diff --git a/homeassistant/components/habitica/__init__.py b/homeassistant/components/habitica/__init__.py
index 468db8fbc4251e..bcf8713f9b1001 100644
--- a/homeassistant/components/habitica/__init__.py
+++ b/homeassistant/components/habitica/__init__.py
@@ -15,6 +15,7 @@
     CONF_NAME,
     CONF_SENSORS,
     CONF_URL,
+    CONF_VERIFY_SSL,
     Platform,
 )
 from homeassistant.core import HomeAssistant, ServiceCall
@@ -125,6 +126,7 @@ async def handle_api_call(call: ServiceCall) -> None:
         name = call.data[ATTR_NAME]
         path = call.data[ATTR_PATH]
         entries = hass.config_entries.async_entries(DOMAIN)
+
         api = None
         for entry in entries:
             if entry.data[CONF_NAME] == name:
@@ -147,18 +149,16 @@ async def handle_api_call(call: ServiceCall) -> None:
             EVENT_API_CALL_SUCCESS, {ATTR_NAME: name, ATTR_PATH: path, ATTR_DATA: data}
         )
 
-    websession = async_get_clientsession(hass)
-
-    url = config_entry.data[CONF_URL]
-    username = config_entry.data[CONF_API_USER]
-    password = config_entry.data[CONF_API_KEY]
+    websession = async_get_clientsession(
+        hass, verify_ssl=config_entry.data.get(CONF_VERIFY_SSL, True)
+    )
 
     api = await hass.async_add_executor_job(
         HAHabitipyAsync,
         {
-            "url": url,
-            "login": username,
-            "password": password,
+            "url": config_entry.data[CONF_URL],
+            "login": config_entry.data[CONF_API_USER],
+            "password": config_entry.data[CONF_API_KEY],
         },
     )
     try:
diff --git a/homeassistant/components/habitica/config_flow.py b/homeassistant/components/habitica/config_flow.py
index a40261c09021f7..2947032c41ef76 100644
--- a/homeassistant/components/habitica/config_flow.py
+++ b/homeassistant/components/habitica/config_flow.py
@@ -2,6 +2,7 @@
 
 from __future__ import annotations
 
+from http import HTTPStatus
 import logging
 from typing import Any
 
@@ -10,46 +11,51 @@
 import voluptuous as vol
 
 from homeassistant.config_entries import ConfigFlow, ConfigFlowResult
-from homeassistant.const import CONF_API_KEY, CONF_NAME, CONF_URL
-from homeassistant.core import DOMAIN as HOMEASSISTANT_DOMAIN, HomeAssistant
-from homeassistant.exceptions import HomeAssistantError
+from homeassistant.const import (
+    CONF_API_KEY,
+    CONF_PASSWORD,
+    CONF_URL,
+    CONF_USERNAME,
+    CONF_VERIFY_SSL,
+)
+from homeassistant.core import DOMAIN as HOMEASSISTANT_DOMAIN
 from homeassistant.helpers.aiohttp_client import async_get_clientsession
 from homeassistant.helpers.issue_registry import IssueSeverity, async_create_issue
+from homeassistant.helpers.selector import (
+    TextSelector,
+    TextSelectorConfig,
+    TextSelectorType,
+)
 
 from .const import CONF_API_USER, DEFAULT_URL, DOMAIN
 
-DATA_SCHEMA = vol.Schema(
+STEP_ADVANCED_DATA_SCHEMA = vol.Schema(
     {
         vol.Required(CONF_API_USER): str,
         vol.Required(CONF_API_KEY): str,
-        vol.Optional(CONF_NAME): str,
         vol.Optional(CONF_URL, default=DEFAULT_URL): str,
+        vol.Required(CONF_VERIFY_SSL, default=True): bool,
     }
 )
 
-_LOGGER = logging.getLogger(__name__)
-
+STEP_LOGIN_DATA_SCHEMA = vol.Schema(
+    {
+        vol.Required(CONF_USERNAME): TextSelector(
+            TextSelectorConfig(
+                type=TextSelectorType.EMAIL,
+                autocomplete="email",
+            )
+        ),
+        vol.Required(CONF_PASSWORD): TextSelector(
+            TextSelectorConfig(
+                type=TextSelectorType.PASSWORD,
+                autocomplete="current-password",
+            )
+        ),
+    }
+)
 
-async def validate_input(hass: HomeAssistant, data: dict[str, str]) -> dict[str, str]:
-    """Validate the user input allows us to connect."""
-
-    websession = async_get_clientsession(hass)
-    api = await hass.async_add_executor_job(
-        HabitipyAsync,
-        {
-            "login": data[CONF_API_USER],
-            "password": data[CONF_API_KEY],
-            "url": data[CONF_URL] or DEFAULT_URL,
-        },
-    )
-    try:
-        await api.user.get(session=websession)
-        return {
-            "title": f"{data.get('name', 'Default username')}",
-            CONF_API_USER: data[CONF_API_USER],
-        }
-    except ClientResponseError as ex:
-        raise InvalidAuth from ex
+_LOGGER = logging.getLogger(__name__)
 
 
 class HabiticaConfigFlow(ConfigFlow, domain=DOMAIN):
@@ -62,24 +68,115 @@ async def async_step_user(
     ) -> ConfigFlowResult:
         """Handle the initial step."""
 
-        errors = {}
+        return self.async_show_menu(
+            step_id="user",
+            menu_options=["login", "advanced"],
+        )
+
+    async def async_step_login(
+        self, user_input: dict[str, Any] | None = None
+    ) -> ConfigFlowResult:
+        """Config flow with username/password.
+
+        Simplified configuration setup that retrieves API credentials
+        from Habitica.com by authenticating with login and password.
+        """
+        errors: dict[str, str] = {}
         if user_input is not None:
             try:
-                info = await validate_input(self.hass, user_input)
-            except InvalidAuth:
-                errors = {"base": "invalid_credentials"}
+                session = async_get_clientsession(self.hass)
+                api = await self.hass.async_add_executor_job(
+                    HabitipyAsync,
+                    {
+                        "login": "",
+                        "password": "",
+                        "url": DEFAULT_URL,
+                    },
+                )
+                login_response = await api.user.auth.local.login.post(
+                    session=session,
+                    username=user_input[CONF_USERNAME],
+                    password=user_input[CONF_PASSWORD],
+                )
+
+            except ClientResponseError as ex:
+                if ex.status == HTTPStatus.UNAUTHORIZED:
+                    errors["base"] = "invalid_auth"
+                else:
+                    errors["base"] = "cannot_connect"
             except Exception:
                 _LOGGER.exception("Unexpected exception")
-                errors = {"base": "unknown"}
+                errors["base"] = "unknown"
             else:
-                await self.async_set_unique_id(info[CONF_API_USER])
+                await self.async_set_unique_id(login_response["id"])
                 self._abort_if_unique_id_configured()
-                return self.async_create_entry(title=info["title"], data=user_input)
+                return self.async_create_entry(
+                    title=login_response["username"],
+                    data={
+                        CONF_API_USER: login_response["id"],
+                        CONF_API_KEY: login_response["apiToken"],
+                        CONF_USERNAME: login_response["username"],
+                        CONF_URL: DEFAULT_URL,
+                        CONF_VERIFY_SSL: True,
+                    },
+                )
+
         return self.async_show_form(
-            step_id="user",
-            data_schema=DATA_SCHEMA,
+            step_id="login",
+            data_schema=self.add_suggested_values_to_schema(
+                data_schema=STEP_LOGIN_DATA_SCHEMA, suggested_values=user_input
+            ),
+            errors=errors,
+        )
+
+    async def async_step_advanced(
+        self, user_input: dict[str, Any] | None = None
+    ) -> ConfigFlowResult:
+        """Advanced configuration with User Id and API Token.
+
+        Advanced configuration allows connecting to Habitica instances
+        hosted on different domains or to self-hosted instances.
+        """
+        errors: dict[str, str] = {}
+        if user_input is not None:
+            try:
+                session = async_get_clientsession(
+                    self.hass, verify_ssl=user_input.get(CONF_VERIFY_SSL, True)
+                )
+                api = await self.hass.async_add_executor_job(
+                    HabitipyAsync,
+                    {
+                        "login": user_input[CONF_API_USER],
+                        "password": user_input[CONF_API_KEY],
+                        "url": user_input.get(CONF_URL, DEFAULT_URL),
+                    },
+                )
+                api_response = await api.user.get(
+                    session=session,
+                    userFields="auth",
+                )
+            except ClientResponseError as ex:
+                if ex.status == HTTPStatus.UNAUTHORIZED:
+                    errors["base"] = "invalid_auth"
+                else:
+                    errors["base"] = "cannot_connect"
+            except Exception:
+                _LOGGER.exception("Unexpected exception")
+                errors["base"] = "unknown"
+            else:
+                await self.async_set_unique_id(user_input[CONF_API_USER])
+                self._abort_if_unique_id_configured()
+                user_input[CONF_USERNAME] = api_response["auth"]["local"]["username"]
+                return self.async_create_entry(
+                    title=user_input[CONF_USERNAME], data=user_input
+                )
+
+        return self.async_show_form(
+            step_id="advanced",
+            data_schema=self.add_suggested_values_to_schema(
+                data_schema=STEP_ADVANCED_DATA_SCHEMA, suggested_values=user_input
+            ),
             errors=errors,
-            description_placeholders={},
         )
 
     async def async_step_import(self, import_data: dict[str, Any]) -> ConfigFlowResult:
@@ -98,8 +195,4 @@ async def async_step_import(self, import_data: dict[str, Any]) -> ConfigFlowResu
                 "integration_title": "Habitica",
             },
         )
-        return await self.async_step_user(import_data)
-
-
-class InvalidAuth(HomeAssistantError):
-    """Error to indicate there is invalid auth."""
+        return await self.async_step_advanced(import_data)
diff --git a/homeassistant/components/habitica/strings.json b/homeassistant/components/habitica/strings.json
index 21d2622245c837..c5a54d254cc232 100644
--- a/homeassistant/components/habitica/strings.json
+++ b/homeassistant/components/habitica/strings.json
@@ -4,18 +4,32 @@
       "already_configured": "[%key:common::config_flow::abort::already_configured_account%]"
     },
     "error": {
-      "invalid_credentials": "[%key:common::config_flow::error::invalid_auth%]",
+      "cannot_connect": "[%key:common::config_flow::error::cannot_connect%]",
+      "invalid_auth": "[%key:common::config_flow::error::invalid_auth%]",
       "unknown": "[%key:common::config_flow::error::unknown%]"
     },
     "step": {
       "user": {
+        "menu_options": {
+          "login": "Login to Habitica",
+          "advanced": "Login to other instances"
+        },
+        "description": "Connect your Habitica profile to allow monitoring of your user's profile and tasks."
+      },
+      "login": {
+        "data": {
+          "username": "Email or username (case-sensitive)",
+          "password": "[%key:common::config_flow::data::password%]"
+        }
+      },
+      "advanced": {
         "data": {
           "url": "[%key:common::config_flow::data::url%]",
-          "name": "Override for Habitica’s username. Will be used for actions",
-          "api_user": "Habitica’s API user ID",
-          "api_key": "[%key:common::config_flow::data::api_key%]"
+          "api_user": "User ID",
+          "api_key": "API Token",
+          "verify_ssl": "[%key:common::config_flow::data::verify_ssl%]"
         },
-        "description": "Connect your Habitica profile to allow monitoring of your user's profile and tasks. Note that api_id and api_key must be gotten from https://habitica.com/user/settings/api"
+        "description": "You can retrieve your `User ID` and `API Token` from **Settings -> Site Data** on Habitica or the instance you want to connect to"
       }
     }
   },
diff --git a/tests/components/habitica/test_config_flow.py b/tests/components/habitica/test_config_flow.py
index 4dfc696daf2998..09cda3fbb0a005 100644
--- a/tests/components/habitica/test_config_flow.py
+++ b/tests/components/habitica/test_config_flow.py
@@ -3,27 +3,59 @@
 from unittest.mock import AsyncMock, MagicMock, patch
 
 from aiohttp import ClientResponseError
+import pytest
 
 from homeassistant import config_entries
-from homeassistant.components.habitica.const import DEFAULT_URL, DOMAIN
+from homeassistant.components.habitica.const import CONF_API_USER, DEFAULT_URL, DOMAIN
+from homeassistant.const import (
+    CONF_API_KEY,
+    CONF_PASSWORD,
+    CONF_URL,
+    CONF_USERNAME,
+    CONF_VERIFY_SSL,
+)
 from homeassistant.core import HomeAssistant
 from homeassistant.data_entry_flow import FlowResultType
 
 from tests.common import MockConfigEntry
 
+MOCK_DATA_LOGIN_STEP = {
+    CONF_USERNAME: "test-email@example.com",
+    CONF_PASSWORD: "test-password",
+}
+MOCK_DATA_ADVANCED_STEP = {
+    CONF_API_USER: "test-api-user",
+    CONF_API_KEY: "test-api-key",
+    CONF_URL: DEFAULT_URL,
+    CONF_VERIFY_SSL: True,
+}
 
-async def test_form(hass: HomeAssistant) -> None:
-    """Test we get the form."""
+
+async def test_form_login(hass: HomeAssistant) -> None:
+    """Test we get the login form."""
 
     result = await hass.config_entries.flow.async_init(
         DOMAIN, context={"source": config_entries.SOURCE_USER}
     )
+
+    assert result["type"] is FlowResultType.MENU
+    assert "login" in result["menu_options"]
+    assert result["step_id"] == "user"
+
+    result = await hass.config_entries.flow.async_init(
+        DOMAIN, context={"source": "login"}
+    )
     assert result["type"] is FlowResultType.FORM
     assert result["errors"] == {}
+    assert result["step_id"] == "login"
 
     mock_obj = MagicMock()
-    mock_obj.user.get = AsyncMock()
-
+    mock_obj.user.auth.local.login.post = AsyncMock()
+    mock_obj.user.auth.local.login.post.return_value = {
+        "id": "test-api-user",
+        "apiToken": "test-api-key",
+        "username": "test-username",
+    }
     with (
         patch(
             "homeassistant.components.habitica.config_flow.HabitipyAsync",
@@ -37,57 +69,142 @@ async def test_form(hass: HomeAssistant) -> None:
             return_value=True,
         ) as mock_setup_entry,
     ):
-        result2 = await hass.config_entries.flow.async_configure(
+        result = await hass.config_entries.flow.async_configure(
             result["flow_id"],
-            {"api_user": "test-api-user", "api_key": "test-api-key"},
+            user_input=MOCK_DATA_LOGIN_STEP,
         )
         await hass.async_block_till_done()
 
-    assert result2["type"] is FlowResultType.CREATE_ENTRY
-    assert result2["title"] == "Default username"
-    assert result2["data"] == {
-        "url": DEFAULT_URL,
-        "api_user": "test-api-user",
-        "api_key": "test-api-key",
+    assert result["type"] is FlowResultType.CREATE_ENTRY
+    assert result["title"] == "test-username"
+    assert result["data"] == {
+        **MOCK_DATA_ADVANCED_STEP,
+        CONF_USERNAME: "test-username",
     }
     assert len(mock_setup.mock_calls) == 1
     assert len(mock_setup_entry.mock_calls) == 1
 
 
-async def test_form_invalid_credentials(hass: HomeAssistant) -> None:
+@pytest.mark.parametrize(
+    ("raise_error", "text_error"),
+    [
+        (ClientResponseError(MagicMock(), (), status=400), "cannot_connect"),
+        (ClientResponseError(MagicMock(), (), status=401), "invalid_auth"),
+        (IndexError(), "unknown"),
+    ],
+)
+async def test_form_login_errors(hass: HomeAssistant, raise_error, text_error) -> None:
     """Test we handle invalid credentials error."""
+
     result = await hass.config_entries.flow.async_init(
         DOMAIN, context={"source": config_entries.SOURCE_USER}
     )
 
-    mock_obj = MagicMock()
-    mock_obj.user.get = AsyncMock(side_effect=ClientResponseError(MagicMock(), ()))
+    assert result["type"] is FlowResultType.MENU
+    assert result["step_id"] == "user"
 
+    result = await hass.config_entries.flow.async_init(
+        DOMAIN, context={"source": "login"}
+    )
+
+    mock_obj = MagicMock()
+    mock_obj.user.auth.local.login.post = AsyncMock(side_effect=raise_error)
     with patch(
         "homeassistant.components.habitica.config_flow.HabitipyAsync",
         return_value=mock_obj,
     ):
         result2 = await hass.config_entries.flow.async_configure(
             result["flow_id"],
-            {
-                "url": DEFAULT_URL,
-                "api_user": "test-api-user",
-                "api_key": "test-api-key",
-            },
+            user_input=MOCK_DATA_LOGIN_STEP,
         )
 
     assert result2["type"] is FlowResultType.FORM
-    assert result2["errors"] == {"base": "invalid_credentials"}
+    assert result2["errors"] == {"base": text_error}
+
 
+async def test_form_advanced(hass: HomeAssistant) -> None:
+    """Test we get the form."""
 
-async def test_form_unexpected_exception(hass: HomeAssistant) -> None:
-    """Test we handle unexpected exception error."""
     result = await hass.config_entries.flow.async_init(
         DOMAIN, context={"source": config_entries.SOURCE_USER}
     )
 
+    assert result["type"] is FlowResultType.MENU
+    assert "advanced" in result["menu_options"]
+    assert result["step_id"] == "user"
+
+    result = await hass.config_entries.flow.async_init(
+        DOMAIN, context={"source": "advanced"}
+    )
+    assert result["type"] is FlowResultType.FORM
+    assert result["errors"] == {}
+    assert result["step_id"] == "advanced"
+
+    result = await hass.config_entries.flow.async_init(
+        DOMAIN, context={"source": "advanced"}
+    )
+    assert result["type"] is FlowResultType.FORM
+    assert result["errors"] == {}
+
     mock_obj = MagicMock()
-    mock_obj.user.get = AsyncMock(side_effect=Exception)
+    mock_obj.user.get = AsyncMock()
+    mock_obj.user.get.return_value = {"auth": {"local": {"username": "test-username"}}}
+
+    with (
+        patch(
+            "homeassistant.components.habitica.config_flow.HabitipyAsync",
+            return_value=mock_obj,
+        ),
+        patch(
+            "homeassistant.components.habitica.async_setup", return_value=True
+        ) as mock_setup,
+        patch(
+            "homeassistant.components.habitica.async_setup_entry",
+            return_value=True,
+        ) as mock_setup_entry,
+    ):
+        result2 = await hass.config_entries.flow.async_configure(
+            result["flow_id"],
+            user_input=MOCK_DATA_ADVANCED_STEP,
+        )
+        await hass.async_block_till_done()
+
+    assert result2["type"] is FlowResultType.CREATE_ENTRY
+    assert result2["title"] == "test-username"
+    assert result2["data"] == {
+        **MOCK_DATA_ADVANCED_STEP,
+        CONF_USERNAME: "test-username",
+    }
+    assert len(mock_setup.mock_calls) == 1
+    assert len(mock_setup_entry.mock_calls) == 1
+
+
+@pytest.mark.parametrize(
+    ("raise_error", "text_error"),
+    [
+        (ClientResponseError(MagicMock(), (), status=400), "cannot_connect"),
+        (ClientResponseError(MagicMock(), (), status=401), "invalid_auth"),
+        (IndexError(), "unknown"),
+    ],
+)
+async def test_form_advanced_errors(
+    hass: HomeAssistant, raise_error, text_error
+) -> None:
+    """Test we handle invalid credentials error."""
+
+    result = await hass.config_entries.flow.async_init(
+        DOMAIN, context={"source": config_entries.SOURCE_USER}
+    )
+
+    assert result["type"] is FlowResultType.MENU
+    assert result["step_id"] == "user"
+
+    result = await hass.config_entries.flow.async_init(
+        DOMAIN, context={"source": "advanced"}
+    )
+
+    mock_obj = MagicMock()
+    mock_obj.user.get = AsyncMock(side_effect=raise_error)
 
     with patch(
         "homeassistant.components.habitica.config_flow.HabitipyAsync",
@@ -95,15 +212,11 @@ async def test_form_unexpected_exception(hass: HomeAssistant) -> None:
     ):
         result2 = await hass.config_entries.flow.async_configure(
             result["flow_id"],
-            {
-                "url": DEFAULT_URL,
-                "api_user": "test-api-user",
-                "api_key": "test-api-key",
-            },
+            user_input=MOCK_DATA_ADVANCED_STEP,
         )
 
     assert result2["type"] is FlowResultType.FORM
-    assert result2["errors"] == {"base": "unknown"}
+    assert result2["errors"] == {"base": text_error}
 
 
 async def test_manual_flow_config_exist(hass: HomeAssistant) -> None:
@@ -119,7 +232,7 @@ async def test_manual_flow_config_exist(hass: HomeAssistant) -> None:
     )
 
     assert result["type"] is FlowResultType.FORM
-    assert result["step_id"] == "user"
+    assert result["step_id"] == "advanced"
 
     mock_obj = MagicMock()
     mock_obj.user.get = AsyncMock(return_value={"api_user": "test-api-user"})
diff --git a/tests/components/habitica/test_init.py b/tests/components/habitica/test_init.py
index 4c2b1e2aae61c6..56f17bc98893ce 100644
--- a/tests/components/habitica/test_init.py
+++ b/tests/components/habitica/test_init.py
@@ -52,6 +52,7 @@ def common_requests(aioclient_mock: AiohttpClientMocker) -> AiohttpClientMocker:
         "https://habitica.com/api/v3/user",
         json={
             "data": {
+                "auth": {"local": {"username": TEST_USER_NAME}},
                 "api_user": "test-api-user",
                 "profile": {"name": TEST_USER_NAME},
                 "stats": {