diff --git a/src/components/settings/SecurityTab.tsx b/src/components/settings/SecurityTab.tsx
index df731081..a6ed47a4 100644
--- a/src/components/settings/SecurityTab.tsx
+++ b/src/components/settings/SecurityTab.tsx
@@ -11,7 +11,6 @@ import { TOTPSetup } from '@/components/auth/TOTPSetup';
 import { GoogleIcon } from '@/components/icons/GoogleIcon';
 import { DiscordIcon } from '@/components/icons/DiscordIcon';
 import { PasswordUpdateDialog } from './PasswordUpdateDialog';
-import { PasswordSetupDialog } from '@/components/auth/PasswordSetupDialog';
 import {
   getUserIdentities,
   checkDisconnectSafety,
@@ -22,6 +21,8 @@ import {
 } from '@/lib/identityService';
 import type { UserIdentity, OAuthProvider } from '@/types/identity';
 import { toast as sonnerToast } from '@/components/ui/sonner';
+import { supabase } from '@/integrations/supabase/client';
+
 export function SecurityTab() {
   const { user } = useAuth();
   const { toast } = useToast();
@@ -30,9 +31,7 @@ export function SecurityTab() {
   const [identities, setIdentities] = useState<UserIdentity[]>([]);
   const [loadingIdentities, setLoadingIdentities] = useState(true);
   const [disconnectingProvider, setDisconnectingProvider] = useState<OAuthProvider | null>(null);
-  const [passwordSetupProvider, setPasswordSetupProvider] = useState<OAuthProvider | null>(null);
   const [hasPassword, setHasPassword] = useState(false);
-  const [addPasswordMode, setAddPasswordMode] = useState<'standalone' | 'disconnect'>('standalone');
   const [addingPassword, setAddingPassword] = useState(false);
   const [showOrphanedPasswordOption, setShowOrphanedPasswordOption] = useState(false);
 
@@ -98,13 +97,12 @@ export function SecurityTab() {
     
     if (!safetyCheck.canDisconnect) {
       if (safetyCheck.reason === 'no_password_backup') {
-        // Show password setup dialog
-        setAddPasswordMode('disconnect');
-        setPasswordSetupProvider(provider);
+        // Trigger password reset flow first
+        await handleAddPassword();
         toast({
-          title: "Password Required",
-          description: "Set a password before disconnecting your last social login to maintain account access.",
-          variant: "default"
+          title: "Password Required First",
+          description: "Check your email for a password reset link. Once you've set a password, you can disconnect your social login.",
+          duration: 10000
         });
         return;
       }
@@ -139,42 +137,43 @@ export function SecurityTab() {
     }
   };
 
-  const handlePasswordSetupSuccess = (email?: string, needsConfirmation?: boolean) => {
-    if (email && needsConfirmation) {
-      // Password setup initiated via reset flow
+  const handleAddPassword = async () => {
+    setAddingPassword(true);
+    
+    const { data: { user } } = await supabase.auth.getUser();
+    
+    if (!user?.email) {
       toast({
-        title: 'Check Your Email',
-        description: "Click the password reset link from Supabase to complete setup. You'll receive two emails: one with the reset link, and one with instructions from ThrillWiki.",
-        duration: 15000,
+        title: "No Email Found",
+        description: "Your account doesn't have an email address associated with it.",
+        variant: "destructive"
       });
-      
-      // Stay on settings page - user will complete setup via email link
-    } else if (email) {
-      // Fallback: direct password set (shouldn't happen with new flow)
+      setAddingPassword(false);
+      return;
+    }
+    
+    // Trigger password reset email directly (no modal needed!)
+    const { error } = await supabase.auth.resetPasswordForEmail(
+      user.email,
+      {
+        redirectTo: `${window.location.origin}/auth/callback?action=password-setup-direct`
+      }
+    );
+    
+    if (error) {
       toast({
-        title: 'Password Set Successfully',
-        description: 'You can now sign in with your email and password.',
-        duration: 6000,
+        title: "Failed to Send Email",
+        description: error.message,
+        variant: "destructive"
       });
     } else {
-      // Normal password change flow (user already had email identity)
-      setAddingPassword(true);
-      
-      loadIdentities().then(() => {
-        toast({
-          title: 'Password Updated',
-          description: 'Your password has been successfully updated.',
-        });
-        setPasswordSetupProvider(null);
-      }).finally(() => {
-        setAddingPassword(false);
+      sonnerToast.success("Password Reset Email Sent!", {
+        description: "Check your email for a password reset link from Supabase. Click the link to set your password. You'll also receive a notification email from ThrillWiki.",
+        duration: 15000,
       });
     }
-  };
-
-  const handleAddPassword = () => {
-    setAddPasswordMode('standalone');
-    setPasswordSetupProvider('google' as OAuthProvider);
+    
+    setAddingPassword(false);
   };
 
   const handleSendConfirmationEmail = async () => {
@@ -224,16 +223,6 @@ export function SecurityTab() {
         }}
       />
 
-      {passwordSetupProvider && (
-        <PasswordSetupDialog
-          open={!!passwordSetupProvider}
-          onOpenChange={(open) => !open && setPasswordSetupProvider(null)}
-          onSuccess={(email, needsConfirmation) => handlePasswordSetupSuccess(email, needsConfirmation)}
-          provider={passwordSetupProvider}
-          mode={addPasswordMode}
-        />
-      )}
-
       <div className="space-y-8">
         {/* Password Section - Conditional based on auth method */}
         <div className="space-y-4">
@@ -263,7 +252,7 @@ export function SecurityTab() {
                     {addingPassword ? (
                       <>
                         <Loader2 className="w-4 h-4 mr-2 animate-spin" />
-                        Adding Password...
+                        Sending Email...
                       </>
                     ) : (
                       'Add Password'
diff --git a/src/pages/AuthCallback.tsx b/src/pages/AuthCallback.tsx
index cfdd8686..74da9855 100644
--- a/src/pages/AuthCallback.tsx
+++ b/src/pages/AuthCallback.tsx
@@ -36,6 +36,25 @@ export default function AuthCallback() {
         const urlParams = new URLSearchParams(window.location.search);
         const action = urlParams.get('action');
 
+        if (action === 'password-setup-direct') {
+          console.log('[AuthCallback] Processing password-setup-direct action (direct reset flow)');
+          
+          // User set password via Supabase's hosted page
+          // Email identity is already created automatically
+          
+          toast({
+            title: "Password Set Successfully!",
+            description: "Your email identity has been created. You can now sign in with your email and password.",
+          });
+          
+          // Redirect to auth page for sign-in
+          setTimeout(() => {
+            navigate('/auth');
+          }, 1500);
+          
+          return;
+        }
+
         if (action === 'password-setup') {
           console.log('[AuthCallback] Processing password-setup action');