diff --git a/CHANGELOG b/CHANGELOG
index f9a0ce592..1fc8dac8a 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -1,3 +1,7 @@
+=== master
+
+* Support :connect_opts_proc Database option for late binding options (jeremyevans) (#2164)
+
 === 5.81.0 (2024-06-01)
 
 * Fix ignored block warnings in a couple plugin apply methods on Ruby 3.4 (jeremyevans)
diff --git a/doc/opening_databases.rdoc b/doc/opening_databases.rdoc
index 656ff6d5e..231a072e4 100644
--- a/doc/opening_databases.rdoc
+++ b/doc/opening_databases.rdoc
@@ -79,6 +79,9 @@ These options are shared by all adapters unless otherwise noted.
                or string with extensions separated by columns.  These extensions are loaded after
                connections are made by the :preconnect option.
 :cache_schema :: Whether schema should be cached for this database (true by default)
+:connect_opts_proc :: Callable object for modifying options hash used when connecting, designed for
+                      cases where the option values (e.g. password) are automatically rotated on
+                      a regular basis without involvement from the application using Sequel.
 :default_string_column_size :: The default size for string columns (255 by default)
 :host :: The hostname of the database server to which to connect
 :keep_reference :: Whether to keep a reference to the database in Sequel::DATABASES (true by default)
diff --git a/lib/sequel/database/connecting.rb b/lib/sequel/database/connecting.rb
index a7c659d34..6657b8a60 100644
--- a/lib/sequel/database/connecting.rb
+++ b/lib/sequel/database/connecting.rb
@@ -335,6 +335,11 @@ def server_opts(server)
       else
         @opts.dup
       end
+
+      if pr = opts[:connect_opts_proc]
+        pr.call(opts)
+      end
+
       opts.delete(:servers)
       opts
     end
diff --git a/lib/sequel/database/misc.rb b/lib/sequel/database/misc.rb
index f77e051e2..417bc465f 100644
--- a/lib/sequel/database/misc.rb
+++ b/lib/sequel/database/misc.rb
@@ -108,6 +108,9 @@ def self.uri_to_options(uri)
     # :cache_schema :: Whether schema should be cached for this Database instance
     # :check_string_typecast_bytesize :: Whether to check the bytesize of strings before typecasting.
     # :connect_sqls :: An array of sql strings to execute on each new connection, after :after_connect runs.
+    # :connect_opts_proc :: Callable object for modifying options hash used when connecting, designed for
+    #                       cases where the option values (e.g. password) are automatically rotated on
+    #                       a regular basis without involvement from the application using Sequel.
     # :default_string_column_size :: The default size of string columns, 255 by default.
     # :extensions :: Extensions to load into this Database instance.  Can be a symbol, array of symbols,
     #                or string with extensions separated by columns.  These extensions are loaded after
diff --git a/spec/core/database_spec.rb b/spec/core/database_spec.rb
index 8b485c3d5..339294c97 100644
--- a/spec/core/database_spec.rb
+++ b/spec/core/database_spec.rb
@@ -23,6 +23,21 @@
     Sequel::Database.new(1 => 2, :logger => [4], :loggers => [3]).loggers.must_equal [4,3]
   end
 
+  it "should support :connect_opts_proc option to modify options passed when connecting" do
+    c = Class.new(Sequel::Database) do
+      alias connect server_opts
+    end
+    opts = {:a => 1, :connect_opts_proc=>lambda{|h| h[:a] += 2; h[:b] = 4}}
+    c.new(opts).synchronize do |c|
+      c[:a].must_equal 3
+      c[:b].must_equal 4
+    end
+    c.new(opts.merge(:servers=>{:default=>{:a=>5}})).synchronize do |c|
+      c[:a].must_equal 7
+      c[:b].must_equal 4
+    end
+  end
+
   it "should support :preconnect option to preconnect to database" do
     @db.pool.size.must_equal 0
     c = Class.new(Sequel::Database) do