoAirMonitor._async_get_data",
-        return_value=nam_data,
+    update_response = Mock(json=AsyncMock(return_value=nam_data))
+    with patch("homeassistant.components.nam.NettigoAirMonitor.initialize"), patch(
+        "homeassistant.components.nam.NettigoAirMonitor._async_http_request",
+        return_value=update_response,
     ) as mock_get_data:
         await hass.services.async_call(
             "homeassistant",