diff --git a/README.md b/README.md
index 6202d33..5da95fc 100644
--- a/README.md
+++ b/README.md
@@ -589,6 +589,25 @@ $ ls -la /var/lib/hass/secrets.yaml
 lrwxrwxrwx 1 root root 40 Jul 19 22:36 /var/lib/hass/secrets.yaml -> /run/secrets/home-assistant-secrets.yaml
 ```
 
+## Setting a user's password
+
+sops-nix has to run after users were created by NixOS.
+This means that it's not possible to set `users.users.<name>.passwordFile` to any secrets managed by sops-nix.
+To work around this issue, it's possible to set `neededForUsers = true` in a secret.
+This will cause the secret to be decrypted to `/run/secrets-for-users` instead of `/run/secrets` before NixOS creates the users.
+As users are not created yet, it's not possible to set an owner for these secrets.
+
+```nix
+{ config, ... }: {
+  sops.secrets.my-password.neededForUsers = true;
+
+  users.users.mic92 = {
+    isNormalUser = true;
+    passwordFile = config.sops.secrets.my-password.path;
+  };
+}
+```
+
 ## Different file formats
 
 At the moment we support the following file formats: YAML, JSON, binary
diff --git a/modules/sops/default.nix b/modules/sops/default.nix
index 889cb03..f0d0fd3 100644
--- a/modules/sops/default.nix
+++ b/modules/sops/default.nix
@@ -5,6 +5,9 @@ with lib;
 let
   cfg = config.sops;
   users = config.users.users;
+  sops-install-secrets = (pkgs.callPackage ../.. {}).sops-install-secrets;
+  regularSecrets = lib.filterAttrs (_: v: !v.neededForUsers) cfg.secrets;
+  secretsForUsers = lib.filterAttrs (_: v: v.neededForUsers) cfg.secrets;
   secretType = types.submodule ({ config, ... }: {
     config = {
       sopsFile = lib.mkOptionDefault cfg.defaultSopsFile;
@@ -29,7 +32,8 @@ let
       };
       path = mkOption {
         type = types.str;
-        default = "/run/secrets/${config.name}";
+        default = if config.neededForUsers then "/run/secrets-for-users/${config.name}" else "/run/secrets/${config.name}";
+        defaultText = "/run/secrets-for-users/$name when neededForUsers is set, /run/secrets/$name when otherwise.";
         description = ''
           Path where secrets are symlinked to.
           If the default is kept no symlink is created.
@@ -87,31 +91,45 @@ let
           This works the same way as <xref linkend="opt-systemd.services._name_.restartTriggers" />.
         '';
       };
-    };
-  });
-  manifest = pkgs.writeText "manifest.json" (builtins.toJSON {
-    secrets = builtins.attrValues cfg.secrets;
-    # Does this need to be configurable?
-    secretsMountPoint = "/run/secrets.d";
-    symlinkPath = "/run/secrets";
-    gnupgHome = cfg.gnupg.home;
-    sshKeyPaths = cfg.gnupg.sshKeyPaths;
-    ageKeyFile = cfg.age.keyFile;
-    ageSshKeyPaths = cfg.age.sshKeyPaths;
-    logging = {
-      keyImport = builtins.elem "keyImport" cfg.log;
-      secretChanges = builtins.elem "secretChanges" cfg.log;
+      neededForUsers = mkOption {
+        type = types.bool;
+        default = false;
+        description = ''
+          Enabling this option causes the secret to be decrypted before users and groups are created.
+          This can be used to retrieve user's passwords from sops-nix.
+          Setting this option moves the secret to /run/secrets-for-users and disallows setting owner and group to anything else than root.
+        '';
+      };
     };
   });
 
-  checkedManifest = let
-    sops-install-secrets = (pkgs.buildPackages.callPackage ../.. {}).sops-install-secrets;
-  in pkgs.runCommand "checked-manifest.json" {
-    nativeBuildInputs = [ sops-install-secrets ];
-  } ''
-    sops-install-secrets -check-mode=${if cfg.validateSopsFiles then "sopsfile" else "manifest"} ${manifest}
-    cp ${manifest} $out
-  '';
+  manifestFor = suffix: secrets: extraJson: pkgs.writeTextFile {
+    name = "manifest${suffix}.json";
+    text = builtins.toJSON ({
+      secrets = builtins.attrValues secrets;
+      # Does this need to be configurable?
+      secretsMountPoint = "/run/secrets.d";
+      symlinkPath = "/run/secrets";
+      gnupgHome = cfg.gnupg.home;
+      sshKeyPaths = cfg.gnupg.sshKeyPaths;
+      ageKeyFile = cfg.age.keyFile;
+      ageSshKeyPaths = cfg.age.sshKeyPaths;
+      logging = {
+        keyImport = builtins.elem "keyImport" cfg.log;
+        secretChanges = builtins.elem "secretChanges" cfg.log;
+      };
+    } // extraJson);
+    checkPhase = ''
+      ${sops-install-secrets}/bin/sops-install-secrets -check-mode=${if cfg.validateSopsFiles then "sopsfile" else "manifest"} "$out"
+    '';
+  };
+
+  manifest = manifestFor "" regularSecrets {};
+  manifestForUsers = manifestFor "-for-users" secretsForUsers {
+    secretsMountPoint = "/run/secrets.d/users";
+    symlinkPath = "/run/secrets-for-users";
+  };
+
 in {
   options.sops = {
     secrets = mkOption {
@@ -214,6 +232,9 @@ in {
     } {
       assertion = !(cfg.gnupg.home != null && cfg.gnupg.sshKeyPaths != []);
       message = "Exactly one of sops.gnupg.home and sops.gnupg.sshKeyPaths must be set";
+    } {
+      assertion = (filterAttrs (_: v: v.owner != "root" || v.group != "root") secretsForUsers) == {};
+      message = "neededForUsers cannot be used for secrets that are not root-owned";
     }] ++ optionals cfg.validateSopsFiles (
       concatLists (mapAttrsToList (name: secret: [{
         assertion = builtins.pathExists secret.sopsFile;
@@ -226,22 +247,33 @@ in {
       }]) cfg.secrets)
     );
 
-    system.activationScripts.setup-secrets = let
-      sops-install-secrets = (pkgs.callPackage ../.. {}).sops-install-secrets;
-    in (stringAfter ([ "specialfs" "users" "groups" ] ++ optional cfg.age.generateKey "generate-age-key") ''
-      [ -e /run/current-system ] || echo setting up secrets...
-      ${optionalString (cfg.gnupg.home != null) "SOPS_GPG_EXEC=${pkgs.gnupg}/bin/gpg"} ${sops-install-secrets}/bin/sops-install-secrets ${checkedManifest}
-    '') // lib.optionalAttrs (config.system ? dryActivationScript) {
-      supportsDryActivation = true;
-    };
+    system.activationScripts = {
+      setupSecretsForUsers = mkIf (secretsForUsers != {}) (stringAfter ([ "specialfs" ] ++ optional cfg.age.generateKey "generate-age-key") ''
+        [ -e /run/current-system ] || echo setting up secrets for users...
+        ${optionalString (cfg.gnupg.home != null) "SOPS_GPG_EXEC=${pkgs.gnupg}/bin/gpg"} ${sops-install-secrets}/bin/sops-install-secrets -ignore-passwd ${manifestForUsers}
+      '' // lib.optionalAttrs (config.system ? dryActivationScript) {
+        supportsDryActivation = true;
+      });
 
-    system.activationScripts.generate-age-key = (mkIf cfg.age.generateKey) (stringAfter [] ''
-      if [[ ! -f '${cfg.age.keyFile}' ]]; then
-        echo generating machine-specific age key...
-        mkdir -p $(dirname ${cfg.age.keyFile})
-        # age-keygen sets 0600 by default, no need to chmod.
-        ${pkgs.age}/bin/age-keygen -o ${cfg.age.keyFile}
-      fi
-    '');
+      users = mkIf (secretsForUsers != {}) {
+        deps = [ "setupSecretsForUsers" ];
+      };
+
+      setupSecrets = mkIf (regularSecrets != {}) (stringAfter ([ "specialfs" "users" "groups" ] ++ optional cfg.age.generateKey "generate-age-key") ''
+        [ -e /run/current-system ] || echo setting up secrets...
+        ${optionalString (cfg.gnupg.home != null) "SOPS_GPG_EXEC=${pkgs.gnupg}/bin/gpg"} ${sops-install-secrets}/bin/sops-install-secrets ${manifest}
+      '' // lib.optionalAttrs (config.system ? dryActivationScript) {
+        supportsDryActivation = true;
+      });
+
+      generate-age-key = mkIf (cfg.age.generateKey) (stringAfter [] ''
+        if [[ ! -f '${cfg.age.keyFile}' ]]; then
+          echo generating machine-specific age key...
+          mkdir -p $(dirname ${cfg.age.keyFile})
+          # age-keygen sets 0600 by default, no need to chmod.
+          ${pkgs.age}/bin/age-keygen -o ${cfg.age.keyFile}
+        fi
+      '');
+    };
   };
 }
diff --git a/pkgs/sops-install-secrets/main.go b/pkgs/sops-install-secrets/main.go
index 7c46ffa..2949c5e 100644
--- a/pkgs/sops-install-secrets/main.go
+++ b/pkgs/sops-install-secrets/main.go
@@ -102,14 +102,16 @@ const (
 )
 
 type options struct {
-	checkMode CheckMode
-	manifest  string
+	checkMode    CheckMode
+	manifest     string
+	ignorePasswd bool
 }
 
 type appContext struct {
-	manifest    manifest
-	secretFiles map[string]secretFile
-	checkMode   CheckMode
+	manifest     manifest
+	secretFiles  map[string]secretFile
+	checkMode    CheckMode
+	ignorePasswd bool
 }
 
 func secureSymlinkChown(symlinkToCheck, expectedTarget string, owner, group int) error {
@@ -451,7 +453,10 @@ func (app *appContext) validateSecret(secret *secret) error {
 	}
 	secret.mode = os.FileMode(mode)
 
-	if app.checkMode == Off {
+	if app.ignorePasswd {
+		secret.owner = 0
+		secret.group = 0
+	} else if app.checkMode == Off {
 		// we only access to the user/group during deployment
 		owner, err := user.Lookup(secret.Owner)
 		if err != nil {
@@ -785,6 +790,7 @@ func parseFlags(args []string) (*options, error) {
 	}
 	var checkMode string
 	fs.StringVar(&checkMode, "check-mode", "off", `Validate configuration without installing it (possible values: "manifest","sopsfile","off")`)
+	fs.BoolVar(&opts.ignorePasswd, "ignore-passwd", false, `Don't look up anything in /etc/passwd. Causes everything to be owned by root:root`)
 	if err := fs.Parse(args[1:]); err != nil {
 		return nil, err
 	}
@@ -816,9 +822,10 @@ func installSecrets(args []string) error {
 	}
 
 	app := appContext{
-		manifest:    *manifest,
-		checkMode:   opts.checkMode,
-		secretFiles: make(map[string]secretFile),
+		manifest:     *manifest,
+		checkMode:    opts.checkMode,
+		ignorePasswd: opts.ignorePasswd,
+		secretFiles:  make(map[string]secretFile),
 	}
 
 	if err := app.validateManifest(); err != nil {
@@ -829,9 +836,14 @@ func installSecrets(args []string) error {
 		return nil
 	}
 
-	keysGid, err := lookupKeysGroup()
-	if err != nil {
-		return err
+	var keysGid int
+	if opts.ignorePasswd {
+		keysGid = 0
+	} else {
+		keysGid, err = lookupKeysGroup()
+		if err != nil {
+			return err
+		}
 	}
 
 	isDry := os.Getenv("NIXOS_ACTION") == "dry-activate"
diff --git a/pkgs/sops-install-secrets/nixos-test.nix b/pkgs/sops-install-secrets/nixos-test.nix
index 5f60dd9..228dafe 100644
--- a/pkgs/sops-install-secrets/nixos-test.nix
+++ b/pkgs/sops-install-secrets/nixos-test.nix
@@ -23,6 +23,34 @@
    inherit (pkgs) system;
  };
 
+  user-passwords = makeTest {
+    name = "sops-user-passwords";
+    machine = {
+      imports = [ ../../modules/sops ];
+      sops = {
+        age.keyFile = ./test-assets/age-keys.txt;
+        defaultSopsFile = ./test-assets/secrets.yaml;
+        secrets.test_key.neededForUsers = true;
+        secrets."nested/test/file".owner = "example-user";
+      };
+
+      users.users.example-user = {
+        isNormalUser = true;
+        passwordFile = "/run/secrets-for-users/test_key";
+      };
+    };
+
+    testScript = ''
+      start_all()
+      machine.succeed("getent shadow example-user | grep -q :test_value:")  # password was set
+      machine.succeed("cat /run/secrets/nested/test/file | grep -q 'another value'")  # regular secrets work...
+      machine.succeed("[ $(stat -c%U /run/secrets/nested/test/file) = example-user ]")  # ...and are owned
+    '';
+  } {
+    inherit pkgs;
+    inherit (pkgs) system;
+  };
+
  age-keys = makeTest {
    name = "sops-age-keys";
    machine = {