diff --git a/packages/apps/src/microsoft_teams/apps/http/http_server.py b/packages/apps/src/microsoft_teams/apps/http/http_server.py
index 8aab280b..28f8f16e 100644
--- a/packages/apps/src/microsoft_teams/apps/http/http_server.py
+++ b/packages/apps/src/microsoft_teams/apps/http/http_server.py
@@ -77,6 +77,12 @@ def initialize(
         if app_id and not skip_auth:
             self._token_validator = TokenValidator.for_service(app_id)
             logger.debug("JWT validation enabled for %s", self._messaging_endpoint)
+        elif not skip_auth:
+            logger.warning(
+                "No credentials configured and skip_auth is not enabled. "
+                "All incoming requests will be rejected. Configure client authentication "
+                "to securely receive messages, or set skip_auth=True for local development."
+            )
 
         self._adapter.register_route("POST", self._messaging_endpoint, self.handle_request)
         self._initialized = True
@@ -90,24 +96,10 @@ async def handle_request(self, request: HttpRequest) -> HttpResponse:
             # Validate JWT token
             authorization = headers.get("authorization") or headers.get("Authorization") or ""
 
-            if self._token_validator and not self._skip_auth:
-                if not authorization.startswith("Bearer "):
-                    return HttpResponse(status=401, body={"error": "Unauthorized"})
-
-                raw_token = authorization.removeprefix("Bearer ")
+            if self._skip_auth:
+                # Auth explicitly skipped — use a default token
                 service_url = cast(Optional[str], body.get("serviceUrl"))
-
-                try:
-                    await self._token_validator.validate_token(raw_token, service_url)
-                except Exception as e:
-                    logger.warning(f"JWT token validation failed: {e}")
-                    return HttpResponse(status=401, body={"error": "Unauthorized"})
-
-                token: TokenProtocol = cast(TokenProtocol, JsonWebToken(value=raw_token))
-            else:
-                # No auth — use a default token
-                service_url = cast(Optional[str], body.get("serviceUrl"))
-                token = cast(
+                token: TokenProtocol = cast(
                     TokenProtocol,
                     SimpleNamespace(
                         app_id="",
@@ -119,6 +111,28 @@ async def handle_request(self, request: HttpRequest) -> HttpResponse:
                         is_expired=lambda: False,
                     ),
                 )
+            elif not self._token_validator:
+                # No credentials configured — reject the request
+                logger.error(
+                    "No credentials configured. Configure client authentication "
+                    "to securely receive messages, or set skip_auth=True to allow "
+                    "unauthenticated requests."
+                )
+                return HttpResponse(status=401, body={"error": "Authentication not configured"})
+            else:
+                if not authorization.startswith("Bearer "):
+                    return HttpResponse(status=401, body={"error": "Unauthorized"})
+
+                raw_token = authorization.removeprefix("Bearer ")
+                service_url = cast(Optional[str], body.get("serviceUrl"))
+
+                try:
+                    await self._token_validator.validate_token(raw_token, service_url)
+                except Exception as e:
+                    logger.warning("JWT token validation failed: %s", e)
+                    return HttpResponse(status=401, body={"error": "Unauthorized"})
+
+                token = cast(TokenProtocol, JsonWebToken(value=raw_token))
 
             core_activity = CoreActivity.model_validate(body)
             activity_type = core_activity.type or "unknown"
diff --git a/packages/apps/tests/test_http_server.py b/packages/apps/tests/test_http_server.py
index bba4bcd8..3357b220 100644
--- a/packages/apps/tests/test_http_server.py
+++ b/packages/apps/tests/test_http_server.py
@@ -131,6 +131,64 @@ async def test_handle_activity_no_handler(self, server):
         assert result["status"] == 500
 
 
+class TestHttpServerNoCredentials:
+    """Test cases for HttpServer when no credentials are configured and skip_auth is not set."""
+
+    @pytest.fixture
+    def mock_adapter(self):
+        adapter = MagicMock()
+        adapter.register_route = MagicMock()
+        adapter.start = AsyncMock()
+        adapter.stop = AsyncMock()
+        return adapter
+
+    @pytest.fixture
+    def server(self, mock_adapter):
+        server = HttpServer(mock_adapter)
+        server.initialize(credentials=None, skip_auth=False)
+        return server
+
+    @pytest.mark.asyncio
+    async def test_rejects_request_when_no_credentials(self, server):
+        """Test that requests are rejected with 401 when no credentials are configured."""
+        server.on_request = AsyncMock(return_value=InvokeResponse(status=200))
+
+        request = HttpRequest(
+            body={
+                "type": "message",
+                "id": "test-123",
+                "serviceUrl": "https://attacker.com",
+            },
+            headers={},
+        )
+
+        result = await server.handle_request(request)
+
+        assert result["status"] == 401
+        assert result["body"] == {"error": "Authentication not configured"}
+        server.on_request.assert_not_called()
+
+    @pytest.mark.asyncio
+    async def test_rejects_request_with_auth_header_when_no_credentials(self, server):
+        """Test that even requests with auth headers are rejected when no credentials are configured."""
+        server.on_request = AsyncMock(return_value=InvokeResponse(status=200))
+
+        request = HttpRequest(
+            body={
+                "type": "message",
+                "id": "test-123",
+                "serviceUrl": "https://example.com",
+            },
+            headers={"authorization": "Bearer some-token"},
+        )
+
+        result = await server.handle_request(request)
+
+        assert result["status"] == 401
+        assert result["body"] == {"error": "Authentication not configured"}
+        server.on_request.assert_not_called()
+
+
 class TestFastAPIAdapter:
     """Test cases for FastAPIAdapter."""
 
@@ -145,7 +203,7 @@ def test_register_route(self):
         """Test route registration on FastAPI app."""
         adapter = FastAPIAdapter()
 
-        async def handler(req: HttpRequest) -> HttpResponse:
+        async def handler(request: HttpRequest) -> HttpResponse:
             return HttpResponse(status=200, body=None)
 
         adapter.register_route("POST", "/test", handler)