diff --git a/web/packages/shared/hooks/useRefAutoFocus/useRefAutoFocus.ts b/web/packages/shared/hooks/useRefAutoFocus/useRefAutoFocus.ts
index 7b97905749a3e..c0747a95b9bca 100644
--- a/web/packages/shared/hooks/useRefAutoFocus/useRefAutoFocus.ts
+++ b/web/packages/shared/hooks/useRefAutoFocus/useRefAutoFocus.ts
@@ -24,6 +24,10 @@ import { DependencyList, MutableRefObject, useEffect, useRef } from 'react';
  */
 export function useRefAutoFocus<T extends { focus(): void }>(options: {
   shouldFocus: boolean;
+  /**
+   * @deprecated Include items from refocusDeps into the calculation of shouldFocus instead.
+   * The list of useEffect deps should be statically known.
+   */
   refocusDeps?: DependencyList;
 }): MutableRefObject<T> {
   const ref = useRef<T>(undefined);
diff --git a/web/packages/teleterm/src/ui/ClusterConnect/ClusterLogin/ClusterLogin.test.tsx b/web/packages/teleterm/src/ui/ClusterConnect/ClusterLogin/ClusterLogin.test.tsx
new file mode 100644
index 0000000000000..c42974ed4cac6
--- /dev/null
+++ b/web/packages/teleterm/src/ui/ClusterConnect/ClusterLogin/ClusterLogin.test.tsx
@@ -0,0 +1,61 @@
+/**
+ * Teleport
+ * Copyright (C) 2025 Gravitational, Inc.
+ *
+ * This program is free software: you can redistribute it and/or modify
+ * it under the terms of the GNU Affero General Public License as published by
+ * the Free Software Foundation, either version 3 of the License, or
+ * (at your option) any later version.
+ *
+ * This program is distributed in the hope that it will be useful,
+ * but WITHOUT ANY WARRANTY; without even the implied warranty of
+ * MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+ * GNU Affero General Public License for more details.
+ *
+ * You should have received a copy of the GNU Affero General Public License
+ * along with this program.  If not, see <http://www.gnu.org/licenses/>.
+ */
+
+import userEvent from '@testing-library/user-event';
+
+import { render, screen } from 'design/utils/testing';
+
+import { MockedUnaryCall } from 'teleterm/services/tshd/cloneableClient';
+import { makeRootCluster } from 'teleterm/services/tshd/testHelpers';
+import { MockAppContextProvider } from 'teleterm/ui/fixtures/MockAppContextProvider';
+import { MockAppContext } from 'teleterm/ui/fixtures/mocks';
+
+import { ClusterLogin } from './ClusterLogin';
+
+it('keeps the focus on the password field on submission error', async () => {
+  const user = userEvent.setup();
+  const cluster = makeRootCluster();
+  const appContext = new MockAppContext();
+  appContext.addRootCluster(cluster);
+
+  jest
+    .spyOn(appContext.tshd, 'login')
+    .mockResolvedValue(
+      new MockedUnaryCall(undefined, new Error('whoops something went wrong'))
+    );
+
+  render(
+    <MockAppContextProvider appContext={appContext}>
+      <ClusterLogin
+        clusterUri={cluster.uri}
+        onCancel={() => {}}
+        prefill={{ username: 'alice' }}
+        reason={undefined}
+      />
+    </MockAppContextProvider>
+  );
+
+  const passwordField = await screen.findByLabelText('Password');
+  expect(passwordField).toHaveFocus();
+
+  await user.type(passwordField, 'foo');
+  await user.click(screen.getByText('Sign In'));
+
+  await screen.findByText('whoops something went wrong');
+  expect(passwordField).toHaveFocus();
+});
diff --git a/web/packages/teleterm/src/ui/ClusterConnect/ClusterLogin/FormLogin/FormLocal/FormLocal.tsx b/web/packages/teleterm/src/ui/ClusterConnect/ClusterLogin/FormLogin/FormLocal/FormLocal.tsx
index ec729af33853d..7c8fc24707e72 100644
--- a/web/packages/teleterm/src/ui/ClusterConnect/ClusterLogin/FormLogin/FormLocal/FormLocal.tsx
+++ b/web/packages/teleterm/src/ui/ClusterConnect/ClusterLogin/FormLogin/FormLocal/FormLocal.tsx
@@ -38,11 +38,18 @@ export const FormLocal = ({
   const [pass, setPass] = useState('');
   const [user, setUser] = useState(loggedInUserName || '');
 
+  // loginAttempt.status needs to be checked here so that auto focus is automatically managed when
+  // the form reverts from a processing state to an error state.
+  const isAutoFocusAllowed =
+    autoFocus && hasTransitionEnded && loginAttempt.status !== 'processing';
+  // useRefAutoFocus is used instead of just plain autoFocus because of some weird focus issues
+  // stemming from, most probably, using <StepSlider> within a modal. autoFocus generally works
+  // within modals. We've never documented why we use this hook so that knowledge is lost in time.
   const usernameInputRef = useRefAutoFocus<HTMLInputElement>({
-    shouldFocus: hasTransitionEnded && autoFocus && !loggedInUserName,
+    shouldFocus: isAutoFocusAllowed && !loggedInUserName,
   });
   const passwordInputRef = useRefAutoFocus<HTMLInputElement>({
-    shouldFocus: hasTransitionEnded && autoFocus && !!loggedInUserName,
+    shouldFocus: isAutoFocusAllowed && !!loggedInUserName,
   });
 
   function onLoginClick(