diff --git a/.changeset/solid-goats-shop.md b/.changeset/solid-goats-shop.md
new file mode 100644
index 00000000..eb1987d6
--- /dev/null
+++ b/.changeset/solid-goats-shop.md
@@ -0,0 +1,6 @@
+---
+"@clack/prompts": minor
+"@clack/core": minor
+---
+
+Add `clearOnError` option to password prompt to automatically clear input when validation fails
diff --git a/packages/core/src/prompts/password.ts b/packages/core/src/prompts/password.ts
index c27cde8d..a9864577 100644
--- a/packages/core/src/prompts/password.ts
+++ b/packages/core/src/prompts/password.ts
@@ -25,6 +25,9 @@ export default class PasswordPrompt extends Prompt<string> {
 		const s2 = masked.slice(this.cursor);
 		return `${s1}${color.inverse(s2[0])}${s2.slice(1)}`;
 	}
+	clear() {
+		this._clearUserInput();
+	}
 	constructor({ mask, ...opts }: PasswordOptions) {
 		super(opts);
 		this._mask = mask ?? '•';
diff --git a/packages/core/src/prompts/prompt.ts b/packages/core/src/prompts/prompt.ts
index 1803ebc6..f2720f5a 100644
--- a/packages/core/src/prompts/prompt.ts
+++ b/packages/core/src/prompts/prompt.ts
@@ -186,6 +186,11 @@ export default class Prompt<TValue> {
 		}
 	}
 
+	protected _clearUserInput(): void {
+		this.rl?.write(null, { ctrl: true, name: 'u' });
+		this._setUserInput('');
+	}
+
 	private onKeypress(char: string | undefined, key: Key) {
 		if (this._track && key.name !== 'return') {
 			if (key.name && this._isActionKey(char, key)) {
diff --git a/packages/prompts/src/password.ts b/packages/prompts/src/password.ts
index efdc4ef6..8010960b 100644
--- a/packages/prompts/src/password.ts
+++ b/packages/prompts/src/password.ts
@@ -6,6 +6,7 @@ export interface PasswordOptions extends CommonOptions {
 	message: string;
 	mask?: string;
 	validate?: (value: string | undefined) => string | Error | undefined;
+	clearOnError?: boolean;
 }
 export const password = (opts: PasswordOptions) => {
 	return new PasswordPrompt({
@@ -22,6 +23,9 @@ export const password = (opts: PasswordOptions) => {
 			switch (this.state) {
 				case 'error': {
 					const maskedText = masked ? `  ${masked}` : '';
+					if (opts.clearOnError) {
+						this.clear();
+					}
 					return `${title.trim()}\n${color.yellow(S_BAR)}${maskedText}\n${color.yellow(
 						S_BAR_END
 					)}  ${color.yellow(this.error)}\n`;
diff --git a/packages/prompts/test/__snapshots__/password.test.ts.snap b/packages/prompts/test/__snapshots__/password.test.ts.snap
index 1968a456..fbe7c7ca 100644
--- a/packages/prompts/test/__snapshots__/password.test.ts.snap
+++ b/packages/prompts/test/__snapshots__/password.test.ts.snap
@@ -14,6 +14,49 @@ exports[`password (isCI = false) > can be aborted by a signal 1`] = `
 ]
 `;
 
+exports[`password (isCI = false) > clears input on error when clearOnError is true 1`] = `
+[
+  "<cursor.hide>",
+  "│
+◆  foo
+│  _
+└
+",
+  "<cursor.backward count=999><cursor.up count=4>",
+  "<cursor.down count=2>",
+  "<erase.line><cursor.left count=1>",
+  "│  ▪_",
+  "<cursor.down count=2>",
+  "<cursor.backward count=999><cursor.up count=4>",
+  "<cursor.down count=1>",
+  "<erase.down>",
+  "▲  foo
+│  ▪
+└  Error
+",
+  "<cursor.backward count=999><cursor.up count=4>",
+  "<cursor.down count=1>",
+  "<erase.down>",
+  "◆  foo
+│  ▪_
+└
+",
+  "<cursor.backward count=999><cursor.up count=4>",
+  "<cursor.down count=2>",
+  "<erase.line><cursor.left count=1>",
+  "│  ▪▪_",
+  "<cursor.down count=2>",
+  "<cursor.backward count=999><cursor.up count=4>",
+  "<cursor.down count=1>",
+  "<erase.down>",
+  "◇  foo
+│  ▪▪",
+  "
+",
+  "<cursor.show>",
+]
+`;
+
 exports[`password (isCI = false) > renders and clears validation errors 1`] = `
 [
   "<cursor.hide>",
@@ -168,6 +211,49 @@ exports[`password (isCI = true) > can be aborted by a signal 1`] = `
 ]
 `;
 
+exports[`password (isCI = true) > clears input on error when clearOnError is true 1`] = `
+[
+  "<cursor.hide>",
+  "│
+◆  foo
+│  _
+└
+",
+  "<cursor.backward count=999><cursor.up count=4>",
+  "<cursor.down count=2>",
+  "<erase.line><cursor.left count=1>",
+  "│  ▪_",
+  "<cursor.down count=2>",
+  "<cursor.backward count=999><cursor.up count=4>",
+  "<cursor.down count=1>",
+  "<erase.down>",
+  "▲  foo
+│  ▪
+└  Error
+",
+  "<cursor.backward count=999><cursor.up count=4>",
+  "<cursor.down count=1>",
+  "<erase.down>",
+  "◆  foo
+│  ▪_
+└
+",
+  "<cursor.backward count=999><cursor.up count=4>",
+  "<cursor.down count=2>",
+  "<erase.line><cursor.left count=1>",
+  "│  ▪▪_",
+  "<cursor.down count=2>",
+  "<cursor.backward count=999><cursor.up count=4>",
+  "<cursor.down count=1>",
+  "<erase.down>",
+  "◇  foo
+│  ▪▪",
+  "
+",
+  "<cursor.show>",
+]
+`;
+
 exports[`password (isCI = true) > renders and clears validation errors 1`] = `
 [
   "<cursor.hide>",
diff --git a/packages/prompts/test/password.test.ts b/packages/prompts/test/password.test.ts
index 9c8c9b7e..3d118f83 100644
--- a/packages/prompts/test/password.test.ts
+++ b/packages/prompts/test/password.test.ts
@@ -92,8 +92,9 @@ describe.each(['true', 'false'])('password (isCI = %s)', (isCI) => {
 		input.emit('keypress', 'y', { name: 'y' });
 		input.emit('keypress', '', { name: 'return' });
 
-		await result;
+		const value = await result;
 
+		expect(value).toBe('xy');
 		expect(output.buffer).toMatchSnapshot();
 	});
 
@@ -127,4 +128,25 @@ describe.each(['true', 'false'])('password (isCI = %s)', (isCI) => {
 		expect(prompts.isCancel(value)).toBe(true);
 		expect(output.buffer).toMatchSnapshot();
 	});
+
+	test('clears input on error when clearOnError is true', async () => {
+		const result = prompts.password({
+			message: 'foo',
+			input,
+			output,
+			validate: (v) => (v === 'yz' ? undefined : 'Error'),
+			clearOnError: true,
+		});
+
+		input.emit('keypress', 'x', { name: 'x' });
+		input.emit('keypress', '', { name: 'return' });
+		input.emit('keypress', 'y', { name: 'y' });
+		input.emit('keypress', 'z', { name: 'z' });
+		input.emit('keypress', '', { name: 'return' });
+
+		const value = await result;
+
+		expect(value).toBe('yz');
+		expect(output.buffer).toMatchSnapshot();
+	});
 });