diff --git a/tests/src/python/CMakeLists.txt b/tests/src/python/CMakeLists.txt
index a7481fe91729..33d18779f06f 100755
--- a/tests/src/python/CMakeLists.txt
+++ b/tests/src/python/CMakeLists.txt
@@ -181,6 +181,7 @@ ADD_PYTHON_TEST(PyQgsFileDownloader test_qgsfiledownloader.py)
 ADD_PYTHON_TEST(PyQgsSettings test_qgssettings.py)
 ADD_PYTHON_TEST(PyQgsZipUtils test_qgsziputils.py)
 ADD_PYTHON_TEST(PyQgsSourceSelectProvider test_qgssourceselectprovider.py)
+ADD_PYTHON_TEST(PyQgsAuthManagerProxy test_authmanager_proxy.py)
 
 IF (NOT WIN32)
   ADD_PYTHON_TEST(PyQgsLogger test_qgslogger.py)
diff --git a/tests/src/python/test_authmanager_proxy.py b/tests/src/python/test_authmanager_proxy.py
new file mode 100644
index 000000000000..b3bd93c545dd
--- /dev/null
+++ b/tests/src/python/test_authmanager_proxy.py
@@ -0,0 +1,106 @@
+# -*- coding: utf-8 -*-
+"""
+Tests for auth manager Basic configuration update proxy
+
+From build dir, run from test directory:
+LC_ALL=en_US.UTF-8 ctest -R PyQgsAuthManagerProxy -V
+
+.. note:: This program is free software; you can redistribute it and/or modify
+it under the terms of the GNU General Public License as published by
+the Free Software Foundation; either version 2 of the License, or
+(at your option) any later version.
+"""
+import os
+import re
+import string
+import sys
+from functools import partial
+from shutil import rmtree
+import tempfile
+import random
+
+from qgis.core import QgsAuthManager, QgsAuthMethodConfig, QgsNetworkAccessManager, QgsSettings
+from qgis.testing import start_app, unittest
+
+from utilities import unitTestDataPath, waitServer
+
+__author__ = 'Alessandro Pasotti'
+__date__ = '27/09/2017'
+__copyright__ = 'Copyright 2017, The QGIS Project'
+# This will get replaced with a git SHA1 when you do a git archive
+__revision__ = '$Format:%H$'
+
+
+QGIS_AUTH_DB_DIR_PATH = tempfile.mkdtemp()
+
+os.environ['QGIS_AUTH_DB_DIR_PATH'] = QGIS_AUTH_DB_DIR_PATH
+
+qgis_app = start_app()
+
+
+class TestAuthManager(unittest.TestCase):
+
+    @classmethod
+    def setUpClass(cls):
+        """Run before all tests:
+        Creates an auth configuration"""
+        cls.testdata_path = unitTestDataPath('qgis_server') + '/'
+        # Enable auth
+        # os.environ['QGIS_AUTH_PASSWORD_FILE'] = QGIS_AUTH_PASSWORD_FILE
+        authm = QgsAuthManager.instance()
+        assert (authm.setMasterPassword('masterpassword', True))
+        cls.auth_config = QgsAuthMethodConfig('Basic')
+        cls.auth_config.setName('test_auth_config')
+        cls.username = ''.join(random.choice(string.ascii_uppercase + string.digits) for _ in range(6))
+        cls.password = cls.username[::-1]  # reversed
+        cls.auth_config.setConfig('username', cls.username)
+        cls.auth_config.setConfig('password', cls.password)
+        assert (authm.storeAuthenticationConfig(cls.auth_config)[0])
+
+    @classmethod
+    def tearDownClass(cls):
+        """Run after all tests"""
+        rmtree(QGIS_AUTH_DB_DIR_PATH)
+
+    def setUp(self):
+        """Run before each test."""
+        pass
+
+    def tearDown(self):
+        """Run after each test."""
+        pass
+
+    def testProxyIsUpdated(self):
+        """
+        Test that proxy is updated
+        """
+        authm = QgsAuthManager.instance()
+        nam = QgsNetworkAccessManager.instance()
+        proxy = nam.proxy()
+        self.assertEqual(proxy.password(), '')
+        self.assertEqual(proxy.user(), '')
+        self.assertTrue(authm.updateNetworkProxy(proxy, self.auth_config.id()))
+        self.assertEqual(proxy.user(), self.username)
+        self.assertEqual(proxy.password(), self.password)
+
+    def testProxyIsUpdatedByUserSettings(self):
+        """
+        Test that proxy is updated
+        """
+        nam = QgsNetworkAccessManager.instance()
+        nam.setupDefaultProxyAndCache()
+        proxy = nam.proxy()
+        self.assertEqual(proxy.password(), '')
+        self.assertEqual(proxy.user(), '')
+        settings = QgsSettings()
+        settings.setValue("proxy/authcfg", self.auth_config.id())
+        settings.setValue("proxy/proxyEnabled", True)
+        del(settings)
+        nam.setupDefaultProxyAndCache()
+        proxy = nam.fallbackProxy()
+        self.assertEqual(proxy.password(), self.password)
+        self.assertEqual(proxy.user(), self.username)
+
+
+if __name__ == '__main__':
+    unittest.main()