diff --git a/internal/impl/postgresql/pglogicalstream/connection.go b/internal/impl/postgresql/pglogicalstream/connection.go
index 698a638eba..1ea19dc02a 100644
--- a/internal/impl/postgresql/pglogicalstream/connection.go
+++ b/internal/impl/postgresql/pglogicalstream/connection.go
@@ -9,17 +9,24 @@
 package pglogicalstream
 
 import (
+	"context"
 	"database/sql"
 	"fmt"
 	"regexp"
 	"strconv"
+	"sync"
 
+	"github.com/jackc/pgx/v5"
 	"github.com/jackc/pgx/v5/pgxpool"
 	"github.com/jackc/pgx/v5/stdlib"
 )
 
 var re = regexp.MustCompile(`^(\d+)`)
 
+// Every pool refreshes the token through the same Config.DBConfig, so the
+// refresh and the read that follows it have to be serialised.
+var refreshAuthTokenMu sync.Mutex
+
 func openPgConnectionFromConfig(cfg *Config) (*sql.DB, error) {
 	parsedCfg, err := pgxpool.ParseConfig(cfg.DBRawDSN)
 	if err != nil {
@@ -27,7 +34,23 @@ func openPgConnectionFromConfig(cfg *Config) (*sql.DB, error) {
 	}
 	parsedCfg.ConnConfig.Password = cfg.DBConfig.Password
 	parsedCfg.ConnConfig.TLSConfig = cfg.TLSConfig
-	return stdlib.OpenDB(*parsedCfg.ConnConfig), nil
+	return stdlib.OpenDB(*parsedCfg.ConnConfig, stdlib.OptionBeforeConnect(
+		func(ctx context.Context, connCfg *pgx.ConnConfig) error {
+			if cfg.RefreshAuthToken == nil {
+				return nil
+			}
+			// IAM tokens expire long before the pipeline does, so rebuild the
+			// password for every new connection rather than reusing the one
+			// captured when the pool was opened.
+			refreshAuthTokenMu.Lock()
+			defer refreshAuthTokenMu.Unlock()
+			if err := cfg.RefreshAuthToken(ctx); err != nil {
+				return err
+			}
+			connCfg.Password = cfg.DBConfig.Password
+			return nil
+		},
+	)), nil
 }
 
 func getPostgresVersion(cfg *Config) (int, error) {
diff --git a/internal/impl/postgresql/pglogicalstream/connection_test.go b/internal/impl/postgresql/pglogicalstream/connection_test.go
new file mode 100644
index 0000000000..206919b8e9
--- /dev/null
+++ b/internal/impl/postgresql/pglogicalstream/connection_test.go
@@ -0,0 +1,83 @@
+// Copyright 2025 Redpanda Data, Inc.
+//
+// Licensed as a Redpanda Enterprise file under the Redpanda Community
+// License (the "License"); you may not use this file except in compliance with
+// the License. You may obtain a copy of the License at
+//
+// https://github.com/redpanda-data/connect/v4/blob/main/licenses/rcl.md
+
+package pglogicalstream
+
+import (
+	"context"
+	"errors"
+	"fmt"
+	"sync/atomic"
+	"testing"
+
+	"github.com/jackc/pgx/v5/pgconn"
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+)
+
+// Nothing listens on port 1, so every attempt fails at the dial. That is late
+// enough for these tests, which only care about what happens before it.
+const unreachableDSN = "postgres://user:startup@127.0.0.1:1/db?sslmode=disable"
+
+func TestOpenPgConnectionFromConfigAuthToken(t *testing.T) {
+	t.Run("refreshes the token for every new connection", func(t *testing.T) {
+		dbConf, err := pgconn.ParseConfig(unreachableDSN)
+		require.NoError(t, err)
+
+		var refreshes atomic.Int64
+		db, err := openPgConnectionFromConfig(&Config{
+			DBRawDSN: unreachableDSN,
+			DBConfig: dbConf,
+			RefreshAuthToken: func(context.Context) error {
+				dbConf.Password = fmt.Sprintf("token-%d", refreshes.Add(1))
+				return nil
+			},
+		})
+		require.NoError(t, err)
+		defer db.Close()
+
+		for range 2 {
+			require.Error(t, db.PingContext(t.Context()))
+		}
+		assert.Equal(t, int64(2), refreshes.Load())
+		assert.Equal(t, "token-2", dbConf.Password)
+	})
+
+	t.Run("surfaces a failed refresh", func(t *testing.T) {
+		dbConf, err := pgconn.ParseConfig(unreachableDSN)
+		require.NoError(t, err)
+
+		errRefresh := errors.New("token expired")
+		db, err := openPgConnectionFromConfig(&Config{
+			DBRawDSN: unreachableDSN,
+			DBConfig: dbConf,
+			RefreshAuthToken: func(context.Context) error {
+				return errRefresh
+			},
+		})
+		require.NoError(t, err)
+		defer db.Close()
+
+		assert.ErrorIs(t, db.PingContext(t.Context()), errRefresh)
+	})
+
+	t.Run("keeps the parsed password when no refresh is configured", func(t *testing.T) {
+		dbConf, err := pgconn.ParseConfig(unreachableDSN)
+		require.NoError(t, err)
+
+		db, err := openPgConnectionFromConfig(&Config{
+			DBRawDSN: unreachableDSN,
+			DBConfig: dbConf,
+		})
+		require.NoError(t, err)
+		defer db.Close()
+
+		require.Error(t, db.PingContext(t.Context()))
+		assert.Equal(t, "startup", dbConf.Password)
+	})
+}