diff --git a/tests/PasswordInput.test.svelte b/tests/PasswordInput.test.svelte
deleted file mode 100644
index d690c514..00000000
--- a/tests/PasswordInput.test.svelte
+++ /dev/null
@@ -1,30 +0,0 @@
-<script lang="ts">
-  import { PasswordInput } from "carbon-components-svelte";
-</script>
-
-<PasswordInput labelText="Password" placeholder="Enter password..." />
-
-<PasswordInput
-  labelText="Password"
-  type="text"
-  placeholder="Enter password..."
-  value="as_lta0890sdfpo__!9901"
-  on:paste
-/>
-
-<PasswordInput hideLabel labelText="Password" placeholder="Enter password..." />
-
-<PasswordInput light labelText="Password" placeholder="Enter password..." />
-
-<PasswordInput size="xl" labelText="Password" placeholder="Enter password..." />
-
-<PasswordInput size="sm" labelText="Password" placeholder="Enter password..." />
-
-<PasswordInput
-  invalid
-  invalidText="Incorrect user name or password."
-  labelText="Password"
-  placeholder="Enter password..."
-/>
-
-<PasswordInput disabled labelText="Password" placeholder="Enter password..." />
diff --git a/tests/PasswordInput/PasswordInput.test.svelte b/tests/PasswordInput/PasswordInput.test.svelte
new file mode 100644
index 00000000..2f451be2
--- /dev/null
+++ b/tests/PasswordInput/PasswordInput.test.svelte
@@ -0,0 +1,66 @@
+<script lang="ts">
+  import { PasswordInput } from "carbon-components-svelte";
+
+  export let size: "sm" | "xl" | undefined = undefined;
+  export let value: string | number = "";
+  export let type: "text" | "password" = "password";
+  export let placeholder = "";
+  export let hidePasswordLabel = "Hide password";
+  export let showPasswordLabel = "Show password";
+  export let tooltipAlignment: "start" | "center" | "end" = "center";
+  export let tooltipPosition: "top" | "right" | "bottom" | "left" = "bottom";
+  export let light = false;
+  export let disabled = false;
+  export let helperText = "";
+  export let labelText = "";
+  export let hideLabel = false;
+  export let invalid = false;
+  export let invalidText = "";
+  export let warn = false;
+  export let warnText = "";
+  export let inline = false;
+  export let id = "test-password-input";
+  export let name = "";
+  export let ref: HTMLInputElement | null = null;
+</script>
+
+<PasswordInput
+  {...$$restProps}
+  bind:ref
+  {size}
+  bind:value
+  bind:type
+  {placeholder}
+  {hidePasswordLabel}
+  {showPasswordLabel}
+  {tooltipAlignment}
+  {tooltipPosition}
+  {light}
+  {disabled}
+  {helperText}
+  {labelText}
+  {hideLabel}
+  {invalid}
+  {invalidText}
+  {warn}
+  {warnText}
+  {inline}
+  {id}
+  {name}
+  on:click
+  on:mouseover
+  on:mouseenter
+  on:mouseleave
+  on:change
+  on:keydown
+  on:keyup
+  on:focus={() => {
+    console.log("focus");
+  }}
+  on:blur={() => {
+    console.log("blur");
+  }}
+  on:paste
+/>
+
+<div data-testid="value">{value}</div>
diff --git a/tests/PasswordInput/PasswordInput.test.ts b/tests/PasswordInput/PasswordInput.test.ts
new file mode 100644
index 00000000..33605239
--- /dev/null
+++ b/tests/PasswordInput/PasswordInput.test.ts
@@ -0,0 +1,196 @@
+import { render, screen } from "@testing-library/svelte";
+import PasswordInput from "./PasswordInput.test.svelte";
+import { user } from "../setup-tests";
+
+describe("PasswordInput", () => {
+  describe("Default", () => {
+    it("should render with a label", () => {
+      render(PasswordInput, {
+        labelText: "Password",
+        placeholder: "Enter password...",
+      });
+
+      expect(screen.getByLabelText("Password")).toBeInTheDocument();
+      expect(
+        screen.getByPlaceholderText("Enter password..."),
+      ).toBeInTheDocument();
+    });
+
+    it("should toggle password visibility", async () => {
+      render(PasswordInput, { labelText: "Password", value: "secret123" });
+
+      const input = screen.getByLabelText("Password");
+      expect(input).toHaveAttribute("type", "password");
+
+      await user.click(screen.getByText("Show password"));
+      expect(input).toHaveAttribute("type", "text");
+
+      await user.click(screen.getByText("Hide password"));
+      expect(input).toHaveAttribute("type", "password");
+    });
+
+    it("should handle custom visibility labels", async () => {
+      render(PasswordInput, {
+        labelText: "Password",
+        hidePasswordLabel: "Custom hide",
+        showPasswordLabel: "Custom show",
+      });
+
+      expect(screen.getByLabelText("Password")).toBeInTheDocument();
+      await user.click(screen.getByText("Custom show"));
+      expect(screen.getByText("Custom hide")).toBeInTheDocument();
+      await user.click(screen.getByText("Custom hide"));
+      expect(screen.getByText("Custom show")).toBeInTheDocument();
+    });
+  });
+
+  describe("Tooltip", () => {
+    it("should handle custom tooltip alignment", () => {
+      render(PasswordInput, {
+        labelText: "Password",
+        tooltipAlignment: "start",
+        tooltipPosition: "left",
+      });
+
+      const button = screen.getByRole("button");
+      expect(button).toHaveClass("bx--tooltip--align-start");
+      expect(button).toHaveClass("bx--tooltip--left");
+    });
+  });
+
+  describe("States", () => {
+    it("should handle invalid state", () => {
+      render(PasswordInput, {
+        labelText: "Password",
+        invalid: true,
+        invalidText: "Password must be at least 8 characters",
+      });
+
+      expect(
+        screen.getByText("Password must be at least 8 characters"),
+      ).toBeInTheDocument();
+      const wrapper = screen
+        .getByLabelText("Password")
+        .closest(".bx--text-input__field-wrapper");
+      expect(wrapper).toHaveAttribute("data-invalid");
+    });
+
+    it("should handle warning state", () => {
+      render(PasswordInput, {
+        labelText: "Password",
+        warn: true,
+        warnText: "Password will expire soon",
+      });
+
+      expect(screen.getByText("Password will expire soon")).toBeInTheDocument();
+      const input = screen.getByLabelText("Password");
+      expect(input).toHaveClass("bx--text-input--warning");
+    });
+
+    it("should handle disabled state", () => {
+      render(PasswordInput, {
+        labelText: "Password",
+        disabled: true,
+        value: "disabled-password",
+      });
+
+      const input = screen.getByLabelText("Password");
+      expect(input).toBeDisabled();
+      expect(input).toHaveValue("disabled-password");
+
+      const toggleButton = screen.getByRole("button");
+      expect(toggleButton).toBeDisabled();
+      expect(toggleButton).toHaveClass("bx--btn--disabled");
+    });
+
+    it("should handle helper text", () => {
+      render(PasswordInput, {
+        labelText: "Password",
+        helperText: "Your password should be hard to guess",
+      });
+
+      expect(
+        screen.getByText("Your password should be hard to guess"),
+      ).toBeInTheDocument();
+    });
+  });
+
+  describe("Variants", () => {
+    it("should render light variant", () => {
+      render(PasswordInput, { labelText: "Password", light: true });
+
+      const wrapper = screen
+        .getByLabelText("Password")
+        .closest(".bx--text-input-wrapper");
+      expect(wrapper).toHaveClass("bx--text-input-wrapper--light");
+    });
+
+    it("should render inline variant", () => {
+      render(PasswordInput, {
+        labelText: "Password",
+        inline: true,
+      });
+
+      const wrapper = screen
+        .getByLabelText("Password")
+        .closest(".bx--text-input-wrapper");
+      expect(wrapper).toHaveClass("bx--text-input-wrapper--inline");
+    });
+
+    it("should render in small size", () => {
+      render(PasswordInput, { labelText: "Password", size: "sm" });
+
+      const input = screen.getByLabelText("Password");
+      expect(input).toHaveClass("bx--text-input--sm");
+    });
+
+    it("should render in extra-large size", () => {
+      render(PasswordInput, {
+        labelText: "Password",
+        size: "xl",
+      });
+
+      const input = screen.getByLabelText("Password");
+      expect(input).toHaveClass("bx--text-input--xl");
+    });
+  });
+
+  describe("Label handling", () => {
+    it("should handle hidden label", () => {
+      render(PasswordInput, { labelText: "Password", hideLabel: true });
+
+      const label = screen.getByText("Password");
+      expect(label).toHaveClass("bx--visually-hidden");
+    });
+
+    it("should handle custom id", () => {
+      render(PasswordInput, { labelText: "Password", id: "custom-id" });
+
+      const input = screen.getByLabelText("Password");
+      expect(input).toHaveAttribute("id", "custom-id");
+    });
+  });
+
+  describe("Events", () => {
+    it("should handle input events", async () => {
+      render(PasswordInput, { labelText: "Password" });
+
+      const input = screen.getByLabelText("Password");
+      await user.type(input, "test123");
+      expect(screen.getByTestId("value")).toHaveTextContent("test123");
+    });
+
+    it("should handle focus and blur events", async () => {
+      const consoleLog = vi.spyOn(console, "log");
+      render(PasswordInput, { labelText: "Password" });
+
+      expect(consoleLog).not.toHaveBeenCalled();
+      const input = screen.getByLabelText("Password");
+      await user.click(input);
+      expect(consoleLog).toHaveBeenCalledWith("focus");
+
+      await user.tab();
+      expect(consoleLog).toHaveBeenCalledWith("blur");
+    });
+  });
+});