diff --git a/README.md b/README.md
index 12f5907..9bff716 100644
--- a/README.md
+++ b/README.md
@@ -170,12 +170,20 @@ This can trigger client-side authentication interfaces, such as the browser auth
 
 Setting `authenticate` to `true` adds the header `WWW-Authenticate: Basic`. When `false`, no header is added (default).
 
+When `proxyMode` is `true` it will use the [`Proxy-Authenticate`](https://developer.mozilla.org/en-US/docs/Web/HTTP/Headers/Proxy-Authenticate) header instead.
+
 ```js
 fastify.register(require('@fastify/basic-auth'), {
   validate,
   authenticate: true // WWW-Authenticate: Basic
 })
 
+fastify.register(require('@fastify/basic-auth'), {
+  validate,
+  proxyMode: true,
+  authenticate: true // Proxy-Authenticate: Basic
+})
+
 fastify.register(require('@fastify/basic-auth'), {
   validate,
   authenticate: false // no authenticate header, same as omitting authenticate option
@@ -216,10 +224,17 @@ fastify.register(require('@fastify/basic-auth'), {
 })
 ```
 
+### `proxyMode` Boolean (optional, default: false)
+
+Setting the `proxyMode` to `true` will make the plugin implement [HTTP proxy authentication](https://developer.mozilla.org/en-US/docs/Web/HTTP/Guides/Authentication#proxy_authentication), rather than resource authentication. In other words, the plugin will:
+
+- read credentials from the `Proxy-Authorization` header rather than `Authorization`
+- use `407` response status code instead of `401` to signal missing or invalid credentials
+- use the `Proxy-Authenticate` header rather than `WWW-Authenticate` if the `authenticate` option is set
 
 ### `header` String (optional)
 
-The `header` option specifies the header name to get credentials from for validation.
+The `header` option specifies the header name to get credentials from for validation. If not specified it defaults to `Authorization` or `Proxy-Authorization` (according to the value of `proxyMode` option)
 
 ```js
 fastify.register(require('@fastify/basic-auth'), {
diff --git a/index.js b/index.js
index e6ff7c2..da3d390 100644
--- a/index.js
+++ b/index.js
@@ -3,12 +3,6 @@
 const fp = require('fastify-plugin')
 const createError = require('@fastify/error')
 
-const MissingOrBadAuthorizationHeader = createError(
-  'FST_BASIC_AUTH_MISSING_OR_BAD_AUTHORIZATION_HEADER',
-  'Missing or bad formatted authorization header',
-  401
-)
-
 /**
  * HTTP provides a simple challenge-response authentication framework
  * that can be used by a server to challenge a client request and by a
@@ -73,8 +67,15 @@ async function fastifyBasicAuth (fastify, opts) {
   const strictCredentials = opts.strictCredentials ?? true
   const useUtf8 = opts.utf8 ?? true
   const charset = useUtf8 ? 'utf-8' : 'ascii'
-  const authenticateHeader = getAuthenticateHeaders(opts.authenticate, useUtf8)
-  const header = opts.header?.toLowerCase() || 'authorization'
+  const authenticateHeader = getAuthenticateHeaders(opts.authenticate, useUtf8, opts.proxyMode)
+  const header = opts.header?.toLowerCase() || (opts.proxyMode ? 'proxy-authorization' : 'authorization')
+  const errorResponseCode = opts.proxyMode ? 407 : 401
+
+  const MissingOrBadAuthorizationHeader = createError(
+    'FST_BASIC_AUTH_MISSING_OR_BAD_AUTHORIZATION_HEADER',
+    'Missing or bad formatted authorization header',
+    errorResponseCode
+  )
 
   const credentialsRE = strictCredentials
     ? credentialsStrictRE
@@ -124,12 +125,12 @@ async function fastifyBasicAuth (fastify, opts) {
 
     function done (err) {
       if (err !== undefined) {
-        // We set the status code to be 401 if it is not set
+        // We set the status code to be `errorResponseCode` (normally 401) if it is not set
         if (!err.statusCode) {
-          err.statusCode = 401
+          err.statusCode = errorResponseCode
         }
 
-        if (err.statusCode === 401) {
+        if (err.statusCode === errorResponseCode) {
           const header = authenticateHeader(req)
           if (header) {
             reply.header(header[0], header[1])
@@ -143,8 +144,8 @@ async function fastifyBasicAuth (fastify, opts) {
   }
 }
 
-function getAuthenticateHeaders (authenticate, useUtf8) {
-  const defaultHeaderName = 'WWW-Authenticate'
+function getAuthenticateHeaders (authenticate, useUtf8, proxyMode) {
+  const defaultHeaderName = proxyMode ? 'Proxy-Authenticate' : 'WWW-Authenticate'
   if (!authenticate) return () => false
   if (authenticate === true) {
     return useUtf8
diff --git a/test/index.test.js b/test/index.test.js
index 3f35aad..e8987af 100644
--- a/test/index.test.js
+++ b/test/index.test.js
@@ -685,6 +685,68 @@ test('WWW-Authenticate Custom Header (authenticate: {realm: "example", header: "
   t.assert.strictEqual(res2.statusCode, 200)
 })
 
+test("Proxy authentication (proxyMode: true, authenticate: { realm: 'example' }, utf8: true)", async t => {
+  t.plan(12)
+
+  const fastify = Fastify()
+  const authenticate = { realm: 'example' }
+  fastify.register(basicAuth, { validate, authenticate, utf8: true, proxyMode: true })
+
+  function validate (username, password, _req, _res, done) {
+    if (username === 'user' && password === 'pwd') {
+      done()
+    } else {
+      done(new Error('Unauthorized'))
+    }
+  }
+
+  fastify.after(() => {
+    fastify.route({
+      method: 'GET',
+      url: '/',
+      preHandler: fastify.basicAuth,
+      handler: (_req, reply) => {
+        reply.send({ hello: 'world' })
+      }
+    })
+  })
+
+  const res1 = await fastify.inject({
+    url: '/',
+    method: 'GET'
+  })
+  t.assert.ok(res1.body)
+  t.assert.strictEqual(res1.headers['proxy-authenticate'], 'Basic realm="example", charset="UTF-8"')
+  t.assert.strictEqual(res1.headers['www-authenticate'], undefined)
+  t.assert.strictEqual(res1.statusCode, 407)
+
+  const res2 = await fastify.inject({
+    url: '/',
+    method: 'GET',
+    headers: {
+      authorization: basicAuthHeader('user', 'pwd')
+    }
+  })
+
+  t.assert.ok(res2.body)
+  t.assert.strictEqual(res2.headers['proxy-authenticate'], 'Basic realm="example", charset="UTF-8"')
+  t.assert.strictEqual(res2.headers['www-authenticate'], undefined)
+  t.assert.strictEqual(res2.statusCode, 407)
+
+  const res3 = await fastify.inject({
+    url: '/',
+    method: 'GET',
+    headers: {
+      'proxy-authorization': basicAuthHeader('user', 'pwd')
+    }
+  })
+
+  t.assert.ok(res3.body)
+  t.assert.strictEqual(res3.headers['proxy-authenticate'], undefined)
+  t.assert.strictEqual(res3.headers['www-authenticate'], undefined)
+  t.assert.strictEqual(res3.statusCode, 200)
+})
+
 test('Header option specified', async t => {
   t.plan(2)
 
diff --git a/types/index.d.ts b/types/index.d.ts
index f1911df..135c0f8 100644
--- a/types/index.d.ts
+++ b/types/index.d.ts
@@ -29,6 +29,7 @@ declare namespace fastifyBasicAuth {
       done: (err?: Error) => void
     ): void | Promise<void | Error>;
     authenticate?: boolean | { realm?: string | ((req: FastifyRequest) => string); header?: string };
+    proxyMode?: boolean;
     header?: string;
     strictCredentials?: boolean | undefined;
     utf8?: boolean | undefined;
diff --git a/types/index.test-d.ts b/types/index.test-d.ts
index aed580a..2eb4c79 100644
--- a/types/index.test-d.ts
+++ b/types/index.test-d.ts
@@ -75,6 +75,13 @@ app.register(fastifyBasicAuth, {
   authenticate: { header: 'x-custom-authenticate' }
 })
 
+// authenticate in proxy mode
+app.register(fastifyBasicAuth, {
+  validate: () => {},
+  proxyMode: true,
+  authenticate: true,
+})
+
 app.register(fastifyBasicAuth, {
   validate: () => {},
   strictCredentials: true