diff --git a/esphome/components/api/api_connection.cpp b/esphome/components/api/api_connection.cpp
index 537d75467f..af25dbfa1a 100644
--- a/esphome/components/api/api_connection.cpp
+++ b/esphome/components/api/api_connection.cpp
@@ -1433,7 +1433,36 @@ HelloResponse APIConnection::hello(const HelloRequest &msg) {
   resp.server_info = App.get_name() + " (esphome v" ESPHOME_VERSION ")";
   resp.name = App.get_name();
 
-  this->flags_.connection_state = static_cast<uint8_t>(ConnectionState::CONNECTED);
+  // Auto-authenticate if no password is required
+#ifdef USE_API_PASSWORD
+  if (!this->parent_->uses_password()) {
+    this->flags_.connection_state = static_cast<uint8_t>(ConnectionState::AUTHENTICATED);
+    ESP_LOGD(TAG, "%s connected (no password)", this->get_client_combined_info().c_str());
+#ifdef USE_API_CLIENT_CONNECTED_TRIGGER
+    this->parent_->get_client_connected_trigger()->trigger(this->client_info_, this->client_peername_);
+#endif
+#ifdef USE_HOMEASSISTANT_TIME
+    if (homeassistant::global_homeassistant_time != nullptr) {
+      this->send_time_request();
+    }
+#endif
+  } else {
+    this->flags_.connection_state = static_cast<uint8_t>(ConnectionState::CONNECTED);
+  }
+#else
+  // No password support compiled in, always authenticate
+  this->flags_.connection_state = static_cast<uint8_t>(ConnectionState::AUTHENTICATED);
+  ESP_LOGD(TAG, "%s connected (no password)", this->get_client_combined_info().c_str());
+#ifdef USE_API_CLIENT_CONNECTED_TRIGGER
+  this->parent_->get_client_connected_trigger()->trigger(this->client_info_, this->client_peername_);
+#endif
+#ifdef USE_HOMEASSISTANT_TIME
+  if (homeassistant::global_homeassistant_time != nullptr) {
+    this->send_time_request();
+  }
+#endif
+#endif
+
   return resp;
 }
 ConnectResponse APIConnection::connect(const ConnectRequest &msg) {