diff --git a/homeassistant/components/mikrotik/__init__.py b/homeassistant/components/mikrotik/__init__.py
index 6a158c60fcf..6c98c389984 100644
--- a/homeassistant/components/mikrotik/__init__.py
+++ b/homeassistant/components/mikrotik/__init__.py
@@ -2,7 +2,7 @@
 from homeassistant.config_entries import ConfigEntry
 from homeassistant.const import Platform
 from homeassistant.core import HomeAssistant
-from homeassistant.exceptions import ConfigEntryNotReady
+from homeassistant.exceptions import ConfigEntryAuthFailed, ConfigEntryNotReady
 from homeassistant.helpers import config_validation as cv, device_registry as dr
 
 from .const import ATTR_MANUFACTURER, DOMAIN
@@ -20,8 +20,8 @@ async def async_setup_entry(hass: HomeAssistant, config_entry: ConfigEntry) -> b
         api = await hass.async_add_executor_job(get_api, dict(config_entry.data))
     except CannotConnect as api_error:
         raise ConfigEntryNotReady from api_error
-    except LoginError:
-        return False
+    except LoginError as err:
+        raise ConfigEntryAuthFailed from err
 
     coordinator = MikrotikDataUpdateCoordinator(hass, config_entry, api)
     await hass.async_add_executor_job(coordinator.api.get_hub_details)
diff --git a/homeassistant/components/mikrotik/config_flow.py b/homeassistant/components/mikrotik/config_flow.py
index ed62734578f..84b334c5f8f 100644
--- a/homeassistant/components/mikrotik/config_flow.py
+++ b/homeassistant/components/mikrotik/config_flow.py
@@ -1,6 +1,7 @@
 """Config flow for Mikrotik."""
 from __future__ import annotations
 
+from collections.abc import Mapping
 from typing import Any
 
 import voluptuous as vol
@@ -33,6 +34,7 @@ class MikrotikFlowHandler(config_entries.ConfigFlow, domain=DOMAIN):
     """Handle a Mikrotik config flow."""
 
     VERSION = 1
+    _reauth_entry: config_entries.ConfigEntry | None
 
     @staticmethod
     @callback
@@ -76,6 +78,49 @@ class MikrotikFlowHandler(config_entries.ConfigFlow, domain=DOMAIN):
             errors=errors,
         )
 
+    async def async_step_reauth(self, data: Mapping[str, Any]) -> FlowResult:
+        """Perform reauth upon an API authentication error."""
+        self._reauth_entry = self.hass.config_entries.async_get_entry(
+            self.context["entry_id"]
+        )
+        return await self.async_step_reauth_confirm()
+
+    async def async_step_reauth_confirm(
+        self, user_input: dict[str, str] | None = None
+    ) -> FlowResult:
+        """Confirm reauth dialog."""
+        errors = {}
+        assert self._reauth_entry
+        if user_input is not None:
+            user_input = {**self._reauth_entry.data, **user_input}
+            try:
+                await self.hass.async_add_executor_job(get_api, user_input)
+            except CannotConnect:
+                errors["base"] = "cannot_connect"
+            except LoginError:
+                errors[CONF_PASSWORD] = "invalid_auth"
+
+            if not errors:
+                self.hass.config_entries.async_update_entry(
+                    self._reauth_entry,
+                    data=user_input,
+                )
+                await self.hass.config_entries.async_reload(self._reauth_entry.entry_id)
+                return self.async_abort(reason="reauth_successful")
+
+        return self.async_show_form(
+            description_placeholders={
+                CONF_USERNAME: self._reauth_entry.data[CONF_USERNAME]
+            },
+            step_id="reauth_confirm",
+            data_schema=vol.Schema(
+                {
+                    vol.Required(CONF_PASSWORD): str,
+                }
+            ),
+            errors=errors,
+        )
+
 
 class MikrotikOptionsFlowHandler(config_entries.OptionsFlow):
     """Handle Mikrotik options."""
diff --git a/homeassistant/components/mikrotik/hub.py b/homeassistant/components/mikrotik/hub.py
index 08320c603f9..26a58948620 100644
--- a/homeassistant/components/mikrotik/hub.py
+++ b/homeassistant/components/mikrotik/hub.py
@@ -13,6 +13,7 @@ from librouteros.login import plain as login_plain, token as login_token
 from homeassistant.config_entries import ConfigEntry
 from homeassistant.const import CONF_HOST, CONF_PASSWORD, CONF_USERNAME, CONF_VERIFY_SSL
 from homeassistant.core import HomeAssistant
+from homeassistant.exceptions import ConfigEntryAuthFailed
 from homeassistant.helpers.update_coordinator import DataUpdateCoordinator, UpdateFailed
 
 from .const import (
@@ -132,8 +133,10 @@ class MikrotikData:
             # get new hub firmware version if updated
             self.firmware = self.get_info(ATTR_FIRMWARE)
 
-        except (CannotConnect, LoginError) as err:
+        except CannotConnect as err:
             raise UpdateFailed from err
+        except LoginError as err:
+            raise ConfigEntryAuthFailed from err
 
         if not device_list:
             return
diff --git a/homeassistant/components/mikrotik/strings.json b/homeassistant/components/mikrotik/strings.json
index 6d421cb1838..ec47d98b7a9 100644
--- a/homeassistant/components/mikrotik/strings.json
+++ b/homeassistant/components/mikrotik/strings.json
@@ -11,6 +11,13 @@
           "port": "[%key:common::config_flow::data::port%]",
           "verify_ssl": "Use ssl"
         }
+      },
+      "reauth_confirm": {
+        "description": "The password for {username} is invalid.",
+        "title": "[%key:common::config_flow::title::reauth%]",
+        "data": {
+          "password": "[%key:common::config_flow::data::password%]"
+        }
       }
     },
     "error": {
@@ -19,7 +26,8 @@
       "invalid_auth": "[%key:common::config_flow::error::invalid_auth%]"
     },
     "abort": {
-      "already_configured": "[%key:common::config_flow::abort::already_configured_device%]"
+      "already_configured": "[%key:common::config_flow::abort::already_configured_device%]",
+      "reauth_successful": "[%key:common::config_flow::abort::reauth_successful%]"
     }
   },
   "options": {
diff --git a/homeassistant/components/mikrotik/translations/en.json b/homeassistant/components/mikrotik/translations/en.json
index d60a7064e3a..9874ed21ff1 100644
--- a/homeassistant/components/mikrotik/translations/en.json
+++ b/homeassistant/components/mikrotik/translations/en.json
@@ -1,7 +1,8 @@
 {
     "config": {
         "abort": {
-            "already_configured": "Device is already configured"
+            "already_configured": "Device is already configured",
+            "reauth_successful": "Re-authentication was successful"
         },
         "error": {
             "cannot_connect": "Failed to connect",
@@ -9,6 +10,13 @@
             "name_exists": "Name exists"
         },
         "step": {
+            "reauth_confirm": {
+                "data": {
+                    "password": "Password"
+                },
+                "description": "The password for {username} is invalid.",
+                "title": "Reauthenticate Integration"
+            },
             "user": {
                 "data": {
                     "host": "Host",
diff --git a/tests/components/mikrotik/test_config_flow.py b/tests/components/mikrotik/test_config_flow.py
index 6a71806cea9..6a2945c406b 100644
--- a/tests/components/mikrotik/test_config_flow.py
+++ b/tests/components/mikrotik/test_config_flow.py
@@ -162,3 +162,99 @@ async def test_wrong_credentials(hass, auth_error):
         CONF_USERNAME: "invalid_auth",
         CONF_PASSWORD: "invalid_auth",
     }
+
+
+async def test_reauth_success(hass, api):
+    """Test we can reauth."""
+    entry = MockConfigEntry(
+        domain=DOMAIN,
+        data=DEMO_USER_INPUT,
+    )
+    entry.add_to_hass(hass)
+
+    result = await hass.config_entries.flow.async_init(
+        DOMAIN,
+        context={
+            "source": config_entries.SOURCE_REAUTH,
+            "entry_id": entry.entry_id,
+        },
+        data=DEMO_USER_INPUT,
+    )
+
+    assert result["type"] == "form"
+    assert result["step_id"] == "reauth_confirm"
+    assert result["description_placeholders"] == {CONF_USERNAME: "username"}
+
+    result2 = await hass.config_entries.flow.async_configure(
+        result["flow_id"],
+        {
+            CONF_PASSWORD: "test-password",
+        },
+    )
+
+    assert result2["type"] == "abort"
+    assert result2["reason"] == "reauth_successful"
+
+
+async def test_reauth_failed(hass, auth_error):
+    """Test reauth fails due to wrong password."""
+    entry = MockConfigEntry(
+        domain=DOMAIN,
+        data=DEMO_USER_INPUT,
+    )
+    entry.add_to_hass(hass)
+
+    result = await hass.config_entries.flow.async_init(
+        DOMAIN,
+        context={
+            "source": config_entries.SOURCE_REAUTH,
+            "entry_id": entry.entry_id,
+        },
+        data=DEMO_USER_INPUT,
+    )
+
+    assert result["type"] == "form"
+    assert result["step_id"] == "reauth_confirm"
+
+    result2 = await hass.config_entries.flow.async_configure(
+        result["flow_id"],
+        {
+            CONF_PASSWORD: "test-wrong-password",
+        },
+    )
+
+    assert result2["type"] == "form"
+    assert result2["errors"] == {
+        CONF_PASSWORD: "invalid_auth",
+    }
+
+
+async def test_reauth_failed_conn_error(hass, conn_error):
+    """Test reauth failed due to connection error."""
+    entry = MockConfigEntry(
+        domain=DOMAIN,
+        data=DEMO_USER_INPUT,
+    )
+    entry.add_to_hass(hass)
+
+    result = await hass.config_entries.flow.async_init(
+        DOMAIN,
+        context={
+            "source": config_entries.SOURCE_REAUTH,
+            "entry_id": entry.entry_id,
+        },
+        data=DEMO_USER_INPUT,
+    )
+
+    assert result["type"] == "form"
+    assert result["step_id"] == "reauth_confirm"
+
+    result2 = await hass.config_entries.flow.async_configure(
+        result["flow_id"],
+        {
+            CONF_PASSWORD: "test-wrong-password",
+        },
+    )
+
+    assert result2["type"] == "form"
+    assert result2["errors"] == {"base": "cannot_connect"}