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Challenge-response authentication is an authentication method in which a server or verifier challenges a claimant to prove knowledge of a secret without transmitting the secret itself. The server sends a challenge, such as a random nonce or timestamp. The claimant uses this challenge, together with a shared secret or private key, to compute a response using a cryptographic function (for example, a hash or an HMAC). The response is sent to the server, which independently computes the expected value using its copy of the secret and verifies the match. If they match, authentication succeeds.

The challenge provides protection against eavesdropping because the secret is not sent in clear. Replay protection is typically achieved by using a unique, fresh challenge for each authentication attempt. Challenge-response can also support mutual authentication when the client proves possession of a secret or key as part of the exchange, not merely proving itself to the server.

Common implementations include CHAP, used in PPP connections, and other protocols that rely on a challenge and a response. DIGEST-M-MD5 and the SCRAM family (Salted Challenge Response Authentication Mechanism) are examples used in various web and network authentication contexts. These schemes are often employed within broader authentication frameworks such as SASL, RADIUS, or VPN services.

Security considerations include the need to protect the secret used in calculations, secure storage of verifier data on the server, and the use of unique, unpredictable challenges to prevent replay attacks. When properly implemented, challenge-response authentication reduces the risk of password exposure in transit but remains dependent on strong secret management and sound cryptographic choices.