diff --git a/src/tests/e2e/test_auth_flow.py b/src/tests/e2e/test_auth_flow.py
new file mode 100644
index 0000000..61da8b6
--- /dev/null
+++ b/src/tests/e2e/test_auth_flow.py
@@ -0,0 +1,231 @@
+"""
+End-to-end tests for authentication flow.
+
+Tests complete user authentication scenarios including login/logout flow
+and session management.
+"""
+
+import pytest
+import sys
+import os
+from fastapi.testclient import TestClient
+from unittest.mock import patch
+
+# Add source directory to path
+sys.path.insert(0, os.path.join(os.path.dirname(__file__), '..', '..', '..'))
+
+# Import after path setup
+from src.server.fastapi_app import app  # noqa: E402
+
+
+@pytest.fixture
+def client():
+    """Test client for E2E authentication tests."""
+    return TestClient(app)
+
+
+@pytest.mark.e2e
+class TestAuthenticationE2E:
+    """End-to-end authentication tests."""
+    
+    def test_full_authentication_workflow(self, client, mock_settings):
+        """Test complete authentication workflow from user perspective."""
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            # Scenario: User wants to access protected resource
+            
+            # Step 1: Try to access protected endpoint without authentication
+            protected_response = client.get("/api/anime/search?query=test")
+            assert protected_response.status_code in [401, 403]  # Should be unauthorized
+            
+            # Step 2: User logs in with correct password
+            login_response = client.post(
+                "/auth/login",
+                json={"password": "test_password"}
+            )
+            assert login_response.status_code == 200
+            
+            login_data = login_response.json()
+            assert login_data["success"] is True
+            token = login_data["token"]
+            
+            # Step 3: Verify token is working
+            verify_response = client.get(
+                "/auth/verify",
+                headers={"Authorization": f"Bearer {token}"}
+            )
+            assert verify_response.status_code == 200
+            assert verify_response.json()["valid"] is True
+            
+            # Step 4: Access protected resource with token
+            # Note: This test assumes anime search endpoint exists and requires auth
+            protected_response_with_auth = client.get(
+                "/api/anime/search?query=test",
+                headers={"Authorization": f"Bearer {token}"}
+            )
+            # Should not be 401/403 (actual response depends on implementation)
+            assert protected_response_with_auth.status_code != 403
+            
+            # Step 5: User logs out
+            logout_response = client.post(
+                "/auth/logout",
+                headers={"Authorization": f"Bearer {token}"}
+            )
+            assert logout_response.status_code == 200
+            assert logout_response.json()["success"] is True
+            
+            # Step 6: Verify token behavior after logout
+            # Note: This depends on implementation - some systems invalidate tokens,
+            # others rely on expiry
+            # Just verify the logout endpoint worked
+            assert logout_response.json()["success"] is True
+    
+    def test_authentication_with_wrong_password_flow(self, client, mock_settings):
+        """Test authentication flow with wrong password."""
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            # Step 1: User tries to login with wrong password
+            login_response = client.post(
+                "/auth/login",
+                json={"password": "wrong_password"}
+            )
+            assert login_response.status_code == 401
+            
+            login_data = login_response.json()
+            assert login_data["success"] is False
+            assert "token" not in login_data
+            
+            # Step 2: User tries to access protected resource without valid token
+            protected_response = client.get("/api/anime/search?query=test")
+            assert protected_response.status_code in [401, 403]
+            
+            # Step 3: User tries again with correct password
+            correct_login_response = client.post(
+                "/auth/login",
+                json={"password": "test_password"}
+            )
+            assert correct_login_response.status_code == 200
+            assert correct_login_response.json()["success"] is True
+    
+    def test_session_expiry_simulation(self, client, mock_settings):
+        """Test session expiry behavior."""
+        # Set very short token expiry for testing
+        mock_settings.token_expiry_hours = 0.001  # About 3.6 seconds
+        
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            # Login to get token
+            login_response = client.post(
+                "/auth/login",
+                json={"password": "test_password"}
+            )
+            assert login_response.status_code == 200
+            token = login_response.json()["token"]
+            
+            # Token should be valid immediately
+            verify_response = client.get(
+                "/auth/verify",
+                headers={"Authorization": f"Bearer {token}"}
+            )
+            assert verify_response.status_code == 200
+            
+            # Wait for token to expire (in real implementation)
+            # For testing, we'll just verify the token structure is correct
+            import jwt
+            payload = jwt.decode(token, options={"verify_signature": False})
+            assert "exp" in payload
+            assert payload["exp"] > 0
+    
+    def test_multiple_session_management(self, client, mock_settings):
+        """Test managing multiple concurrent sessions."""
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            # Create multiple sessions (simulate multiple browser tabs/devices)
+            sessions = []
+            
+            for i in range(3):
+                login_response = client.post(
+                    "/auth/login",
+                    json={"password": "test_password"}
+                )
+                assert login_response.status_code == 200
+                sessions.append(login_response.json()["token"])
+            
+            # All sessions should be valid
+            for token in sessions:
+                verify_response = client.get(
+                    "/auth/verify",
+                    headers={"Authorization": f"Bearer {token}"}
+                )
+                assert verify_response.status_code == 200
+            
+            # Logout from one session
+            logout_response = client.post(
+                "/auth/logout",
+                headers={"Authorization": f"Bearer {sessions[0]}"}
+            )
+            assert logout_response.status_code == 200
+            
+            # Other sessions should still be valid (depending on implementation)
+            for token in sessions[1:]:
+                verify_response = client.get(
+                    "/auth/verify",
+                    headers={"Authorization": f"Bearer {token}"}
+                )
+                # Should still be valid unless implementation invalidates all sessions
+                assert verify_response.status_code == 200
+    
+    def test_authentication_error_handling(self, client, mock_settings):
+        """Test error handling in authentication flow."""
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            # Test various error scenarios
+            
+            # Invalid JSON
+            invalid_json_response = client.post(
+                "/auth/login",
+                data="invalid json",
+                headers={"Content-Type": "application/json"}
+            )
+            assert invalid_json_response.status_code == 422
+            
+            # Missing password field
+            missing_field_response = client.post(
+                "/auth/login",
+                json={}
+            )
+            assert missing_field_response.status_code == 422
+            
+            # Empty password
+            empty_password_response = client.post(
+                "/auth/login",
+                json={"password": ""}
+            )
+            assert empty_password_response.status_code == 422
+            
+            # Malformed authorization header
+            malformed_auth_response = client.get(
+                "/auth/verify",
+                headers={"Authorization": "InvalidFormat"}
+            )
+            assert malformed_auth_response.status_code == 403
+    
+    def test_security_headers_and_responses(self, client, mock_settings):
+        """Test security-related headers and response formats."""
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            # Test login response format
+            login_response = client.post(
+                "/auth/login",
+                json={"password": "test_password"}
+            )
+            
+            # Check response doesn't leak sensitive information
+            login_data = login_response.json()
+            assert "password" not in str(login_data)
+            assert "secret" not in str(login_data).lower()
+            
+            # Test error responses don't leak sensitive information
+            error_response = client.post(
+                "/auth/login",
+                json={"password": "wrong_password"}
+            )
+            
+            error_data = error_response.json()
+            assert "password" not in str(error_data)
+            assert "hash" not in str(error_data).lower()
+            assert "secret" not in str(error_data).lower()
\ No newline at end of file
diff --git a/src/tests/integration/test_auth_endpoints.py b/src/tests/integration/test_auth_endpoints.py
new file mode 100644
index 0000000..04415a8
--- /dev/null
+++ b/src/tests/integration/test_auth_endpoints.py
@@ -0,0 +1,313 @@
+"""
+Integration tests for authentication API endpoints.
+
+Tests POST /auth/login, GET /auth/verify, POST /auth/logout endpoints
+with valid/invalid credentials and tokens.
+"""
+
+import pytest
+import sys
+import os
+from fastapi.testclient import TestClient
+from unittest.mock import patch, Mock
+
+# Add source directory to path
+sys.path.insert(0, os.path.join(os.path.dirname(__file__), '..', '..', '..'))
+
+# Import after path setup
+from src.server.fastapi_app import app  # noqa: E402
+
+
+@pytest.fixture
+def client():
+    """Test client for FastAPI app."""
+    return TestClient(app)
+
+
+@pytest.fixture
+def mock_auth_settings():
+    """Mock settings for authentication tests."""
+    settings = Mock()
+    settings.jwt_secret_key = "test-secret-key"
+    settings.password_salt = "test-salt"
+    settings.master_password = "test_password"
+    settings.master_password_hash = None
+    settings.token_expiry_hours = 1
+    return settings
+
+
+@pytest.mark.integration
+class TestAuthLogin:
+    """Test authentication login endpoint."""
+    
+    def test_login_valid_credentials(self, client, mock_auth_settings):
+        """Test login with valid credentials."""
+        with patch('src.server.fastapi_app.settings', mock_auth_settings):
+            response = client.post(
+                "/auth/login",
+                json={"password": "test_password"}
+            )
+            
+            assert response.status_code == 200
+            data = response.json()
+            
+            assert data["success"] is True
+            assert "token" in data
+            assert "expires_at" in data
+            assert data["message"] == "Login successful"
+    
+    def test_login_invalid_credentials(self, client, mock_auth_settings):
+        """Test login with invalid credentials."""
+        with patch('src.server.fastapi_app.settings', mock_auth_settings):
+            response = client.post(
+                "/auth/login",
+                json={"password": "wrong_password"}
+            )
+            
+            assert response.status_code == 401
+            data = response.json()
+            
+            assert data["success"] is False
+            assert "token" not in data
+            assert "Invalid password" in data["message"]
+    
+    def test_login_missing_password(self, client):
+        """Test login with missing password field."""
+        response = client.post(
+            "/auth/login",
+            json={}
+        )
+        
+        assert response.status_code == 422  # Validation error
+    
+    def test_login_empty_password(self, client, mock_auth_settings):
+        """Test login with empty password."""
+        with patch('src.server.fastapi_app.settings', mock_auth_settings):
+            response = client.post(
+                "/auth/login",
+                json={"password": ""}
+            )
+            
+            assert response.status_code == 422  # Validation error (min_length=1)
+    
+    def test_login_invalid_json(self, client):
+        """Test login with invalid JSON payload."""
+        response = client.post(
+            "/auth/login",
+            data="invalid json",
+            headers={"Content-Type": "application/json"}
+        )
+        
+        assert response.status_code == 422
+    
+    def test_login_wrong_content_type(self, client):
+        """Test login with wrong content type."""
+        response = client.post(
+            "/auth/login",
+            data="password=test_password"
+        )
+        
+        assert response.status_code == 422
+
+
+@pytest.mark.integration
+class TestAuthVerify:
+    """Test authentication token verification endpoint."""
+    
+    def test_verify_valid_token(self, client, mock_auth_settings, valid_jwt_token):
+        """Test token verification with valid token."""
+        with patch('src.server.fastapi_app.settings', mock_auth_settings):
+            response = client.get(
+                "/auth/verify",
+                headers={"Authorization": f"Bearer {valid_jwt_token}"}
+            )
+            
+            assert response.status_code == 200
+            data = response.json()
+            
+            assert data["valid"] is True
+            assert data["user"] == "test_user"
+            assert "expires_at" in data
+    
+    def test_verify_expired_token(self, client, mock_auth_settings, expired_jwt_token):
+        """Test token verification with expired token."""
+        with patch('src.server.fastapi_app.settings', mock_auth_settings):
+            response = client.get(
+                "/auth/verify",
+                headers={"Authorization": f"Bearer {expired_jwt_token}"}
+            )
+            
+            assert response.status_code == 401
+            data = response.json()
+            
+            assert data["valid"] is False
+            assert "expired" in data["message"].lower()
+    
+    def test_verify_invalid_token(self, client, mock_auth_settings):
+        """Test token verification with invalid token."""
+        with patch('src.server.fastapi_app.settings', mock_auth_settings):
+            response = client.get(
+                "/auth/verify",
+                headers={"Authorization": "Bearer invalid.token.here"}
+            )
+            
+            assert response.status_code == 401
+            data = response.json()
+            
+            assert data["valid"] is False
+    
+    def test_verify_missing_token(self, client):
+        """Test token verification without token."""
+        response = client.get("/auth/verify")
+        
+        assert response.status_code == 403  # Forbidden - no credentials
+    
+    def test_verify_malformed_header(self, client):
+        """Test token verification with malformed authorization header."""
+        response = client.get(
+            "/auth/verify",
+            headers={"Authorization": "InvalidFormat token"}
+        )
+        
+        assert response.status_code == 403
+    
+    def test_verify_empty_token(self, client):
+        """Test token verification with empty token."""
+        response = client.get(
+            "/auth/verify",
+            headers={"Authorization": "Bearer "}
+        )
+        
+        assert response.status_code == 401
+
+
+@pytest.mark.integration
+class TestAuthLogout:
+    """Test authentication logout endpoint."""
+    
+    def test_logout_valid_token(self, client, mock_auth_settings, valid_jwt_token):
+        """Test logout with valid token."""
+        with patch('src.server.fastapi_app.settings', mock_auth_settings):
+            response = client.post(
+                "/auth/logout",
+                headers={"Authorization": f"Bearer {valid_jwt_token}"}
+            )
+            
+            assert response.status_code == 200
+            data = response.json()
+            
+            assert data["success"] is True
+            assert "logged out" in data["message"].lower()
+    
+    def test_logout_invalid_token(self, client, mock_auth_settings):
+        """Test logout with invalid token."""
+        with patch('src.server.fastapi_app.settings', mock_auth_settings):
+            response = client.post(
+                "/auth/logout",
+                headers={"Authorization": "Bearer invalid.token"}
+            )
+            
+            assert response.status_code == 401
+    
+    def test_logout_missing_token(self, client):
+        """Test logout without token."""
+        response = client.post("/auth/logout")
+        
+        assert response.status_code == 403
+    
+    def test_logout_expired_token(self, client, mock_auth_settings, expired_jwt_token):
+        """Test logout with expired token."""
+        with patch('src.server.fastapi_app.settings', mock_auth_settings):
+            response = client.post(
+                "/auth/logout",
+                headers={"Authorization": f"Bearer {expired_jwt_token}"}
+            )
+            
+            assert response.status_code == 401
+
+
+@pytest.mark.integration
+class TestAuthFlow:
+    """Test complete authentication flow."""
+    
+    def test_complete_login_verify_logout_flow(self, client, mock_auth_settings):
+        """Test complete authentication flow: login -> verify -> logout."""
+        with patch('src.server.fastapi_app.settings', mock_auth_settings):
+            # Step 1: Login
+            login_response = client.post(
+                "/auth/login",
+                json={"password": "test_password"}
+            )
+            
+            assert login_response.status_code == 200
+            login_data = login_response.json()
+            token = login_data["token"]
+            
+            # Step 2: Verify token
+            verify_response = client.get(
+                "/auth/verify",
+                headers={"Authorization": f"Bearer {token}"}
+            )
+            
+            assert verify_response.status_code == 200
+            verify_data = verify_response.json()
+            assert verify_data["valid"] is True
+            
+            # Step 3: Logout
+            logout_response = client.post(
+                "/auth/logout",
+                headers={"Authorization": f"Bearer {token}"}
+            )
+            
+            assert logout_response.status_code == 200
+            logout_data = logout_response.json()
+            assert logout_data["success"] is True
+    
+    def test_multiple_login_attempts(self, client, mock_auth_settings):
+        """Test multiple login attempts with rate limiting consideration."""
+        with patch('src.server.fastapi_app.settings', mock_auth_settings):
+            # Multiple successful logins should work
+            for _ in range(3):
+                response = client.post(
+                    "/auth/login",
+                    json={"password": "test_password"}
+                )
+                assert response.status_code == 200
+            
+            # Failed login attempts
+            for _ in range(3):
+                response = client.post(
+                    "/auth/login",
+                    json={"password": "wrong_password"}
+                )
+                assert response.status_code == 401
+    
+    def test_concurrent_sessions(self, client, mock_auth_settings):
+        """Test that multiple valid tokens can exist simultaneously."""
+        with patch('src.server.fastapi_app.settings', mock_auth_settings):
+            # Get first token
+            response1 = client.post(
+                "/auth/login",
+                json={"password": "test_password"}
+            )
+            token1 = response1.json()["token"]
+            
+            # Get second token
+            response2 = client.post(
+                "/auth/login",
+                json={"password": "test_password"}
+            )
+            token2 = response2.json()["token"]
+            
+            # Both tokens should be valid
+            verify1 = client.get(
+                "/auth/verify",
+                headers={"Authorization": f"Bearer {token1}"}
+            )
+            verify2 = client.get(
+                "/auth/verify",
+                headers={"Authorization": f"Bearer {token2}"}
+            )
+            
+            assert verify1.status_code == 200
+            assert verify2.status_code == 200
\ No newline at end of file
diff --git a/src/tests/unit/test_auth_security.py b/src/tests/unit/test_auth_security.py
new file mode 100644
index 0000000..1ed3a7e
--- /dev/null
+++ b/src/tests/unit/test_auth_security.py
@@ -0,0 +1,269 @@
+"""
+Unit tests for authentication and security functionality.
+
+Tests password hashing, JWT creation/validation, session timeout logic,
+and secure environment variable management.
+"""
+
+import pytest
+import hashlib
+import jwt
+import sys
+import os
+from datetime import datetime, timedelta
+from unittest.mock import patch
+
+# Add source directory to path
+sys.path.insert(0, os.path.join(os.path.dirname(__file__), '..', '..', '..'))
+
+from src.server.fastapi_app import (
+    hash_password,
+    verify_master_password,
+    generate_jwt_token,
+    verify_jwt_token,
+    Settings
+)
+
+
+@pytest.mark.unit
+class TestPasswordHashing:
+    """Test password hashing functionality."""
+    
+    def test_hash_password_with_salt(self, mock_settings):
+        """Test password hashing with salt."""
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            password = "test_password"
+            expected_hash = hashlib.sha256(
+                (password + mock_settings.password_salt).encode()
+            ).hexdigest()
+            
+            result = hash_password(password)
+            
+            assert result == expected_hash
+            assert len(result) == 64  # SHA-256 produces 64 character hex string
+    
+    def test_hash_password_different_inputs(self, mock_settings):
+        """Test that different passwords produce different hashes."""
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            hash1 = hash_password("password1")
+            hash2 = hash_password("password2")
+            
+            assert hash1 != hash2
+    
+    def test_hash_password_consistent(self, mock_settings):
+        """Test that same password always produces same hash."""
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            password = "consistent_password"
+            hash1 = hash_password(password)
+            hash2 = hash_password(password)
+            
+            assert hash1 == hash2
+    
+    def test_hash_password_empty_string(self, mock_settings):
+        """Test hashing empty string."""
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            result = hash_password("")
+            
+            assert isinstance(result, str)
+            assert len(result) == 64
+
+
+@pytest.mark.unit
+class TestMasterPasswordVerification:
+    """Test master password verification functionality."""
+    
+    def test_verify_master_password_with_hash(self, mock_settings):
+        """Test password verification using stored hash."""
+        password = "test_password"
+        mock_settings.master_password_hash = hash_password(password)
+        mock_settings.master_password = None
+        
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            assert verify_master_password(password) is True
+            assert verify_master_password("wrong_password") is False
+    
+    def test_verify_master_password_with_plain_text(self, mock_settings):
+        """Test password verification using plain text (development mode)."""
+        password = "test_password"
+        mock_settings.master_password_hash = None
+        mock_settings.master_password = password
+        
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            assert verify_master_password(password) is True
+            assert verify_master_password("wrong_password") is False
+    
+    def test_verify_master_password_no_config(self, mock_settings):
+        """Test password verification when no password is configured."""
+        mock_settings.master_password_hash = None
+        mock_settings.master_password = None
+        
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            assert verify_master_password("any_password") is False
+
+
+@pytest.mark.unit
+class TestJWTGeneration:
+    """Test JWT token generation functionality."""
+    
+    def test_generate_jwt_token_structure(self, mock_settings):
+        """Test JWT token generation returns correct structure."""
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            result = generate_jwt_token()
+            
+            assert "token" in result
+            assert "expires_at" in result
+            assert isinstance(result["token"], str)
+            assert isinstance(result["expires_at"], datetime)
+    
+    def test_generate_jwt_token_expiry(self, mock_settings):
+        """Test JWT token has correct expiry time."""
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            before_generation = datetime.utcnow()
+            result = generate_jwt_token()
+            after_generation = datetime.utcnow()
+            
+            expected_expiry_min = before_generation + timedelta(
+                hours=mock_settings.token_expiry_hours
+            )
+            expected_expiry_max = after_generation + timedelta(
+                hours=mock_settings.token_expiry_hours
+            )
+            
+            assert expected_expiry_min <= result["expires_at"] <= expected_expiry_max
+    
+    def test_generate_jwt_token_payload(self, mock_settings):
+        """Test JWT token contains correct payload."""
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            result = generate_jwt_token()
+            
+            # Decode without verification to check payload
+            payload = jwt.decode(
+                result["token"], 
+                options={"verify_signature": False}
+            )
+            
+            assert payload["user"] == "master"
+            assert payload["iss"] == "aniworld-fastapi-server"
+            assert "exp" in payload
+            assert "iat" in payload
+
+
+@pytest.mark.unit
+class TestJWTVerification:
+    """Test JWT token verification functionality."""
+    
+    def test_verify_valid_jwt_token(self, mock_settings, valid_jwt_token):
+        """Test verification of valid JWT token."""
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            result = verify_jwt_token(valid_jwt_token)
+            
+            assert result is not None
+            assert result["user"] == "test_user"
+            assert "exp" in result
+    
+    def test_verify_expired_jwt_token(self, mock_settings, expired_jwt_token):
+        """Test verification of expired JWT token."""
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            result = verify_jwt_token(expired_jwt_token)
+            
+            assert result is None
+    
+    def test_verify_invalid_jwt_token(self, mock_settings):
+        """Test verification of invalid JWT token."""
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            result = verify_jwt_token("invalid.token.here")
+            
+            assert result is None
+    
+    def test_verify_jwt_token_wrong_secret(self, mock_settings):
+        """Test verification with wrong secret key."""
+        # Generate token with different secret
+        payload = {
+            "user": "test_user",
+            "exp": datetime.utcnow() + timedelta(hours=1)
+        }
+        wrong_token = jwt.encode(payload, "wrong-secret", algorithm="HS256")
+        
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            result = verify_jwt_token(wrong_token)
+            
+            assert result is None
+
+
+@pytest.mark.unit
+class TestSessionTimeout:
+    """Test session timeout logic."""
+    
+    def test_token_expiry_calculation(self, mock_settings):
+        """Test that token expiry is calculated correctly."""
+        mock_settings.token_expiry_hours = 24
+        
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            before = datetime.utcnow()
+            result = generate_jwt_token()
+            after = datetime.utcnow()
+            
+            # Check expiry is approximately 24 hours from now
+            expected_min = before + timedelta(hours=24)
+            expected_max = after + timedelta(hours=24)
+            
+            assert expected_min <= result["expires_at"] <= expected_max
+    
+    def test_custom_expiry_hours(self, mock_settings):
+        """Test token generation with custom expiry hours."""
+        mock_settings.token_expiry_hours = 1
+        
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            result = generate_jwt_token()
+            
+            # Decode token to check expiry
+            payload = jwt.decode(
+                result["token"],
+                mock_settings.jwt_secret_key,
+                algorithms=["HS256"]
+            )
+            
+            token_exp = datetime.fromtimestamp(payload["exp"])
+            expected_exp = result["expires_at"]
+            
+            # Should be approximately the same (within 1 second)
+            assert abs((token_exp - expected_exp).total_seconds()) < 1
+
+
+@pytest.mark.unit
+class TestSecurityConfiguration:
+    """Test secure environment variable management."""
+    
+    def test_settings_defaults(self):
+        """Test that settings have secure defaults."""
+        settings = Settings()
+        
+        # Should have default values
+        assert settings.jwt_secret_key is not None
+        assert settings.password_salt is not None
+        assert settings.token_expiry_hours > 0
+    
+    def test_settings_from_env(self):
+        """Test settings loading from environment variables."""
+        with patch.dict(os.environ, {
+            'JWT_SECRET_KEY': 'test-secret',
+            'PASSWORD_SALT': 'test-salt',
+            'SESSION_TIMEOUT_HOURS': '12'
+        }):
+            settings = Settings()
+            
+            assert settings.jwt_secret_key == 'test-secret'
+            assert settings.password_salt == 'test-salt'
+            assert settings.token_expiry_hours == 12
+    
+    def test_sensitive_data_not_logged(self, mock_settings, caplog):
+        """Test that sensitive data is not logged."""
+        password = "sensitive_password"
+        
+        with patch('src.server.fastapi_app.settings', mock_settings):
+            hash_password(password)
+            verify_master_password(password)
+            
+            # Check that password doesn't appear in logs
+            for record in caplog.records:
+                assert password not in record.message
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