diff --git a/httpx/_client.py b/httpx/_client.py
index 6208535f0b..4661b221c5 100644
--- a/httpx/_client.py
+++ b/httpx/_client.py
@@ -234,7 +234,7 @@ def stream(
         params: QueryParamTypes = None,
         headers: HeaderTypes = None,
         cookies: CookieTypes = None,
-        auth: AuthTypes = None,
+        auth: typing.Union[AuthTypes, UnsetType] = UNSET,
         allow_redirects: bool = True,
         timeout: typing.Union[TimeoutTypes, UnsetType] = UNSET,
     ) -> "StreamContextManager":
@@ -1786,7 +1786,7 @@ def __init__(
         client: BaseClient,
         request: Request,
         *,
-        auth: AuthTypes = None,
+        auth: typing.Union[AuthTypes, UnsetType] = UNSET,
         allow_redirects: bool = True,
         timeout: typing.Union[TimeoutTypes, UnsetType] = UNSET,
         close_client: bool = False,
diff --git a/tests/client/test_auth.py b/tests/client/test_auth.py
index e3d328c6fa..efbfcc36c4 100644
--- a/tests/client/test_auth.py
+++ b/tests/client/test_auth.py
@@ -162,6 +162,23 @@ async def test_basic_auth() -> None:
     assert response.json() == {"auth": "Basic dG9tY2hyaXN0aWU6cGFzc3dvcmQxMjM="}
 
 
+@pytest.mark.asyncio
+async def test_basic_auth_with_stream() -> None:
+    """
+    See: https://github.com/encode/httpx/pull/1312
+    """
+    url = "https://example.org/"
+    auth = ("tomchristie", "password123")
+    app = App()
+
+    async with httpx.AsyncClient(transport=MockTransport(app), auth=auth) as client:
+        async with client.stream("GET", url) as response:
+            response.read()
+
+    assert response.status_code == 200
+    assert response.json() == {"auth": "Basic dG9tY2hyaXN0aWU6cGFzc3dvcmQxMjM="}
+
+
 @pytest.mark.asyncio
 async def test_basic_auth_in_url() -> None:
     url = "https://tomchristie:password123@example.org/"