diff --git a/app/controllers/api/projects.php b/app/controllers/api/projects.php
index 80d407322e..e0f8013467 100644
--- a/app/controllers/api/projects.php
+++ b/app/controllers/api/projects.php
@@ -2071,8 +2071,14 @@ App::patch('/v1/projects/:projectId/smtp')
 
         // validate SMTP settings
         if ($enabled) {
+            if (empty($username)) {
+                throw new Exception(Exception::GENERAL_ARGUMENT_INVALID, 'SMTP Username is required when enabling SMTP.');
+            } elseif (empty($password)) {
+                throw new Exception(Exception::GENERAL_ARGUMENT_INVALID, 'SMTP Password is required when enabling SMTP.');
+            }
             $mail = new PHPMailer(true);
             $mail->isSMTP();
+            $mail->SMTPAuth = true;
             $mail->Username = $username;
             $mail->Password = $password;
             $mail->Host = $host;
diff --git a/tests/e2e/Services/Projects/ProjectsConsoleClientTest.php b/tests/e2e/Services/Projects/ProjectsConsoleClientTest.php
index e297757225..7e81ca9db0 100644
--- a/tests/e2e/Services/Projects/ProjectsConsoleClientTest.php
+++ b/tests/e2e/Services/Projects/ProjectsConsoleClientTest.php
@@ -564,6 +564,8 @@ class ProjectsConsoleClientTest extends Scope
     public function testUpdateProjectSMTP($data): array
     {
         $id = $data['projectId'];
+        
+        /**Test for SUCCESS: Valid Credentials*/
         $response = $this->client->call(Client::METHOD_PATCH, '/projects/' . $id . '/smtp', array_merge([
             'content-type' => 'application/json',
             'x-appwrite-project' => $this->getProject()['$id'],
@@ -603,6 +605,24 @@ class ProjectsConsoleClientTest extends Scope
         $this->assertEquals('password', $response['body']['smtpPassword']);
         $this->assertEquals('', $response['body']['smtpSecure']);
 
+        /**  Test for Missing or Invalid Credentials*/
+        $response = $this->client->call(Client::METHOD_PATCH, '/projects/' . $id . '/smtp', array_merge([
+            'content-type' => 'application/json',
+            'x-appwrite-project' => $this->getProject()['$id'],
+        ], $this->getHeaders()), [
+            'enabled' => true,
+            'senderEmail' => 'fail@appwrite.io',
+            'senderName' => 'Failing Mailer',
+            'host' => 'maildev',
+            'port' => 1025,
+            'username' => 'invalid-user',
+            'password' => 'bad-password',
+        ]);
+        
+        $this->assertEquals(400, $response['headers']['status-code']);
+        $this->assertEquals(Exception::PROJECT_SMTP_CONFIG_INVALID, $response['body']['type']);
+        $this->assertStringContainsStringIgnoringCase('SMTP authentication failed.', $response['body']['message']);
+
         return $data;
     }