diff --git a/CHANGELOG.md b/CHANGELOG.md
index 255e14ae44..a0417d7617 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -17,6 +17,7 @@ Main (unreleased)
 - Add the `otelcol.receiver.faro` receiver to receive traces and logs from the Grafana Faro Web SDK. (@mar4uk)
 
 - Add entropy support for `loki.secretfilter` (@romain-gaillard)
+- Add htpasswd file based authentication for `otelcol.auth.basic` (@pkarakal) 
 
 ### Enhancements
 
diff --git a/docs/sources/reference/components/otelcol/otelcol.auth.basic.md b/docs/sources/reference/components/otelcol/otelcol.auth.basic.md
index b1af287aa2..35ca7c1422 100644
--- a/docs/sources/reference/components/otelcol/otelcol.auth.basic.md
+++ b/docs/sources/reference/components/otelcol/otelcol.auth.basic.md
@@ -31,6 +31,11 @@ You can specify multiple `otelcol.auth.basic` components by giving them differen
 otelcol.auth.basic "<LABEL>" {
   username = "<USERNAME>"
   password = "<PASSWORD>"
+  
+  htpasswd {
+    file = "/etc/alloy/.htpasswd"
+    inline = "<USERNAME>:<PASSWORD>"
+  }
 }
 ```
 
@@ -38,25 +43,37 @@ otelcol.auth.basic "<LABEL>" {
 
 You can use the following arguments with `otelcol.auth.basic`:
 
-| Name       | Type     | Description                                        | Default | Required |
-| ---------- | -------- | -------------------------------------------------- | ------- | -------- |
-| `password` | `secret` | Password to use for basic authentication requests. |         | yes      |
-| `username` | `string` | Username to use for basic authentication requests. |         | yes      |
+| Name       | Type     | Description                                                                     | Default | Required |
+|------------|----------|---------------------------------------------------------------------------------|---------|----------|
+| `password` | `secret` | Password to use for basic authentication requests.                              |         | no       |
+| `username` | `string` | Username to use for basic authentication requests.                              |         | no       |
+
 
 ## Blocks
 
 You can use the following block with `otelcol.auth.basic`:
 
 | Block                            | Description                                                                | Required |
-| -------------------------------- | -------------------------------------------------------------------------- | -------- |
+|----------------------------------|----------------------------------------------------------------------------|----------|
 | [`debug_metrics`][debug_metrics] | Configures the metrics that this component generates to monitor its state. | no       |
+| [`htpasswd`][htpasswd]           | Configures the service authentication for a receiver                       | no       |
 
 [debug_metrics]: #debug_metrics
+[htpasswd]: #htpasswd
 
 ### `debug_metrics`
 
 {{< docs/shared lookup="reference/components/otelcol-debug-metrics-block.md" source="alloy" version="<ALLOY_VERSION>" >}}
 
+### `htpasswd`
+
+The `htpasswd` block configures how the server extensions will authenticate calls.
+
+| Name     | Type     | Description                                                        | Default | Required |
+|----------|----------|--------------------------------------------------------------------|---------|----------|
+| `file`   | `string` | Path to the htpasswd file to use for basic authentication requests | `""`    | no       |
+| `inline` | `string` | The htpasswd file inline content                                   | `""`    | no       |
+
 ## Exported fields
 
 The following fields are exported and can be referenced by other components:
@@ -73,8 +90,9 @@ The following fields are exported and can be referenced by other components:
 
 `otelcol.auth.basic` doesn't expose any component-specific debug information.
 
-## Example
+## Examples
 
+### Forward signals to exporters
 This example configures [`otelcol.exporter.otlp`][otelcol.exporter.otlp] to use basic authentication:
 
 ```alloy
@@ -91,4 +109,95 @@ otelcol.auth.basic "creds" {
 }
 ```
 
-[otelcol.exporter.otlp]: ../otelcol.exporter.otlp/
+
+### Authenticating requests for receivers
+
+#### Use Username/Password
+This example configures [`otelcol.receiver.otlp`][otelcol.receiver.otlp] to use basic authentication using a single
+username and password combination:
+
+```alloy
+otelcol.receiver.otlp "example" {
+  grpc {
+    endpoint = "127.0.0.1:4317"
+    
+    auth = otelcol.auth.basic.creds.handler
+  }
+  
+  output {
+    metrics = [otelcol.exporter.debug.default.input]
+    logs    = [otelcol.exporter.debug.default.input]
+    traces  = [otelcol.exporter.debug.default.input]
+  } 
+}
+
+otelcol.exporter.debug "default" {}
+
+otelcol.auth.basic "creds" {
+  username = "demo"
+  password = sys.env("API_KEY")
+}
+```
+
+#### Use htpasswd file
+This example configures [`otelcol.receiver.otlp`][otelcol.receiver.otlp] to use basic authentication using an htpasswd 
+file containing the users to use for basic auth:
+
+```alloy
+otelcol.receiver.otlp "example" {
+  grpc {
+    endpoint = "127.0.0.1:4317"
+    
+    auth = otelcol.auth.basic.creds.handler
+  }
+  
+  output {
+    metrics = [otelcol.exporter.debug.default.input]
+    logs    = [otelcol.exporter.debug.default.input]
+    traces  = [otelcol.exporter.debug.default.input]
+  } 
+}
+
+otelcol.exporter.debug "default" {}
+
+otelcol.auth.basic "creds" {
+  htpasswd {
+    file = "/etc/alloy/.htpasswd"
+  }
+}
+```
+
+#### Combination of both
+This example configures [`otelcol.receiver.otlp`][otelcol.receiver.otlp] to use basic authentication using a combination
+of both an htpasswd file and username/password. Note that if the username provided also exists in the htpasswd file, it 
+takes precedence over the one in the htpasswd file:
+
+```alloy
+otelcol.receiver.otlp "example" {
+  grpc {
+    endpoint = "127.0.0.1:4317"
+    
+    auth = otelcol.auth.basic.creds.handler
+  }
+  
+  output {
+    metrics = [otelcol.exporter.debug.default.input]
+    logs    = [otelcol.exporter.debug.default.input]
+    traces  = [otelcol.exporter.debug.default.input]
+  } 
+}
+
+otelcol.exporter.debug "default" {}
+
+otelcol.auth.basic "creds" {
+  username = "demo"
+  password = sys.env("API_KEY")
+  
+  htpasswd {
+    file = "/etc/alloy/.htpasswd"
+  }
+}
+```
+
+
+[otelcol.receiver.otlp]: ../otelcol.receiver.otlp/
diff --git a/internal/component/otelcol/auth/basic/basic.go b/internal/component/otelcol/auth/basic/basic.go
index f0654bfd21..ea9d750575 100644
--- a/internal/component/otelcol/auth/basic/basic.go
+++ b/internal/component/otelcol/auth/basic/basic.go
@@ -2,6 +2,7 @@
 package basic
 
 import (
+	"errors"
 	"fmt"
 
 	"github.com/grafana/alloy/internal/component"
@@ -15,6 +16,11 @@ import (
 	"go.opentelemetry.io/collector/pipeline"
 )
 
+var (
+	errNoCredentialSource = errors.New("no credential source provided") //nolint:gofmt
+	errNoPasswordProvided = errors.New("no password provided")
+)
+
 func init() {
 	component.Register(component.Registration{
 		Name:      "otelcol.auth.basic",
@@ -29,10 +35,28 @@ func init() {
 	})
 }
 
+type HtpasswdConfig struct {
+	File   string `alloy:"file,attr,optional"`
+	Inline string `alloy:"inline,attr,optional"`
+}
+
+func (c HtpasswdConfig) convert() *basicauthextension.HtpasswdSettings {
+	settings := &basicauthextension.HtpasswdSettings{}
+	if c.File != "" {
+		settings.File = c.File
+	}
+	if c.Inline != "" {
+		settings.Inline = c.Inline
+	}
+	return settings
+}
+
 // Arguments configures the otelcol.auth.basic component.
 type Arguments struct {
-	Username string            `alloy:"username,attr"`
-	Password alloytypes.Secret `alloy:"password,attr"`
+	Username string            `alloy:"username,attr,optional"`
+	Password alloytypes.Secret `alloy:"password,attr,optional"`
+
+	Htpasswd *HtpasswdConfig `alloy:"htpasswd,block,optional"`
 
 	// DebugMetrics configures component internal metrics. Optional.
 	DebugMetrics otelcolCfg.DebugMetricsArguments `alloy:"debug_metrics,block,optional"`
@@ -45,6 +69,24 @@ func (args *Arguments) SetToDefault() {
 	args.DebugMetrics.SetToDefault()
 }
 
+// Validate implements syntax.Validator
+func (args Arguments) Validate() error {
+	// check if no argument was provided
+	if args.Username == "" && args.Password == "" && args.Htpasswd == nil {
+		return errNoCredentialSource
+	}
+	// the downstream basicauthextension package supports having both inline
+	// and htpasswd files, so we should not error out in case both are
+	// provided
+
+	// check if password was not provided when username is provided
+	if args.Username != "" && args.Password == "" {
+		return errNoPasswordProvided
+	}
+
+	return nil
+}
+
 // ConvertClient implements auth.Arguments.
 func (args Arguments) ConvertClient() (otelcomponent.Config, error) {
 	return &basicauthextension.Config{
@@ -57,11 +99,17 @@ func (args Arguments) ConvertClient() (otelcomponent.Config, error) {
 
 // ConvertServer implements auth.Arguments.
 func (args Arguments) ConvertServer() (otelcomponent.Config, error) {
-	return &basicauthextension.Config{
-		Htpasswd: &basicauthextension.HtpasswdSettings{
-			Inline: fmt.Sprintf("%s:%s", args.Username, args.Password),
-		},
-	}, nil
+	c := &basicauthextension.Config{
+		Htpasswd: &basicauthextension.HtpasswdSettings{},
+	}
+	if args.Htpasswd != nil {
+		c.Htpasswd = args.Htpasswd.convert()
+	}
+	if args.Username != "" && args.Password != "" {
+		c.Htpasswd.Inline += fmt.Sprintf("\n%s:%s", args.Username, args.Password)
+	}
+
+	return c, nil
 }
 
 // AuthFeatures implements auth.Arguments.
diff --git a/internal/component/otelcol/auth/basic/basic_test.go b/internal/component/otelcol/auth/basic/basic_test.go
index 3d4521d2ed..8a9c4e4411 100644
--- a/internal/component/otelcol/auth/basic/basic_test.go
+++ b/internal/component/otelcol/auth/basic/basic_test.go
@@ -6,6 +6,7 @@ import (
 	"fmt"
 	"net/http"
 	"net/http/httptest"
+	"os"
 	"testing"
 	"time"
 
@@ -18,18 +19,26 @@ import (
 	"github.com/stretchr/testify/assert"
 	"github.com/stretchr/testify/require"
 	extauth "go.opentelemetry.io/collector/extension/extensionauth"
+
+	"golang.org/x/crypto/bcrypt"
 )
 
 const (
-	actualUsername = "foo"
-	actualPassword = "bar"
+	actualUsername   = "foo"
+	actualPassword   = "bar"
+	htpasswdPath     = ".htpasswd"
+	htpasswdUser     = "user"
+	htpasswdPassword = "password"
 )
 
 var (
 	cfg = fmt.Sprintf(`
 		username = "%s"
 		password = "%s"
-	`, actualUsername, actualPassword)
+		htpasswd = {
+			file = "%s"
+		}
+	`, actualUsername, actualPassword, htpasswdPath)
 )
 
 // Test performs a basic integration test which runs the otelcol.auth.basic
@@ -87,6 +96,8 @@ func TestServerAuth(t *testing.T) {
 	ctx := componenttest.TestContext(t)
 	ctx, cancel := context.WithTimeout(ctx, time.Minute)
 	defer cancel()
+	createTestHtpasswdFile(t, htpasswdPath, htpasswdUser, htpasswdPassword)
+	defer deleteTestHtpasswdFile(t, htpasswdPath)
 
 	ctrl := newTestComponent(t, ctx)
 	require.NoError(t, ctrl.WaitRunning(time.Second), "component never started")
@@ -118,6 +129,34 @@ func TestServerAuth(t *testing.T) {
 	b64EncodingAuth := base64.StdEncoding.EncodeToString([]byte(fmt.Sprintf("%s:%s", actualUsername, actualPassword)))
 	_, err = otelServerExtension.Authenticate(ctx, map[string][]string{"Authorization": {"Basic " + b64EncodingAuth}})
 	require.NoError(t, err)
+
+	b64EncodingAuth = base64.StdEncoding.EncodeToString([]byte(fmt.Sprintf("%s:%s", htpasswdUser, htpasswdPassword)))
+	_, err = otelServerExtension.Authenticate(ctx, map[string][]string{"Authorization": {"Basic " + b64EncodingAuth}})
+	require.NoError(t, err)
+}
+
+func createTestHtpasswdFile(t *testing.T, path, username, password string) {
+	t.Helper()
+
+	hash, err := bcrypt.GenerateFromPassword([]byte(password), bcrypt.DefaultCost)
+	require.NoError(t, err)
+
+	content := fmt.Sprintf("%s:%s\n", username, string(hash))
+
+	// create file
+	f, err := os.OpenFile(path, os.O_APPEND|os.O_CREATE|os.O_WRONLY, 0644)
+	require.NoError(t, err)
+	defer f.Close()
+
+	// Write the entry to the file
+	_, err = f.WriteString(content)
+	require.NoError(t, err)
+}
+
+func deleteTestHtpasswdFile(t *testing.T, path string) {
+	t.Helper()
+	err := os.Remove(path)
+	require.NoError(t, err)
 }
 
 // newTestComponent brings up and runs the test component.