diff --git a/api/external/iam/v2/request/users.pb.go b/api/external/iam/v2/request/users.pb.go
index 8cd4b9ed997..0fd8cfebcd6 100644
--- a/api/external/iam/v2/request/users.pb.go
+++ b/api/external/iam/v2/request/users.pb.go
@@ -37,6 +37,8 @@ type CreateUserReq struct {
 	Name string `protobuf:"bytes,2,opt,name=name,proto3" json:"name,omitempty"`
 	// Password for user. Used to sign in.
 	Password string `protobuf:"bytes,3,opt,name=password,proto3" json:"password,omitempty"`
+	//boolean for if hash password there
+	IsHashed bool `protobuf:"varint,4,opt,name=is_hashed,json=isHashed,proto3" json:"is_hashed,omitempty"`
 }
 
 func (x *CreateUserReq) Reset() {
@@ -92,6 +94,13 @@ func (x *CreateUserReq) GetPassword() string {
 	return ""
 }
 
+func (x *CreateUserReq) GetIsHashed() bool {
+	if x != nil {
+		return x.IsHashed
+	}
+	return false
+}
+
 type ListUsersReq struct {
 	state         protoimpl.MessageState
 	sizeCache     protoimpl.SizeCache
@@ -378,53 +387,55 @@ var file_external_iam_v2_request_users_proto_rawDesc = []byte{
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 }
 
 var (
diff --git a/api/external/iam/v2/request/users.proto b/api/external/iam/v2/request/users.proto
index 8e04967ce63..97eed6f8543 100644
--- a/api/external/iam/v2/request/users.proto
+++ b/api/external/iam/v2/request/users.proto
@@ -18,6 +18,8 @@ message CreateUserReq {
   string name = 2;
   // Password for user. Used to sign in.
   string password = 3;
+  //boolean for if hash password there
+  bool is_hashed = 4;
 }
 
 message ListUsersReq {}
diff --git a/api/external/iam/v2/users.proto b/api/external/iam/v2/users.proto
index 17225bd8cac..c2375940689 100644
--- a/api/external/iam/v2/users.proto
+++ b/api/external/iam/v2/users.proto
@@ -59,7 +59,7 @@ service Users {
     option (chef.automate.api.iam.policy).action = "iam:users:create";
   };
 
-  /*
+	/*
   List all users
 
   Lists all local users.
diff --git a/api/external/iam/v2/users.swagger.json b/api/external/iam/v2/users.swagger.json
index 9e28d45953c..f2bdb161aee 100644
--- a/api/external/iam/v2/users.swagger.json
+++ b/api/external/iam/v2/users.swagger.json
@@ -250,6 +250,11 @@
         "password": {
           "type": "string",
           "description": "Password for user. Used to sign in."
+        },
+        "is_hashed": {
+          "type": "boolean",
+          "format": "boolean",
+          "title": "boolean for if hash password there"
         }
       },
       "required": [
diff --git a/api/interservice/local_user/users.pb.go b/api/interservice/local_user/users.pb.go
index 7ba85578723..ac17fa725b2 100644
--- a/api/interservice/local_user/users.pb.go
+++ b/api/interservice/local_user/users.pb.go
@@ -193,6 +193,8 @@ type CreateUserReq struct {
 	Email string `protobuf:"bytes,3,opt,name=email,proto3" json:"email,omitempty" toml:"email,omitempty" mapstructure:"email,omitempty"`
 	// Note: password validation happens in the service's handler
 	Password string `protobuf:"bytes,4,opt,name=password,proto3" json:"password,omitempty" toml:"password,omitempty" mapstructure:"password,omitempty"`
+	// hashed password provided
+	IsHashed bool `protobuf:"varint,5,opt,name=is_hashed,json=isHashed,proto3" json:"is_hashed,omitempty" toml:"is_hashed,omitempty" mapstructure:"is_hashed,omitempty"`
 }
 
 func (x *CreateUserReq) Reset() {
@@ -255,6 +257,13 @@ func (x *CreateUserReq) GetPassword() string {
 	return ""
 }
 
+func (x *CreateUserReq) GetIsHashed() bool {
+	if x != nil {
+		return x.IsHashed
+	}
+	return false
+}
+
 type UpdateUserReq struct {
 	state         protoimpl.MessageState
 	sizeCache     protoimpl.SizeCache
@@ -530,7 +539,7 @@ var file_interservice_local_user_users_proto_rawDesc = []byte{
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+	0x06, 0x70, 0x72, 0x6f, 0x74, 0x6f, 0x33,
 }
 
 var (
diff --git a/api/interservice/local_user/users.pb.validate.go b/api/interservice/local_user/users.pb.validate.go
index 5b285e535e5..31e70af0113 100644
--- a/api/interservice/local_user/users.pb.validate.go
+++ b/api/interservice/local_user/users.pb.validate.go
@@ -263,6 +263,8 @@ func (m *CreateUserReq) Validate() error {
 
 	// no validation rules for Password
 
+	// no validation rules for IsHashed
+
 	return nil
 }
 
diff --git a/api/interservice/local_user/users.proto b/api/interservice/local_user/users.proto
index f901463d5c4..098f164ae35 100644
--- a/api/interservice/local_user/users.proto
+++ b/api/interservice/local_user/users.proto
@@ -33,6 +33,8 @@ message CreateUserReq {
 
   // Note: password validation happens in the service's handler
   string password = 4;
+  // hashed password provided
+  bool is_hashed = 5;
 }
 
 message UpdateUserReq {
diff --git a/components/automate-gateway/api/users.pb.swagger.go b/components/automate-gateway/api/users.pb.swagger.go
index dc1f1c18fd5..3fb83f81dee 100644
--- a/components/automate-gateway/api/users.pb.swagger.go
+++ b/components/automate-gateway/api/users.pb.swagger.go
@@ -253,6 +253,11 @@ func init() {
         "password": {
           "type": "string",
           "description": "Password for user. Used to sign in."
+        },
+        "is_hashed": {
+          "type": "boolean",
+          "format": "boolean",
+          "title": "boolean for if hash password there"
         }
       },
       "required": [
diff --git a/components/automate-gateway/handler/iam/v2/users/users.go b/components/automate-gateway/handler/iam/v2/users/users.go
index 90fc9638d6b..bf29eb24e0c 100644
--- a/components/automate-gateway/handler/iam/v2/users/users.go
+++ b/components/automate-gateway/handler/iam/v2/users/users.go
@@ -34,6 +34,7 @@ func (p *Server) CreateUser(
 		Name:     in.Name,
 		Email:    in.Id,
 		Password: in.Password,
+		IsHashed: in.IsHashed,
 	})
 	if err != nil {
 		return nil, err
diff --git a/components/local-user-service/server/grpc.go b/components/local-user-service/server/grpc.go
index 30b6717dde3..5ea531011d8 100644
--- a/components/local-user-service/server/grpc.go
+++ b/components/local-user-service/server/grpc.go
@@ -127,6 +127,7 @@ func (s *Server) CreateUser(ctx context.Context, req *local_user.CreateUserReq)
 		Name:     req.Name,
 		Email:    req.Email,
 		Password: req.Password,
+		IsHashed: req.IsHashed,
 	}
 
 	us, err := s.users.CreateUser(ctx, newUser)
diff --git a/components/local-user-service/server/grpc_test.go b/components/local-user-service/server/grpc_test.go
index 04871b599d6..e1873ed25c6 100644
--- a/components/local-user-service/server/grpc_test.go
+++ b/components/local-user-service/server/grpc_test.go
@@ -274,6 +274,21 @@ func TestUsersGRPC(t *testing.T) {
 			grpctest.AssertCode(t, codes.InvalidArgument, err)
 			assert.Nil(t, resp)
 		})
+		t.Run("when user password is hashed", func(t *testing.T) {
+			req := api.CreateUserReq{
+				Id:       "",
+				Name:     "testUser",
+				Email:    "test@test.test",
+				Password: "$2a$12$IEJF1G/DuWESbXjvTmXYaOMLQpLGas9HKqypnmXnZ1G1lO5x6BTUq",
+				IsHashed: true,
+			}
+
+			us, err := cl.CreateUser(ctx, &req)
+			if assert.Nil(t, err) {
+				assert.Equal(t, us.Email, req.Email)
+				assert.Equal(t, us.Name, req.Name)
+			}
+		})
 	})
 
 	t.Run("UpdateSelf", func(t *testing.T) {
diff --git a/components/local-user-service/users/dex/dex.go b/components/local-user-service/users/dex/dex.go
index 29ab15aa22d..03babf18979 100644
--- a/components/local-user-service/users/dex/dex.go
+++ b/components/local-user-service/users/dex/dex.go
@@ -102,12 +102,17 @@ func (s *state) GetPassword(ctx context.Context, email string) (*users.UserWithH
 }
 
 func (s *state) CreateUser(ctx context.Context, user users.User) (*users.ShowUser, error) {
+	var hashedPass []byte
+	var err error
 	// hashes user's password string
-	hashedPass, err := s.HashPassword(user.Password)
-	if err != nil {
-		return nil, errors.Wrap(err, "create password")
+	if user.IsHashed {
+		hashedPass = []byte(user.Password)
+	} else {
+		hashedPass, err = s.HashPassword(user.Password)
+		if err != nil {
+			return nil, errors.Wrap(err, "create password")
+		}
 	}
-
 	// creates password request
 	createReq := &api.CreatePasswordReq{
 		Password: &api.Password{
diff --git a/components/local-user-service/users/types.go b/components/local-user-service/users/types.go
index 5f8fd9d53b1..11d36d2630a 100644
--- a/components/local-user-service/users/types.go
+++ b/components/local-user-service/users/types.go
@@ -19,6 +19,7 @@ type User struct {
 	Name     string `json:"name" binding:"required"`
 	Email    string `json:"email" binding:"required"`
 	Password string `json:"password" binding:"required"`
+	IsHashed bool   `json:"is_hashed" binding:"required"`
 }
 
 // ShowUser does not have the password field so we don't accidentally expose it