diff --git a/instack_undercloud/tests/test_undercloud.py b/instack_undercloud/tests/test_undercloud.py
index ac4bbba9e..291a01e0a 100644
--- a/instack_undercloud/tests/test_undercloud.py
+++ b/instack_undercloud/tests/test_undercloud.py
@@ -28,6 +28,7 @@ from oslotest import mockpatch
 from six.moves import configparser
 
 from instack_undercloud import undercloud
+from instack_undercloud import validator
 
 
 undercloud._configure_logging(undercloud.DEFAULT_LOG_LEVEL, None)
@@ -81,10 +82,13 @@ class TestUndercloud(BaseTestCase):
     @mock.patch('instack_undercloud.undercloud._check_memory')
     @mock.patch('instack_undercloud.undercloud._check_sysctl')
     @mock.patch('instack_undercloud.undercloud._validate_network')
-    def test_validate_configuration(self, mock_validate_network,
+    @mock.patch('instack_undercloud.undercloud._validate_passwords_file')
+    def test_validate_configuration(self, mock_vpf,
+                                    mock_validate_network,
                                     mock_check_memory, mock_check_hostname,
                                     mock_check_sysctl):
         undercloud._validate_configuration()
+        self.assertTrue(mock_vpf.called)
         self.assertTrue(mock_validate_network.called)
         self.assertTrue(mock_check_memory.called)
         self.assertTrue(mock_check_hostname.called)
@@ -199,6 +203,22 @@ class TestCheckSysctl(BaseTestCase):
         undercloud._check_sysctl()
 
 
+@mock.patch('os.path.isfile')
+class TestPasswordsFileExists(BaseTestCase):
+    def test_new_install(self, mock_isfile):
+        mock_isfile.side_effect = [False]
+        undercloud._validate_passwords_file()
+
+    def test_update_exists(self, mock_isfile):
+        mock_isfile.side_effect = [True, True]
+        undercloud._validate_passwords_file()
+
+    def test_update_missing(self, mock_isfile):
+        mock_isfile.side_effect = [True, False]
+        self.assertRaises(validator.FailedValidation,
+                          undercloud._validate_passwords_file)
+
+
 class TestGenerateEnvironment(BaseTestCase):
     def setUp(self):
         super(TestGenerateEnvironment, self).setUp()
diff --git a/instack_undercloud/undercloud.py b/instack_undercloud/undercloud.py
index 0afb8d9a9..747b091f4 100644
--- a/instack_undercloud/undercloud.py
+++ b/instack_undercloud/undercloud.py
@@ -630,12 +630,29 @@ def _validate_cidr():
         CONF.set_override('network_cidr', '192.0.2.0/24')
 
 
+def _validate_passwords_file():
+    """Disallow updates if the passwords file is missing
+
+    If the undercloud was already deployed, the passwords file needs to be
+    present so passwords that can't be changed are persisted.  If the file
+    is missing it will break the undercloud, so we should fail-fast and let
+    the user know about the problem.
+    """
+    if (os.path.isfile(os.path.expanduser('~/stackrc')) and
+            not os.path.isfile(PATHS.PASSWORD_PATH)):
+        message = ('The %s file is missing.  This will cause all service '
+                   'passwords to change and break the existing undercloud. ' %
+                   PATHS.PASSWORD_PATH)
+        raise validator.FailedValidation(message)
+
+
 def _validate_configuration():
     try:
         _check_hostname()
         _check_memory()
         _check_sysctl()
         _validate_network()
+        _validate_passwords_file()
     except RuntimeError as e:
         LOG.error('ERROR: An error occured during configuration validation, '
                   'please check your host configuration and try again. '