diff --git a/spring-boot-project/spring-boot-autoconfigure/src/main/java/org/springframework/boot/autoconfigure/security/reactive/ReactiveAuthenticationManagerConfiguration.java b/spring-boot-project/spring-boot-autoconfigure/src/main/java/org/springframework/boot/autoconfigure/security/reactive/ReactiveAuthenticationManagerConfiguration.java
index 9f3b968d233..2acded6c1d7 100644
--- a/spring-boot-project/spring-boot-autoconfigure/src/main/java/org/springframework/boot/autoconfigure/security/reactive/ReactiveAuthenticationManagerConfiguration.java
+++ b/spring-boot-project/spring-boot-autoconfigure/src/main/java/org/springframework/boot/autoconfigure/security/reactive/ReactiveAuthenticationManagerConfiguration.java
@@ -17,6 +17,7 @@
 package org.springframework.boot.autoconfigure.security.reactive;
 
 import java.util.List;
+import java.util.regex.Pattern;
 
 import org.apache.commons.logging.Log;
 import org.apache.commons.logging.LogFactory;
@@ -33,7 +34,6 @@ import org.springframework.security.core.userdetails.MapReactiveUserDetailsServi
 import org.springframework.security.core.userdetails.ReactiveUserDetailsService;
 import org.springframework.security.core.userdetails.User;
 import org.springframework.security.core.userdetails.UserDetails;
-import org.springframework.security.crypto.factory.PasswordEncoderFactories;
 import org.springframework.security.crypto.password.PasswordEncoder;
 
 /**
@@ -51,6 +51,10 @@ import org.springframework.security.crypto.password.PasswordEncoder;
 @ConditionalOnWebApplication(type = ConditionalOnWebApplication.Type.REACTIVE)
 class ReactiveAuthenticationManagerConfiguration {
 
+	private final Pattern pattern = Pattern.compile("^\\{.+}.*$");
+
+	private static final String NOOP_PREFIX = "{noop}";
+
 	private static final Log logger = LogFactory
 			.getLog(ReactiveAuthenticationManagerConfiguration.class);
 
@@ -63,17 +67,23 @@ class ReactiveAuthenticationManagerConfiguration {
 			logger.info(String.format("%n%nUsing default security password: %s%n",
 					user.getPassword()));
 		}
-		UserDetails userDetails = getUserDetails(user, passwordEncoder);
+		String password = deducePassword(passwordEncoder, user.getPassword());
+		UserDetails userDetails = getUserDetails(user, password);
 		return new MapReactiveUserDetailsService(userDetails);
 	}
 
+	private String deducePassword(ObjectProvider<PasswordEncoder> passwordEncoder, String password) {
+		if (passwordEncoder.getIfAvailable() == null &&
+				!this.pattern.matcher(password).matches()) {
+			return NOOP_PREFIX + password;
+		}
+		return password;
+	}
+
 	private UserDetails getUserDetails(SecurityProperties.User user,
-			ObjectProvider<PasswordEncoder> passwordEncoder) {
-		String encodedPassword = passwordEncoder
-				.getIfAvailable(PasswordEncoderFactories::createDelegatingPasswordEncoder)
-				.encode(user.getPassword());
+			String password) {
 		List<String> roles = user.getRoles();
-		return User.withUsername(user.getName()).password(encodedPassword)
+		return User.withUsername(user.getName()).password(password)
 				.roles(roles.toArray(new String[roles.size()])).build();
 	}
 
diff --git a/spring-boot-project/spring-boot-autoconfigure/src/test/java/org/springframework/boot/autoconfigure/security/reactive/ReactiveAuthenticationManagerConfigurationTests.java b/spring-boot-project/spring-boot-autoconfigure/src/test/java/org/springframework/boot/autoconfigure/security/reactive/ReactiveAuthenticationManagerConfigurationTests.java
new file mode 100644
index 00000000000..bb62585e627
--- /dev/null
+++ b/spring-boot-project/spring-boot-autoconfigure/src/test/java/org/springframework/boot/autoconfigure/security/reactive/ReactiveAuthenticationManagerConfigurationTests.java
@@ -0,0 +1,97 @@
+/*
+ * Copyright 2012-2017 the original author or 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 org.springframework.boot.autoconfigure.security.reactive;
+
+import org.junit.Test;
+
+import org.springframework.boot.autoconfigure.security.SecurityProperties;
+import org.springframework.boot.context.properties.EnableConfigurationProperties;
+import org.springframework.boot.test.context.runner.ReactiveWebApplicationContextRunner;
+import org.springframework.context.annotation.Bean;
+import org.springframework.context.annotation.Configuration;
+import org.springframework.context.annotation.Import;
+import org.springframework.security.config.annotation.web.reactive.EnableWebFluxSecurity;
+import org.springframework.security.core.userdetails.MapReactiveUserDetailsService;
+import org.springframework.security.crypto.password.PasswordEncoder;
+
+import static org.assertj.core.api.Assertions.assertThat;
+import static org.mockito.Mockito.mock;
+
+/**
+ * Tests for {@link ReactiveAuthenticationManagerConfiguration}.
+ *
+ * @author Madhura Bhave
+ */
+public class ReactiveAuthenticationManagerConfigurationTests {
+
+	private final ReactiveWebApplicationContextRunner contextRunner = new ReactiveWebApplicationContextRunner();
+
+	@Test
+	public void userDetailsServiceWhenPasswordEncoderAbsentAndDefaultPassword() throws Exception {
+		this.contextRunner.withUserConfiguration(TestSecurityConfiguration.class,
+				ReactiveAuthenticationManagerConfiguration.class).run((context -> {
+			MapReactiveUserDetailsService userDetailsService = context.getBean(MapReactiveUserDetailsService.class);
+			String password = userDetailsService.findByUsername("user").block().getPassword();
+			assertThat(password).startsWith("{noop}");
+		}));
+	}
+
+	@Test
+	public void userDetailsServiceWhenPasswordEncoderAbsentAndRawPassword() throws Exception {
+		testPasswordEncoding(TestSecurityConfiguration.class, "secret", "{noop}secret");
+	}
+
+	@Test
+	public void userDetailsServiceWhenPasswordEncoderAbsentAndEncodedPassword() throws Exception {
+		String password = "{bcrypt}$2a$10$sCBi9fy9814vUPf2ZRbtp.fR5/VgRk2iBFZ.ypu5IyZ28bZgxrVDa";
+		testPasswordEncoding(TestSecurityConfiguration.class, password, password);
+	}
+
+	@Test
+	public void userDetailsServiceWhenPasswordEncoderBeanPresent() throws Exception {
+		testPasswordEncoding(TestConfigWithPasswordEncoder.class, "secret", "secret");
+	}
+
+	private void testPasswordEncoding(Class<?> configClass, String providedPassword, String expectedPassword) {
+		this.contextRunner.withUserConfiguration(configClass,
+				ReactiveAuthenticationManagerConfiguration.class)
+				.withPropertyValues("spring.security.user.password=" + providedPassword).run((context -> {
+			MapReactiveUserDetailsService userDetailsService = context.getBean(MapReactiveUserDetailsService.class);
+			String password = userDetailsService.findByUsername("user").block().getPassword();
+			assertThat(password).isEqualTo(expectedPassword);
+		}));
+	}
+
+	@Configuration
+	@EnableWebFluxSecurity
+	@EnableConfigurationProperties(SecurityProperties.class)
+	protected static class TestSecurityConfiguration {
+
+	}
+
+	@Configuration
+	@Import(TestSecurityConfiguration.class)
+	protected static class TestConfigWithPasswordEncoder {
+
+		@Bean
+		public PasswordEncoder passwordEncoder() {
+			return mock(PasswordEncoder.class);
+		}
+
+	}
+
+}