diff --git a/README.md b/README.md
index d3341ea..5cad572 100644
--- a/README.md
+++ b/README.md
@@ -14,6 +14,7 @@ This plugin was based on a code snippet by [Paul Irish](http://paulirish.com/),
     <input type="email" name="email" placeholder="e.g. address@example.ext">
     <input type="url" name="url" placeholder="e.g. http://mathiasbynens.be/">
     <input type="tel" name="tel" placeholder="e.g. +32 472 77 69 88">
+    <input type="password" name="password" placeholder="e.g. h4x0rpr00fz">
     <input type="search" name="search" placeholder="Search this site…">
     <textarea name="message" placeholder="Your message goes here"></textarea>
 
@@ -30,8 +31,8 @@ The plugin automatically adds `class="placeholder"` to the elements who are curr
 
 ## Notes
 
+* Works in all A-grade browsers, including IE6.
 * The plugin automatically checks if the browser supports the HTML5 placeholder attribute for inputs natively. If this is the case, the plugin won’t do anything.
-* The plugin will ignore password inputs.
 
 ## Credits
 
diff --git a/jquery.placeholder.js b/jquery.placeholder.js
index 2e46d05..fd8793c 100644
--- a/jquery.placeholder.js
+++ b/jquery.placeholder.js
@@ -1,5 +1,5 @@
 /*!
- * HTML5 Placeholder jQuery Plugin v1.2
+ * HTML5 Placeholder jQuery Plugin v1.3
  * @link http://github.com/mathiasbynens/Placeholder-jQuery-Plugin
  * @author Mathias Bynens <http://mathiasbynens.be/>
  */
@@ -9,17 +9,50 @@
   if (this[0] && 'placeholder' in document.createElement('input')) {
    // Allow chaining
    return this;
-  };
+  }
+  function args($elem) {
+   // Get attributes string from outerHTML
+   var html = $('<div>').append($elem.clone()).html().replace(/<(\w+)\s+(.*)>/, '$2'),
+       attr,
+       attrs = {};
+   while ((attr = html.match(/\s*([\w-]+)=("[^"]*"|'[^']*'|\w+)/))) {
+    // Assign attribute to dictionary, but remove quotes first
+    attrs[attr[1]] = attr[2].replace(/^(["'])(.*?)\1$/, '$2');
+    html = html.replace(attr[0], '');
+   }
+   return attrs;
+  }
+  function onFocus() {
+   var $input = $(this);
+   if ($input.val() === $input.attr('placeholder') && $input.hasClass('placeholder')) {
+    if ($input.data('placeholder-password')) {
+     $input.next().show().focus().end().remove();
+    } else {
+     $input.val('').removeClass('placeholder');
+    }
+   }
+  }
   // Made this a function, because we actually need it on two different occasions:
   // 1) Once when the DOM is loaded;
   // 2) Once every time the focusout() is triggered.
   function setPlaceholder($elem) {
+   var $replacement;
    if ($elem.val() === '' || $elem.val() === $elem.attr('placeholder')) {
+    if ($elem.is(':password')) {
+     try {
+      $replacement = $elem.clone().attr({ type: 'text' });
+     } catch(e) {
+      $replacement = $('<input>', $.extend(args($elem), { type: 'text' }));
+     }
+     $replacement.data('placeholder-password', true).focus(onFocus);
+     $elem.hide().before($replacement);
+     $elem = $replacement;
+    }
     $elem.addClass('placeholder').val($elem.attr('placeholder'));
    } else {
     $elem.removeClass('placeholder');
-   };
-  };
+   }
+  }
   // Look for forms with inputs and/or textareas with a placeholder attribute in them
   $('form:has([placeholder])').submit(function() {
    // Clear the placeholder values so they don’t get submitted
@@ -32,16 +65,12 @@
   // Yes, .each() — in case .placeholder() is called on several elements, which is very likely, e.g. $('input').placeholder();
   return this.each(function() {
    var $input = $(this);
-   // Quit if the current element is a password input, or not an input/textarea at all
-   if ($input.is(':password') || !$input.is(':input')) {
+   // Quit if the current element is not an input/textarea at all
+   if (!$input.is(':input')) {
     return;
-   };
+   }
    setPlaceholder($input);
-   $input.focus(function() {
-    if ($input.val() === $input.attr('placeholder')) {
-     $input.val('').removeClass('placeholder');
-    };
-   }).blur(function() {
+   $input.focus(onFocus).blur(function() {
     setPlaceholder($input);
    });
   });
diff --git a/jquery.placeholder.min.js b/jquery.placeholder.min.js
index 16b2e34..a77d3c0 100644
--- a/jquery.placeholder.min.js
+++ b/jquery.placeholder.min.js
@@ -1,6 +1,6 @@
 /*!
- * HTML5 Placeholder jQuery Plugin v1.2
+ * HTML5 Placeholder jQuery Plugin v1.3
  * @link http://github.com/mathiasbynens/Placeholder-jQuery-Plugin
  * @author Mathias Bynens <http://mathiasbynens.be/>
  */
-(function(a){a.fn.placeholder=function(){if(this[0]&&'placeholder' in document.createElement('input')){return this}function b(c){if(c.val()===''||c.val()===c.attr('placeholder')){c.addClass('placeholder').val(c.attr('placeholder'))}else{c.removeClass('placeholder')}}a('form:has([placeholder])').submit(function(){a('.placeholder',this).val('')});a(window).unload(function(){a('.placeholder').val('')});return this.each(function(){var c=a(this);if(c.is(':password')||!c.is(':input')){return}b(c);c.focus(function(){if(c.val()===c.attr('placeholder')){c.val('').removeClass('placeholder')}}).blur(function(){b(c)})})}})(jQuery);
\ No newline at end of file
+(function(a){a.fn.placeholder=function(){if(this[0]&&'placeholder' in document.createElement('input')){return this}function b(f){var h=a('<div>').append(f.clone()).html().replace(/<(\w+)\s+(.*)>/,'$2'),e,g={};while((e=h.match(/\s*([\w-]+)=("[^"]*"|'[^']*'|\w+)/))){g[e[1]]=e[2].replace(/^(["'])(.*?)\1$/,'$2');h=h.replace(e[0],'')}return g}function c(){var e=a(this);if(e.val()===e.attr('placeholder')&&e.hasClass('placeholder')){if(e.data('placeholder-password')){e.next().show().focus().end().remove()}else{e.val('').removeClass('placeholder')}}}function d(f){var h;if(f.val()===''||f.val()===f.attr('placeholder')){if(f.is(':password')){try{h=f.clone().attr({type:'text'})}catch(g){h=a('<input>',a.extend(b(f),{type:'text'}))}h.data('placeholder-password',true).focus(c);f.hide().before(h);f=h}f.addClass('placeholder').val(f.attr('placeholder'))}else{f.removeClass('placeholder')}}a('form:has([placeholder])').submit(function(){a('.placeholder',this).val('')});a(window).unload(function(){a('.placeholder').val('')});return this.each(function(){var e=a(this);if(!e.is(':input')){return}d(e);e.focus(c).blur(function(){d(e)})})}})(jQuery);
\ No newline at end of file