diff --git a/src/Components/CreateImageWizard/steps/Review/components/NoUsersAlert.tsx b/src/Components/CreateImageWizard/steps/Review/components/NoUsersAlert.tsx
new file mode 100644
index 0000000000..8d99cd854b
--- /dev/null
+++ b/src/Components/CreateImageWizard/steps/Review/components/NoUsersAlert.tsx
@@ -0,0 +1,40 @@
+import React from 'react';
+
+import { Alert, Content } from '@patternfly/react-core';
+
+import { useAppSelector } from '@/store/hooks';
+import {
+  selectImageTypes,
+  selectIsImageMode,
+  selectUsers,
+  type SupportedImageTypes,
+} from '@/store/slices/wizard';
+
+const DISK_IMAGE_TYPES: SupportedImageTypes[] = ['guest-image', 'aws', 'ami'];
+
+const NoUsersAlert = () => {
+  const isImageMode = useAppSelector(selectIsImageMode);
+  const imageTypes = useAppSelector(selectImageTypes);
+  const users = useAppSelector(selectUsers);
+
+  const hasUser = users.some((user) => (user.name || '').trim() !== '');
+  const isDiskImage = imageTypes.some((imageType) =>
+    DISK_IMAGE_TYPES.includes(imageType),
+  );
+
+  if (!isImageMode || !isDiskImage || hasUser) {
+    return null;
+  }
+
+  return (
+    <Alert variant='warning' isInline title='No users added' ouiaId='NoUsers'>
+      <Content component='p'>
+        This image has no user accounts, so you won&apos;t be able to log in to
+        it directly. To log in, use cloud-init to create a user when you launch
+        the image, or go back to the Users step and add one now.
+      </Content>
+    </Alert>
+  );
+};
+
+export default NoUsersAlert;
diff --git a/src/Components/CreateImageWizard/steps/Review/components/index.ts b/src/Components/CreateImageWizard/steps/Review/components/index.ts
index 636233723a..630bf434ff 100644
--- a/src/Components/CreateImageWizard/steps/Review/components/index.ts
+++ b/src/Components/CreateImageWizard/steps/Review/components/index.ts
@@ -3,5 +3,6 @@ export { default as ContentOverview } from './Content';
 export { default as ImageOverview } from './ImageOverview';
 export { default as RepeatableBuild } from './RepeatableBuild';
 export { default as Registration } from './Registration';
+export { default as NoUsersAlert } from './NoUsersAlert';
 export { default as ReadyToBuildAlert } from './ReadyToBuildAlert';
 export { default as Security } from './Security';
diff --git a/src/Components/CreateImageWizard/steps/Review/components/tests/NoUsersAlert.test.tsx b/src/Components/CreateImageWizard/steps/Review/components/tests/NoUsersAlert.test.tsx
new file mode 100644
index 0000000000..06ca554f9a
--- /dev/null
+++ b/src/Components/CreateImageWizard/steps/Review/components/tests/NoUsersAlert.test.tsx
@@ -0,0 +1,79 @@
+import React from 'react';
+
+import { screen } from '@testing-library/react';
+
+import { initialState } from '@/store/slices/wizard';
+import { renderWithRedux, type WizardStateOverrides } from '@/test/testUtils';
+
+import NoUsersAlert from '../NoUsersAlert';
+
+const testUser = {
+  name: 'testuser',
+  password: '',
+  ssh_key: '',
+  isAdministrator: false,
+  groups: [],
+  hasPassword: false,
+};
+
+const imageModeOverrides = (
+  overrides: WizardStateOverrides = {},
+): WizardStateOverrides => ({
+  details: {
+    ...initialState.details,
+    blueprint: { ...initialState.details.blueprint, mode: 'image' },
+  },
+  output: {
+    ...initialState.output,
+    imageTypes: ['guest-image'],
+  },
+  ...overrides,
+});
+
+describe('NoUsersAlert', () => {
+  test('warns when a disk image has no users', async () => {
+    renderWithRedux(<NoUsersAlert />, imageModeOverrides());
+
+    expect(await screen.findByText(/no users added/i)).toBeInTheDocument();
+    expect(screen.getByText(/cloud-init/i)).toBeInTheDocument();
+  });
+
+  test('does not warn for the container installer', () => {
+    renderWithRedux(
+      <NoUsersAlert />,
+      imageModeOverrides({
+        output: {
+          ...initialState.output,
+          imageTypes: ['bootable-container-iso'],
+        },
+      }),
+    );
+
+    expect(screen.queryByText(/no users added/i)).not.toBeInTheDocument();
+  });
+
+  test('does not warn when a user is configured', () => {
+    renderWithRedux(
+      <NoUsersAlert />,
+      imageModeOverrides({
+        system: {
+          ...initialState.system,
+          users: [testUser],
+        },
+      }),
+    );
+
+    expect(screen.queryByText(/no users added/i)).not.toBeInTheDocument();
+  });
+
+  test('does not warn in package mode', () => {
+    renderWithRedux(<NoUsersAlert />, {
+      output: {
+        ...initialState.output,
+        imageTypes: ['guest-image'],
+      },
+    });
+
+    expect(screen.queryByText(/no users added/i)).not.toBeInTheDocument();
+  });
+});
diff --git a/src/Components/CreateImageWizard/steps/Review/index.tsx b/src/Components/CreateImageWizard/steps/Review/index.tsx
index c437367b05..2e1b82c8e1 100644
--- a/src/Components/CreateImageWizard/steps/Review/index.tsx
+++ b/src/Components/CreateImageWizard/steps/Review/index.tsx
@@ -9,6 +9,7 @@ import {
   AdvancedSettingsOverview,
   ContentOverview,
   ImageOverview,
+  NoUsersAlert,
   ReadyToBuildAlert,
   Registration,
   RepeatableBuild,
@@ -33,6 +34,7 @@ const ReviewStep = () => {
   return (
     <>
       <FormHeader />
+      <NoUsersAlert />
       <ImageOverview restrictions={restrictions} />
       <Registration restrictions={restrictions} />
       <RepeatableBuild restrictions={restrictions} />
diff --git a/src/Components/CreateImageWizard/steps/Users/index.tsx b/src/Components/CreateImageWizard/steps/Users/index.tsx
index b45498ae30..8f70d01201 100644
--- a/src/Components/CreateImageWizard/steps/Users/index.tsx
+++ b/src/Components/CreateImageWizard/steps/Users/index.tsx
@@ -5,7 +5,6 @@ import { Content, Title } from '@patternfly/react-core';
 import { CustomizationLabels } from '@/Components/sharedComponents/CustomizationLabels';
 import { useAppSelector } from '@/store/hooks';
 import { selectIsOnPremise } from '@/store/slices/env';
-import { selectBlueprintMode } from '@/store/slices/wizard';
 
 import UserInfo from './components/UserInfo';
 
@@ -14,7 +13,6 @@ type UsersStepProps = {
 };
 
 const UsersStep = ({ attemptedNext }: UsersStepProps) => {
-  const blueprintMode = useAppSelector(selectBlueprintMode);
   const isOnPremise = useAppSelector(selectIsOnPremise);
   return (
     <>
@@ -27,9 +25,16 @@ const UsersStep = ({ attemptedNext }: UsersStepProps) => {
           Create user accounts to manage access to your image. All usernames
           must be unique.
           {/* TO DO: learn more about accessing your SSH keys link */}
-          {isOnPremise &&
-            blueprintMode === 'image' &&
-            ' You must create a user during the image build process to be able to log in.'}
+          {isOnPremise && (
+            <>
+              {' '}
+              Passwords are stored in plain text on this host. To store a hashed
+              password instead, generate one with <code>
+                openssl passwd -6
+              </code>{' '}
+              and enter the result.
+            </>
+          )}
         </Content>
       </Content>
       <UserInfo attemptedNext={attemptedNext} />
diff --git a/src/Components/CreateImageWizard/steps/Users/tests/Users.test.tsx b/src/Components/CreateImageWizard/steps/Users/tests/Users.test.tsx
index 9fb6552f2a..075a89e257 100644
--- a/src/Components/CreateImageWizard/steps/Users/tests/Users.test.tsx
+++ b/src/Components/CreateImageWizard/steps/Users/tests/Users.test.tsx
@@ -96,4 +96,33 @@ describe('Users Component', () => {
       );
     });
   });
+
+  describe('Password guidance', () => {
+    test('shows plain text warning and openssl hint on-prem', async () => {
+      renderWithRedux(
+        <UsersStep />,
+        {},
+        {
+          preloadedState: {
+            env: { isOnPremise: true },
+          },
+        },
+      );
+
+      expect(
+        await screen.findByText(/stored in plain text on this host/i),
+      ).toBeInTheDocument();
+      expect(screen.getByText('openssl passwd -6')).toBeInTheDocument();
+    });
+
+    test('does not show the plain text warning in the hosted service', async () => {
+      renderWithRedux(<UsersStep />, {});
+
+      await screen.findByText(/create user accounts/i);
+
+      expect(
+        screen.queryByText(/stored in plain text/i),
+      ).not.toBeInTheDocument();
+    });
+  });
 });
diff --git a/src/Components/CreateImageWizard/utilities/useValidation.tsx b/src/Components/CreateImageWizard/utilities/useValidation.tsx
index 1df52e35ea..ec7826edb5 100644
--- a/src/Components/CreateImageWizard/utilities/useValidation.tsx
+++ b/src/Components/CreateImageWizard/utilities/useValidation.tsx
@@ -881,8 +881,6 @@ const validateSshKey = (userSshKey: string): string => {
 
 export function useUsersValidation(): UsersStepValidation {
   const environments = useAppSelector(selectImageTypes);
-  const blueprintMode = useAppSelector(selectBlueprintMode);
-  const isOnPremise = useAppSelector(selectIsOnPremise);
   const users = useAppSelector(selectUsers);
   const userGroups = useAppSelector(selectUserGroups);
   const errors: { [key: string]: { [key: string]: string } } = {};
@@ -891,14 +889,6 @@ export function useUsersValidation(): UsersStepValidation {
     users.length === 0 ||
     (users.length === 1 && (users[0].name || '').trim() === '')
   ) {
-    if (isOnPremise && blueprintMode === 'image') {
-      return {
-        errors: {},
-        warnings: {},
-        disabledNext: true,
-      };
-    }
-
     return {
       errors: {},
       warnings: {},