diff --git a/tests/http/exceptions/__init__.py b/tests/http/exceptions/__init__.py
new file mode 100644
index 0000000000..232621f0b5
--- /dev/null
+++ b/tests/http/exceptions/__init__.py
@@ -0,0 +1,10 @@
+# -*- coding: utf-8 -*-
+"""
+    proxy.py
+    ~~~~~~~~
+    ⚡⚡⚡ Fast, Lightweight, Pluggable, TLS interception capable proxy server focused on
+    Network monitoring, controls & Application development, testing, debugging.
+
+    :copyright: (c) 2013-present by Abhinav Singh and contributors.
+    :license: BSD, see LICENSE for more details.
+"""
diff --git a/tests/http/exceptions/test_http_proxy_auth_failed.py b/tests/http/exceptions/test_http_proxy_auth_failed.py
new file mode 100644
index 0000000000..dc37b3b613
--- /dev/null
+++ b/tests/http/exceptions/test_http_proxy_auth_failed.py
@@ -0,0 +1,120 @@
+# -*- coding: utf-8 -*-
+"""
+    proxy.py
+    ~~~~~~~~
+    ⚡⚡⚡ Fast, Lightweight, Pluggable, TLS interception capable proxy server focused on
+    Network monitoring, controls & Application development, testing, debugging.
+
+    :copyright: (c) 2013-present by Abhinav Singh and contributors.
+    :license: BSD, see LICENSE for more details.
+"""
+import selectors
+import unittest
+from unittest import mock
+
+from proxy.proxy import Proxy
+from proxy.http.exception.proxy_auth_failed import ProxyAuthenticationFailed
+from proxy.http.handler import HttpProtocolHandler
+from proxy.core.connection import TcpClientConnection
+from proxy.common.utils import build_http_request
+
+
+class TestHttpProxyAuthFailed(unittest.TestCase):
+
+    @mock.patch('selectors.DefaultSelector')
+    @mock.patch('socket.fromfd')
+    def setUp(self,
+              mock_fromfd: mock.Mock,
+              mock_selector: mock.Mock) -> None:
+        self.mock_fromfd = mock_fromfd
+        self.mock_selector = mock_selector
+
+        self.fileno = 10
+        self._addr = ('127.0.0.1', 54382)
+        self.flags = Proxy.initialize(["--basic-auth", "user:pass"])
+        self._conn = mock_fromfd.return_value
+        self.protocol_handler = HttpProtocolHandler(
+            TcpClientConnection(self._conn, self._addr),
+            flags=self.flags)
+        self.protocol_handler.initialize()
+
+    @mock.patch('proxy.http.proxy.server.TcpServerConnection')
+    def test_proxy_auth_fails_without_cred(self, mock_server_conn: mock.Mock) -> None:
+        self._conn.recv.return_value = build_http_request(
+            b'GET', b'http://upstream.host/not-found.html',
+            headers={
+                b'Host': b'upstream.host'
+            })
+        self.mock_selector.return_value.select.side_effect = [
+            [(selectors.SelectorKey(
+                fileobj=self._conn,
+                fd=self._conn.fileno,
+                events=selectors.EVENT_READ,
+                data=None), selectors.EVENT_READ)], ]
+
+        self.protocol_handler.run_once()
+        mock_server_conn.assert_not_called()
+        self.assertEqual(self.protocol_handler.client.has_buffer(), True)
+        self.assertEqual(
+            self.protocol_handler.client.buffer[0], ProxyAuthenticationFailed.RESPONSE_PKT)
+        self._conn.send.assert_not_called()
+
+    @mock.patch('proxy.http.proxy.server.TcpServerConnection')
+    def test_proxy_auth_fails_with_invalid_cred(self, mock_server_conn: mock.Mock) -> None:
+        self._conn.recv.return_value = build_http_request(
+            b'GET', b'http://upstream.host/not-found.html',
+            headers={
+                b'Host': b'upstream.host',
+                b'Proxy-Authorization': b'Basic hello',
+            })
+        self.mock_selector.return_value.select.side_effect = [
+            [(selectors.SelectorKey(
+                fileobj=self._conn,
+                fd=self._conn.fileno,
+                events=selectors.EVENT_READ,
+                data=None), selectors.EVENT_READ)], ]
+
+        self.protocol_handler.run_once()
+        mock_server_conn.assert_not_called()
+        self.assertEqual(self.protocol_handler.client.has_buffer(), True)
+        self.assertEqual(
+            self.protocol_handler.client.buffer[0], ProxyAuthenticationFailed.RESPONSE_PKT)
+        self._conn.send.assert_not_called()
+
+    @mock.patch('proxy.http.proxy.server.TcpServerConnection')
+    def test_proxy_auth_works_with_valid_cred(self, mock_server_conn: mock.Mock) -> None:
+        self._conn.recv.return_value = build_http_request(
+            b'GET', b'http://upstream.host/not-found.html',
+            headers={
+                b'Host': b'upstream.host',
+                b'Proxy-Authorization': b'Basic dXNlcjpwYXNz',
+            })
+        self.mock_selector.return_value.select.side_effect = [
+            [(selectors.SelectorKey(
+                fileobj=self._conn,
+                fd=self._conn.fileno,
+                events=selectors.EVENT_READ,
+                data=None), selectors.EVENT_READ)], ]
+
+        self.protocol_handler.run_once()
+        mock_server_conn.assert_called_once()
+        self.assertEqual(self.protocol_handler.client.has_buffer(), False)
+
+    @mock.patch('proxy.http.proxy.server.TcpServerConnection')
+    def test_proxy_auth_works_with_mixed_case_basic_string(self, mock_server_conn: mock.Mock) -> None:
+        self._conn.recv.return_value = build_http_request(
+            b'GET', b'http://upstream.host/not-found.html',
+            headers={
+                b'Host': b'upstream.host',
+                b'Proxy-Authorization': b'bAsIc dXNlcjpwYXNz',
+            })
+        self.mock_selector.return_value.select.side_effect = [
+            [(selectors.SelectorKey(
+                fileobj=self._conn,
+                fd=self._conn.fileno,
+                events=selectors.EVENT_READ,
+                data=None), selectors.EVENT_READ)], ]
+
+        self.protocol_handler.run_once()
+        mock_server_conn.assert_called_once()
+        self.assertEqual(self.protocol_handler.client.has_buffer(), False)
diff --git a/tests/http/test_http_request_rejected.py b/tests/http/exceptions/test_http_request_rejected.py
similarity index 100%
rename from tests/http/test_http_request_rejected.py
rename to tests/http/exceptions/test_http_request_rejected.py