Username and Password authentication prompt

If you are repeatedly prompted for a user name and password when trying to open a Web site based on SharePoint Services, you may need to change the proxy settings in your Web browser. The problem occurs often in intranet-based sites that use accounts from the network domain.

SharePoint Services uses Microsoft Windows NT authentication to ensure that only users with valid user names and passwords may access the SharePoint team Web site. However, Internet proxy servers don’t support this authentication method, so you must bypass the proxy server for local (intranet) addresses.

Troubleshooting: I Keep Getting Prompted for a User Name and Password

Bypassing your proxy server for local addresses,
To bypass your Internet proxy for local addresses in Microsoft Internet Explorer 5 or later, complete the following steps:

1. On the Internet Explorer toolbar, click Tools, and then click Internet Options.
2. In the Internet Options dialog box, click the Connections tab, and then click LAN Settings.
3. Under Proxy server, select the Bypass proxy server for local addresses check box, and then click OK.

Adding a Web site to the list of trusted intranet sites,
If the problem persists, you may need to manually add the Web site to the list of trusted intranet sites. To do this, complete the following steps:

1. On the Internet Explorer toolbar, click Tools, and then click Internet Options.
2. In the Internet Options dialog box, click the Security tab, and then select Local intranet.
3. Click Sites, and then click Advanced.
4. Type the URL of the team Web site in the Add this Web site to the zone box, click Add, and then click OK.