diff --git a/novaclient/shell.py b/novaclient/shell.py
index 3d38ac99d..cf94e3587 100644
--- a/novaclient/shell.py
+++ b/novaclient/shell.py
@@ -767,6 +767,16 @@ class OpenStackComputeShell(object):
         os_auth_url = args.os_auth_url
         os_region_name = args.os_region_name
         os_auth_system = args.os_auth_system
+
+        if "v2.0" not in os_auth_url:
+            # NOTE(andreykurilin): assume that keystone V3 is used and try to
+            # be more user-friendly, i.e provide default values for domains
+            if (not args.os_project_domain_id and
+                    not args.os_project_domain_name):
+                setattr(args, "os_project_domain_id", "default")
+            if not args.os_user_domain_id and not args.os_user_domain_name:
+                setattr(args, "os_user_domain_id", "default")
+
         endpoint_type = args.endpoint_type
         insecure = args.insecure
         service_type = args.service_type
diff --git a/novaclient/tests/functional/test_auth.py b/novaclient/tests/functional/test_auth.py
new file mode 100644
index 000000000..e37fc789e
--- /dev/null
+++ b/novaclient/tests/functional/test_auth.py
@@ -0,0 +1,42 @@
+# 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.
+
+from six.moves.urllib import parse
+import tempest_lib.cli.base
+
+from novaclient.tests.functional import base
+
+
+class TestAuthentication(base.ClientTestBase):
+    def nova(self, action, identity_api_version):
+        url = parse.urlparse(self.cli_clients.uri)
+        url = parse.urlunparse((url.scheme, url.netloc,
+                                '/v%s' % identity_api_version,
+                                url.params, url.query,
+                                url.fragment))
+        flags = ('--os-username %s --os-tenant-name %s --os-password %s '
+                 '--os-auth-url %s --endpoint-type publicURL' % (
+                     self.cli_clients.username,
+                     self.cli_clients.tenant_name,
+                     self.cli_clients.password,
+                     url))
+        if self.cli_clients.insecure:
+            flags += ' --insecure '
+
+        return tempest_lib.cli.base.execute(
+            "nova", action, flags, cli_dir=self.cli_clients.cli_dir)
+
+    def test_auth_via_keystone_v2(self):
+        self.nova("list", identity_api_version="2.0")
+
+    def test_auth_via_keystone_v3(self):
+        self.nova("list", identity_api_version="3")