diff --git a/rust/agama-lib/src/users/settings.rs b/rust/agama-lib/src/users/settings.rs
index f5e2bc05e5..bd5eea47af 100644
--- a/rust/agama-lib/src/users/settings.rs
+++ b/rust/agama-lib/src/users/settings.rs
@@ -59,6 +59,7 @@ pub struct RootUserSettings {
     #[serde(skip_serializing)]
     pub password: Option<String>,
     /// Whether the password is encrypted or is plain text
+    #[serde(skip_serializing)]
     pub encrypted_password: Option<bool>,
     /// Root SSH public key
     pub ssh_public_key: Option<String>,
diff --git a/service/lib/agama/autoyast/root_reader.rb b/service/lib/agama/autoyast/root_reader.rb
index 1598cc5f92..14df63e3c2 100755
--- a/service/lib/agama/autoyast/root_reader.rb
+++ b/service/lib/agama/autoyast/root_reader.rb
@@ -41,6 +41,8 @@ def read
         return {} unless root_user
 
         hsh = { "password" => root_user.password.value.to_s }
+        hsh["passwordEncrypted"] = true if root_user.password.value.encrypted?
+
         public_key = root_user.authorized_keys.first
         hsh["sshPublicKey"] = public_key if public_key
         { "root" => hsh }
diff --git a/service/lib/agama/autoyast/user_reader.rb b/service/lib/agama/autoyast/user_reader.rb
index 1df0ec05b3..04c62d8e69 100755
--- a/service/lib/agama/autoyast/user_reader.rb
+++ b/service/lib/agama/autoyast/user_reader.rb
@@ -45,6 +45,9 @@ def read
           "fullName" => user.gecos.first.to_s,
           "password" => user.password.value.to_s
         }
+
+        hsh["passwordEncrypted"] = true if user.password.value.encrypted?
+
         { "user" => hsh }
       end