diff --git a/modules/caddyhttp/caddyauth/basicauth.go b/modules/caddyhttp/caddyauth/basicauth.go
index 348e23af7..a1bb9c515 100644
--- a/modules/caddyhttp/caddyauth/basicauth.go
+++ b/modules/caddyhttp/caddyauth/basicauth.go
@@ -106,8 +106,8 @@ func (hba *HTTPBasicAuth) Provision(ctx caddy.Context) error {
 			return fmt.Errorf("account %d: username is not unique: %s", i, acct.Username)
 		}
 
-		acct.Username = repl.ReplaceAll(acct.Username, "")
-		acct.Password = repl.ReplaceAll(acct.Password, "")
+		acct.Username = repl.ReplaceKnown(acct.Username, "")
+		acct.Password = repl.ReplaceKnown(acct.Password, "")
 
 		if acct.Username == "" || acct.Password == "" {
 			return fmt.Errorf("account %d: username and password are required", i)
diff --git a/modules/caddyhttp/caddyauth/basicauth_test.go b/modules/caddyhttp/caddyauth/basicauth_test.go
new file mode 100644
index 000000000..37d85dc58
--- /dev/null
+++ b/modules/caddyhttp/caddyauth/basicauth_test.go
@@ -0,0 +1,109 @@
+// Copyright 2015 Matthew Holt and The Caddy Authors
+//
+// Licensed under the Apache License, Version 2.0 (the "License");
+// you may not use this file except in compliance with the License.
+// You may obtain a copy of the License at
+//
+//     http://www.apache.org/licenses/LICENSE-2.0
+//
+// Unless required by applicable law or agreed to in writing, software
+// distributed under the License is distributed on an "AS IS" BASIS,
+// WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+// See the License for the specific language governing permissions and
+// limitations under the License.
+
+package caddyauth
+
+import (
+	"context"
+	"net/http"
+	"net/http/httptest"
+	"sort"
+	"testing"
+
+	"github.com/caddyserver/caddy/v2"
+)
+
+// testBasicAuthHash is a bcrypt hash (cost 4) of the plaintext "correct horse".
+const testBasicAuthHash = "$2a$04$XziKIb5ayw0suaNwlK.1vOqOj9gEveGnkq.anOrdVrnkN5z1bA2A."
+
+func TestBasicAuthProvisionKeepsUnknownPlaceholdersInUsername(t *testing.T) {
+	hba := HTTPBasicAuth{
+		AccountList: []Account{
+			{Username: "alice-{not-a-placeholder}", Password: testBasicAuthHash},
+		},
+	}
+	ctx, cancel := caddy.NewContext(caddy.Context{Context: context.Background()})
+	defer cancel()
+	if err := hba.Provision(ctx); err != nil {
+		t.Fatalf("provisioning failed: %v", err)
+	}
+
+	if _, ok := hba.Accounts["alice-{not-a-placeholder}"]; !ok {
+		t.Fatalf("expected an account for the username as configured, got accounts %q", accountUsernames(hba))
+	}
+
+	req := httptest.NewRequest(http.MethodGet, "/", nil)
+	req.SetBasicAuth("alice-{not-a-placeholder}", "correct horse")
+	user, authenticated, err := hba.Authenticate(httptest.NewRecorder(), req)
+	if err != nil {
+		t.Fatalf("unexpected authentication error: %v", err)
+	}
+	if !authenticated {
+		t.Fatalf("expected authentication to succeed for the username as configured, got accounts %q", accountUsernames(hba))
+	}
+	if user.ID != "alice-{not-a-placeholder}" {
+		t.Fatalf("expected user ID %q, got %q", "alice-{not-a-placeholder}", user.ID)
+	}
+}
+
+func TestBasicAuthProvisionExpandsKnownPlaceholdersInUsername(t *testing.T) {
+	t.Setenv("CADDYTEST_BASICAUTH_USER", "bob")
+
+	hba := HTTPBasicAuth{
+		AccountList: []Account{
+			{Username: "{env.CADDYTEST_BASICAUTH_USER}", Password: testBasicAuthHash},
+		},
+	}
+	ctx, cancel := caddy.NewContext(caddy.Context{Context: context.Background()})
+	defer cancel()
+	if err := hba.Provision(ctx); err != nil {
+		t.Fatalf("provisioning failed: %v", err)
+	}
+
+	req := httptest.NewRequest(http.MethodGet, "/", nil)
+	req.SetBasicAuth("bob", "correct horse")
+	_, authenticated, err := hba.Authenticate(httptest.NewRecorder(), req)
+	if err != nil {
+		t.Fatalf("unexpected authentication error: %v", err)
+	}
+	if !authenticated {
+		t.Fatalf("expected the known placeholder to expand, got accounts %q", accountUsernames(hba))
+	}
+}
+
+func TestBasicAuthProvisionRejectsBracedPasswordInsteadOfRewritingIt(t *testing.T) {
+	hba := HTTPBasicAuth{
+		AccountList: []Account{
+			// a password field carries a hash (MCF or base64), neither of which
+			// can contain braces, so a braced value can only be a mistake and
+			// must not be quietly rewritten into different valid base64
+			{Username: "alice", Password: "ab{cd}ef"},
+		},
+	}
+	ctx, cancel := caddy.NewContext(caddy.Context{Context: context.Background()})
+	defer cancel()
+	err := hba.Provision(ctx)
+	if err == nil {
+		t.Fatalf("expected provisioning to fail for a password with literal braces, instead it accepted the rewritten password %q", hba.Accounts["alice"].password)
+	}
+}
+
+func accountUsernames(hba HTTPBasicAuth) []string {
+	names := make([]string, 0, len(hba.Accounts))
+	for name := range hba.Accounts {
+		names = append(names, name)
+	}
+	sort.Strings(names)
+	return names
+}