diff --git a/docs/resources/user.md b/docs/resources/user.md
index 5a0334e917..4c54bfc248 100644
--- a/docs/resources/user.md
+++ b/docs/resources/user.md
@@ -50,6 +50,9 @@ The following arguments are supported:
 * `onpremises_immutable_id` - (Optional) The value used to associate an on-premise Active Directory user account with their Azure AD user object. This must be specified if you are using a federated domain for the user's `user_principal_name` property when creating a new user account.
 * `other_mails` - (Optional) A list of additional email addresses for the user.
 * `password` - (Optional) The password for the user. The password must satisfy minimum requirements as specified by the password policy. The maximum length is 256 characters. This property is required when creating a new user.
+
+-> **Passwords and importing users** Passwords can be changed but not cleared. Removing the `password` property for an existing user resource, or setting the password value to a blank string, will not remove the password. When importing a user, Terraform will not reset the password unless the value is subsequently changed in your configuration.
+
 * `postal_code` - (Optional) The postal code for the user's postal address. The postal code is specific to the user's country/region. In the United States of America, this attribute contains the ZIP code.
 * `preferred_language` - (Optional) The user's preferred language, in ISO 639-1 notation.
 * `show_in_address_list` - (Optional) Whether or not the Outlook global address list should include this user. Defaults to `true`.
diff --git a/internal/services/users/user_resource.go b/internal/services/users/user_resource.go
index e7ffe0dc2e..d2b339f3d7 100644
--- a/internal/services/users/user_resource.go
+++ b/internal/services/users/user_resource.go
@@ -341,10 +341,6 @@ func userResource() *schema.Resource {
 }
 
 func userResourceCustomizeDiff(ctx context.Context, diff *schema.ResourceDiff, meta interface{}) error {
-	if diff.Id() == "" && diff.Get("password").(string) == "" {
-		return fmt.Errorf("`password` is required when creating a new user")
-	}
-
 	ageGroup := diff.Get("age_group").(string)
 	consentRequired := diff.Get("consent_provided_for_minor").(string)
 
@@ -358,6 +354,11 @@ func userResourceCustomizeDiff(ctx context.Context, diff *schema.ResourceDiff, m
 func userResourceCreate(ctx context.Context, d *schema.ResourceData, meta interface{}) diag.Diagnostics {
 	client := meta.(*clients.Client).Users.UsersClient
 
+	password := d.Get("password").(string)
+	if password == "" {
+		return tf.ErrorDiagPathF(errors.New("`password` is required when creating a new user"), "password", "Could not create user")
+	}
+
 	upn := d.Get("user_principal_name").(string)
 	mailNickName := d.Get("mail_nickname").(string)
 
@@ -395,7 +396,7 @@ func userResourceCreate(ctx context.Context, d *schema.ResourceData, meta interf
 
 		PasswordProfile: &msgraph.UserPasswordProfile{
 			ForceChangePasswordNextSignIn: utils.Bool(d.Get("force_password_change").(bool)),
-			Password:                      utils.String(d.Get("password").(string)),
+			Password:                      utils.String(password),
 		},
 	}
 
@@ -453,10 +454,10 @@ func userResourceUpdate(ctx context.Context, d *schema.ResourceData, meta interf
 		UsageLocation:           utils.NullableString(d.Get("usage_location").(string)),
 	}
 
-	if d.HasChange("password") {
+	if password := d.Get("password").(string); d.HasChange("password") && password != "" {
 		properties.PasswordProfile = &msgraph.UserPasswordProfile{
 			ForceChangePasswordNextSignIn: utils.Bool(d.Get("force_password_change").(bool)),
-			Password:                      utils.String(d.Get("password").(string)),
+			Password:                      utils.String(password),
 		}
 	}
 
diff --git a/internal/services/users/user_resource_test.go b/internal/services/users/user_resource_test.go
index 39b2d1c965..76fe378f1e 100644
--- a/internal/services/users/user_resource_test.go
+++ b/internal/services/users/user_resource_test.go
@@ -4,6 +4,7 @@ import (
 	"context"
 	"fmt"
 	"net/http"
+	"regexp"
 	"testing"
 
 	"github.com/hashicorp/terraform-plugin-sdk/v2/helper/resource"
@@ -98,6 +99,33 @@ func TestAccUser_threeUsersABC(t *testing.T) {
 	})
 }
 
+func TestAccUser_withRandomProvider(t *testing.T) {
+	data := acceptance.BuildTestData(t, "azuread_user", "test")
+	r := UserResource{}
+
+	data.ResourceTest(t, r, []resource.TestStep{
+		{
+			Config: r.withRandomProvider(data),
+			Check: resource.ComposeTestCheckFunc(
+				check.That(data.ResourceName).ExistsInAzure(r),
+			),
+		},
+		data.ImportStep("force_password_change", "password"),
+	})
+}
+
+func TestAccUser_passwordOmitted(t *testing.T) {
+	data := acceptance.BuildTestData(t, "azuread_user", "test")
+	r := UserResource{}
+
+	data.ResourceTest(t, r, []resource.TestStep{
+		{
+			Config:      r.passwordOmitted(data),
+			ExpectError: regexp.MustCompile("`password` is required when creating a new user"),
+		},
+	})
+}
+
 func (r UserResource) Exists(ctx context.Context, clients *clients.Client, state *terraform.InstanceState) (*bool, error) {
 	client := clients.Users.UsersClient
 	client.BaseClient.DisableRetries = true
@@ -202,3 +230,39 @@ resource "azuread_user" "testC" {
 }
 `, data.RandomInteger, data.RandomPassword)
 }
+
+func (UserResource) withRandomProvider(data acceptance.TestData) string {
+	return fmt.Sprintf(`
+provider "azuread" {}
+provider "random" {}
+
+data "azuread_domains" "test" {
+  only_initial = true
+}
+
+resource "random_password" "test" {
+  length = 32
+}
+
+resource "azuread_user" "test" {
+  user_principal_name = "acctestUser.%[1]d@${data.azuread_domains.test.domains.0.domain_name}"
+  display_name        = "acctestUser-%[1]d"
+  password            = random_password.test.result
+}
+`, data.RandomInteger)
+}
+
+func (UserResource) passwordOmitted(data acceptance.TestData) string {
+	return fmt.Sprintf(`
+provider "azuread" {}
+
+data "azuread_domains" "test" {
+  only_initial = true
+}
+
+resource "azuread_user" "test" {
+  user_principal_name = "acctestUser.%[1]d@${data.azuread_domains.test.domains.0.domain_name}"
+  display_name        = "acctestUser-%[1]d"
+}
+`, data.RandomInteger)
+}