diff --git a/src/rest_framework_api_key/crypto.py b/src/rest_framework_api_key/crypto.py
index 6a1696e..8e21457 100644
--- a/src/rest_framework_api_key/crypto.py
+++ b/src/rest_framework_api_key/crypto.py
@@ -1,7 +1,9 @@
+import hashlib
 import typing
 
+from django.conf import settings
 from django.contrib.auth.hashers import check_password, make_password
-from django.utils.crypto import get_random_string
+from django.utils.crypto import constant_time_compare, get_random_string
 
 
 def concatenate(left: str, right: str) -> str:
@@ -13,6 +15,21 @@ def split(concatenated: str) -> typing.Tuple[str, str]:
     return left, right
 
 
+def hash_key(algo: str, key: str, salt: str) -> str:
+    hasher = getattr(hashlib, algo)
+    hash_value = hasher(key.encode() + salt.encode()).hexdigest()
+    return f"plain_{algo}$${hash_value}"
+
+
+def check_hash(key: str, hashed_key: str, salt: str) -> bool:
+    algo, _, hash_value = hashed_key.partition("$$")
+    algo = algo.replace("plain_", "")
+    hasher = getattr(hashlib, algo)
+    return constant_time_compare(
+        hasher(key.encode() + salt.encode()).hexdigest(), hash_value
+    )
+
+
 class KeyGenerator:
     def __init__(self, prefix_length: int = 8, secret_key_length: int = 32):
         self.prefix_length = prefix_length
@@ -24,15 +41,24 @@ def get_prefix(self) -> str:
     def get_secret_key(self) -> str:
         return get_random_string(self.secret_key_length)
 
-    def hash(self, value: str) -> str:
+    def hash(self, value: str, salt: str) -> str:
+        hash_algo = getattr(settings, "DRF_API_KEY_HASHING_ALGORITHM", None)
+        if hash_algo:
+            # the hash is salted with the prefix to prevent rainbow table attacks
+            # (even though the key should be random enough to prevent that)
+            return hash_key(hash_algo, value, salt)
         return make_password(value)
 
     def generate(self) -> typing.Tuple[str, str, str]:
         prefix = self.get_prefix()
         secret_key = self.get_secret_key()
         key = concatenate(prefix, secret_key)
-        hashed_key = self.hash(key)
+        hashed_key = self.hash(key, prefix)
         return key, prefix, hashed_key
 
-    def verify(self, key: str, hashed_key: str) -> bool:
+    def verify(self, key: str, hashed_key: str, prefix: str) -> bool:
+        if hashed_key.startswith("plain_"):
+            # this is a plain key
+            return check_hash(key, hashed_key, prefix)
+
         return check_password(key, hashed_key)
diff --git a/src/rest_framework_api_key/models.py b/src/rest_framework_api_key/models.py
index 3854f68..5b128a1 100644
--- a/src/rest_framework_api_key/models.py
+++ b/src/rest_framework_api_key/models.py
@@ -1,5 +1,6 @@
 import typing
 
+from django.conf import settings
 from django.core.exceptions import ValidationError
 from django.db import models
 from django.utils import timezone
@@ -128,7 +129,17 @@ def _has_expired(self) -> bool:
     has_expired = property(_has_expired)
 
     def is_valid(self, key: str) -> bool:
-        return type(self).objects.key_generator.verify(key, self.hashed_key)
+        ok = type(self).objects.key_generator.verify(key, self.hashed_key, self.prefix)
+        if ok and getattr(settings, "DRF_API_KEY_HASH_AUTOUPDATE", False):
+            # by generating a new hash and comparing it with the stored one,
+            # we can detect not only if the hash algorithm has changed, but also
+            # if some internal parameters have changed (e.g. the number of iterations)
+            # at the cost of one more hash generation, which is negligible
+            new_hash = type(self).objects.key_generator.hash(key, self.prefix)
+            if new_hash != self.hashed_key:
+                self.hashed_key = new_hash
+                self.save()
+        return ok
 
     def clean(self) -> None:
         self._validate_revoked()
diff --git a/tests/test_plain_key_hashing.py b/tests/test_plain_key_hashing.py
new file mode 100644
index 0000000..d293f09
--- /dev/null
+++ b/tests/test_plain_key_hashing.py
@@ -0,0 +1,44 @@
+from typing import Callable
+
+import pytest
+from django.conf import LazySettings
+
+from rest_framework_api_key.crypto import KeyGenerator
+from rest_framework_api_key.models import APIKey
+
+
+@pytest.mark.parametrize("algorithm", ["sha256", "sha512", "blake2b"])
+def test_hashing_algorithm_honors_setting(
+    settings: LazySettings, algorithm: str
+) -> None:
+    settings.DRF_API_KEY_HASHING_ALGORITHM = algorithm
+    _key, _prefix, hashed_key = KeyGenerator().generate()
+    assert hashed_key.startswith(f"plain_{algorithm}$$")
+
+
+@pytest.mark.parametrize("algorithm", ["sha256", "sha512", "blake2b"])
+def test_hash_verify(settings: LazySettings, algorithm: str) -> None:
+    settings.DRF_API_KEY_HASHING_ALGORITHM = algorithm
+    key, prefix, hashed_key = KeyGenerator().generate()
+    assert KeyGenerator().verify(key, hashed_key, prefix) is True
+
+
+@pytest.mark.parametrize("update_algo", [True, False])
+@pytest.mark.django_db
+def test_hash_verify_with_update(
+    settings: LazySettings, update_algo: bool, django_assert_num_queries: Callable
+) -> None:
+    api_key, generated_key = APIKey.objects.create_key(name="test")
+    assert not api_key.hashed_key.startswith("plain_")
+    assert api_key.is_valid(generated_key) is True
+
+    settings.DRF_API_KEY_HASHING_ALGORITHM = "blake2b"
+    settings.DRF_API_KEY_HASH_AUTOUPDATE = update_algo
+
+    assert api_key.is_valid(generated_key) is True
+    assert api_key.hashed_key.startswith("plain_blake2b$$") is update_algo
+    with django_assert_num_queries(0):
+        # no queries should be made to update the key if it is already updated
+        assert (
+            api_key.is_valid(generated_key) is True
+        ), "check still works after potential update"