diff --git a/lib/supabase/PasswordUpdate.test.tsx b/lib/supabase/PasswordUpdate.test.tsx
index 8a24b77..892f562 100644
--- a/lib/supabase/PasswordUpdate.test.tsx
+++ b/lib/supabase/PasswordUpdate.test.tsx
@@ -15,16 +15,23 @@ describe("PasswordUpdate", () => {
     expect(container).toBeEmptyDOMElement();
   });
 
-  it("renders password form when user is logged in", () => {
+  it("hides the password form until Set/Change is clicked", async () => {
+    const user = userEvent.setup();
     render(
       <MockSupabaseProvider user={{ email: "test@example.com" }}>
         <PasswordUpdate />
       </MockSupabaseProvider>,
     );
 
+    expect(screen.queryByPlaceholderText("New password")).not.toBeInTheDocument();
+    expect(screen.queryByPlaceholderText("Confirm new password")).not.toBeInTheDocument();
+
+    await user.click(screen.getByRole("button", { name: /set\/change password/i }));
+
     expect(screen.getByPlaceholderText("New password")).toBeInTheDocument();
     expect(screen.getByPlaceholderText("Confirm new password")).toBeInTheDocument();
-    expect(screen.getByRole("button", { name: /set password/i })).toBeInTheDocument();
+    expect(screen.getByRole("button", { name: /^set password$/i })).toBeInTheDocument();
+    expect(screen.getByRole("button", { name: /cancel/i })).toBeInTheDocument();
   });
 
   it("shows error when passwords do not match", async () => {
@@ -35,10 +42,32 @@ describe("PasswordUpdate", () => {
       </MockSupabaseProvider>,
     );
 
+    await user.click(screen.getByRole("button", { name: /set\/change password/i }));
     await user.type(screen.getByPlaceholderText("New password"), "newpass123");
     await user.type(screen.getByPlaceholderText("Confirm new password"), "different");
-    await user.click(screen.getByRole("button", { name: /set password/i }));
+    await user.click(screen.getByRole("button", { name: /^set password$/i }));
 
     expect(screen.getByText(/passwords do not match/i)).toBeInTheDocument();
   });
+
+  it("Cancel collapses the form and clears the fields", async () => {
+    const user = userEvent.setup();
+    render(
+      <MockSupabaseProvider user={{ email: "test@example.com" }}>
+        <PasswordUpdate />
+      </MockSupabaseProvider>,
+    );
+
+    await user.click(screen.getByRole("button", { name: /set\/change password/i }));
+    await user.type(screen.getByPlaceholderText("New password"), "newpass123");
+    await user.type(screen.getByPlaceholderText("Confirm new password"), "newpass123");
+    await user.click(screen.getByRole("button", { name: /cancel/i }));
+
+    expect(screen.queryByPlaceholderText("New password")).not.toBeInTheDocument();
+    expect(screen.queryByPlaceholderText("Confirm new password")).not.toBeInTheDocument();
+
+    await user.click(screen.getByRole("button", { name: /set\/change password/i }));
+    expect(screen.getByPlaceholderText("New password")).toHaveValue("");
+    expect(screen.getByPlaceholderText("Confirm new password")).toHaveValue("");
+  });
 });
diff --git a/lib/supabase/PasswordUpdate.tsx b/lib/supabase/PasswordUpdate.tsx
index 9f21efa..9e9d627 100644
--- a/lib/supabase/PasswordUpdate.tsx
+++ b/lib/supabase/PasswordUpdate.tsx
@@ -17,9 +17,17 @@ export function PasswordUpdate({ className }: PasswordUpdateProps) {
   const [error, setError] = useState<string | null>(null);
   const [success, setSuccess] = useState(false);
   const [isSubmitting, setIsSubmitting] = useState(false);
+  const [isEditing, setIsEditing] = useState(false);
 
   if (!user) return null;
 
+  function handleCancel() {
+    setIsEditing(false);
+    setPassword("");
+    setConfirmPassword("");
+    setError(null);
+  }
+
   async function handleSubmit(e: FormEvent) {
     e.preventDefault();
     setError(null);
@@ -37,6 +45,7 @@ export function PasswordUpdate({ className }: PasswordUpdateProps) {
       setPassword("");
       setConfirmPassword("");
       setSuccess(true);
+      setIsEditing(false);
     } catch (err) {
       setError(err instanceof Error ? err.message : "An error occurred");
     } finally {
@@ -63,27 +72,38 @@ export function PasswordUpdate({ className }: PasswordUpdateProps) {
         </Alert>
       )}
 
-      <form onSubmit={handleSubmit} className="flex flex-col gap-3">
-        <Input
-          type="password"
-          placeholder="New password"
-          value={password}
-          onChange={(e) => setPassword(e.target.value)}
-          required
-          minLength={6}
-        />
-        <Input
-          type="password"
-          placeholder="Confirm new password"
-          value={confirmPassword}
-          onChange={(e) => setConfirmPassword(e.target.value)}
-          required
-          minLength={6}
-        />
-        <Button type="submit" disabled={isSubmitting} variant="secondary">
-          {isSubmitting ? "Updating..." : "Set password"}
+      {!isEditing ? (
+        <Button type="button" variant="secondary" onClick={() => setIsEditing(true)}>
+          Set/Change password
         </Button>
-      </form>
+      ) : (
+        <form onSubmit={handleSubmit} className="flex flex-col gap-3">
+          <Input
+            type="password"
+            placeholder="New password"
+            value={password}
+            onChange={(e) => setPassword(e.target.value)}
+            required
+            minLength={6}
+          />
+          <Input
+            type="password"
+            placeholder="Confirm new password"
+            value={confirmPassword}
+            onChange={(e) => setConfirmPassword(e.target.value)}
+            required
+            minLength={6}
+          />
+          <div className="flex gap-2">
+            <Button type="submit" disabled={isSubmitting} variant="secondary">
+              {isSubmitting ? "Updating..." : "Set password"}
+            </Button>
+            <Button type="button" variant="ghost" onClick={handleCancel} disabled={isSubmitting}>
+              Cancel
+            </Button>
+          </div>
+        </form>
+      )}
     </div>
   );
 }