diff --git a/src/components/auth/PasswordSetupDialog.tsx b/src/components/auth/PasswordSetupDialog.tsx
index f4022608..c4e36a27 100644
--- a/src/components/auth/PasswordSetupDialog.tsx
+++ b/src/components/auth/PasswordSetupDialog.tsx
@@ -18,7 +18,7 @@ import type { OAuthProvider } from '@/types/identity';
 interface PasswordSetupDialogProps {
   open: boolean;
   onOpenChange: (open: boolean) => void;
-  onSuccess: (email?: string) => void;
+  onSuccess: (email?: string, needsConfirmation?: boolean) => void;
   provider?: OAuthProvider;
   mode?: 'standalone' | 'disconnect';
 }
@@ -61,8 +61,8 @@ export function PasswordSetupDialog({
       setConfirmPassword('');
       
       if (result.needsRelogin && result.email) {
-        // Pass email to parent for redirect handling
-        onSuccess(result.email);
+        // Pass email and confirmation flag to parent for redirect handling
+        onSuccess(result.email, result.needsEmailConfirmation);
       } else {
         onSuccess();
       }
diff --git a/src/components/settings/SecurityTab.tsx b/src/components/settings/SecurityTab.tsx
index 82c70d85..ed3bb682 100644
--- a/src/components/settings/SecurityTab.tsx
+++ b/src/components/settings/SecurityTab.tsx
@@ -122,14 +122,22 @@ export function SecurityTab() {
     }
   };
 
-  const handlePasswordSetupSuccess = async (email?: string) => {
+  const handlePasswordSetupSuccess = (email?: string, needsConfirmation?: boolean) => {
     if (email) {
-      // Password was set, user was logged out, needs to sign in with email/password
-      toast({
-        title: 'Password Set Successfully',
-        description: 'Please sign in with your email and password to complete setup.',
-        duration: 6000,
-      });
+      // Password was set, user was logged out, needs to confirm email
+      if (needsConfirmation) {
+        toast({
+          title: 'Check Your Email',
+          description: 'A confirmation link has been sent to your email. Click it to activate password authentication, then sign in.',
+          duration: 10000,
+        });
+      } else {
+        toast({
+          title: 'Password Set Successfully',
+          description: 'Please sign in with your email and password to complete setup.',
+          duration: 6000,
+        });
+      }
       
       // Redirect to auth page with email pre-filled
       navigate(`/auth?email=${encodeURIComponent(email)}&message=complete-password-setup`);
@@ -137,16 +145,15 @@ export function SecurityTab() {
       // Normal password change flow (user already had email identity)
       setAddingPassword(true);
       
-      try {
-        await loadIdentities();
+      loadIdentities().then(() => {
         toast({
           title: 'Password Updated',
           description: 'Your password has been successfully updated.',
         });
         setPasswordSetupProvider(null);
-      } finally {
+      }).finally(() => {
         setAddingPassword(false);
-      }
+      });
     }
   };
 
@@ -185,7 +192,7 @@ export function SecurityTab() {
         <PasswordSetupDialog
           open={!!passwordSetupProvider}
           onOpenChange={(open) => !open && setPasswordSetupProvider(null)}
-          onSuccess={handlePasswordSetupSuccess}
+          onSuccess={(email, needsConfirmation) => handlePasswordSetupSuccess(email, needsConfirmation)}
           provider={passwordSetupProvider}
           mode={addPasswordMode}
         />
diff --git a/src/lib/identityService.ts b/src/lib/identityService.ts
index e8fb31c0..957bcb13 100644
--- a/src/lib/identityService.ts
+++ b/src/lib/identityService.ts
@@ -213,9 +213,13 @@ export async function addPasswordToAccount(
       };
     }
     
-    // Step 1: Update password
-    console.log('[IdentityService] Setting password for user');
-    const { error: updateError } = await supabase.auth.updateUser({ password });
+    // Step 1: Update password AND trigger email confirmation
+    // Re-confirming the email will trigger Supabase to create the email identity
+    console.log('[IdentityService] Setting password and triggering email confirmation');
+    const { error: updateError } = await supabase.auth.updateUser({ 
+      password,
+      email: userEmail // Re-confirm email to create email identity provider
+    });
     if (updateError) throw updateError;
     
     // Step 2: Get user profile for email personalization
@@ -248,17 +252,18 @@ export async function addPasswordToAccount(
     
     // Step 4: Log the password addition
     await logIdentityChange(user!.id, 'password_added', { 
-      method: 'oauth_with_relogin_required' 
+      method: 'oauth_with_email_confirmation_required' 
     });
     
-    // Step 5: Sign the user out so they can sign back in with email/password
-    console.log('[IdentityService] Signing user out to force re-login');
+    // Step 5: Sign the user out so they can confirm email
+    console.log('[IdentityService] Signing user out to complete email confirmation');
     await supabase.auth.signOut();
     
-    // Return success with relogin flag
+    // Return success with relogin and email confirmation flags
     return { 
       success: true,
       needsRelogin: true,
+      needsEmailConfirmation: true,
       email: userEmail
     };
     
diff --git a/src/pages/Auth.tsx b/src/pages/Auth.tsx
index 8acb7df2..1a7d40ca 100644
--- a/src/pages/Auth.tsx
+++ b/src/pages/Auth.tsx
@@ -390,7 +390,7 @@ export default function Auth() {
                     <Alert className="mb-4">
                       <AlertCircle className="h-4 w-4" />
                       <AlertDescription>
-                        Your password has been set. Please sign in with your email and password to complete the setup.
+                        <strong>Password setup in progress.</strong> Check your email for a confirmation link. After confirming your email, sign in below with your email and password.
                       </AlertDescription>
                     </Alert>
                   )}
diff --git a/src/types/identity.ts b/src/types/identity.ts
index 712e316d..36980b96 100644
--- a/src/types/identity.ts
+++ b/src/types/identity.ts
@@ -31,5 +31,6 @@ export interface IdentityOperationResult {
   success: boolean;
   error?: string;
   needsRelogin?: boolean;
+  needsEmailConfirmation?: boolean;
   email?: string;
 }
diff --git a/supabase/functions/send-password-added-email/index.ts b/supabase/functions/send-password-added-email/index.ts
index 17479774..8e70206d 100644
--- a/supabase/functions/send-password-added-email/index.ts
+++ b/supabase/functions/send-password-added-email/index.ts
@@ -76,12 +76,22 @@ serve(async (req) => {
               </ul>
               
               <h3>🔐 Complete Your Setup</h3>
-              <p>To activate your password authentication, please sign in with your new credentials:</p>
+              <p><strong>Important:</strong> To complete your password setup, you need to confirm your email address.</p>
               
-              <a href="${siteUrl}/auth?email=${encodeURIComponent(email)}" class="button">
-                Sign In Now
+              <ol style="padding-left: 20px; margin: 15px 0; line-height: 1.8;">
+                <li style="margin-bottom: 8px;">Check your inbox for a <strong>confirmation email</strong> from ThrillWiki</li>
+                <li style="margin-bottom: 8px;">Click the confirmation link in that email</li>
+                <li style="margin-bottom: 8px;">Return to the sign-in page and log in with your email and password</li>
+              </ol>
+              
+              <a href="${siteUrl}/auth?email=${encodeURIComponent(email)}&message=complete-password-setup" class="button">
+                Go to Sign In Page
               </a>
               
+              <p style="margin-top: 15px; font-size: 14px; color: #666;">
+                <strong>Note:</strong> You must confirm your email before you can sign in with your password.
+              </p>
+              
               <div class="security-notice">
                 <strong>⚠️ Security Notice</strong><br>
                 If you didn't add a password to your account, please contact our support team immediately at <strong>support@thrillwiki.com</strong>