diff --git a/docs/api/api.rst b/docs/api/api.rst
--- a/docs/api/api.rst
+++ b/docs/api/api.rst
@@ -151,7 +151,7 @@ OUTPUT::
 create_user
 -----------
 
-Creates new user or updates current one if such user exists. This command can 
+Creates new user. This command can 
 be executed only using api_key belonging to user with admin rights.
 
 
@@ -179,6 +179,37 @@ OUTPUT::
     error:  null
 
 
+update_user
+-----------
+
+updates current one if such user exists. This command can 
+be executed only using api_key belonging to user with admin rights.
+
+
+INPUT::
+
+    api_key : "<api_key>"
+    method :  "update_user"
+    args :    {
+                "username" :  "<username>",
+                "password" :  "<password>",
+                "email" :     "<useremail>",
+                "firstname" : "<firstname> = None",
+                "lastname" :  "<lastname> = None",
+                "active" :    "<bool> = True",
+                "admin" :     "<bool> = False",
+                "ldap_dn" :   "<ldap_dn> = None"
+              }
+
+OUTPUT::
+
+    result: {
+              "id" : "<edited_user_id>",
+              "msg" : "updated user <username>"
+            }
+    error:  null
+
+
 get_users_group
 ---------------
 
diff --git a/rhodecode/controllers/api/api.py b/rhodecode/controllers/api/api.py
--- a/rhodecode/controllers/api/api.py
+++ b/rhodecode/controllers/api/api.py
@@ -134,7 +134,7 @@ class ApiController(JSONRPCController):
     def create_user(self, apiuser, username, password, email, firstname=None,
                     lastname=None, active=True, admin=False, ldap_dn=None):
         """
-        Create new user or updates current one
+        Create new user
 
         :param apiuser:
         :param username:
@@ -146,7 +146,6 @@ class ApiController(JSONRPCController):
         :param admin:
         :param ldap_dn:
         """
-
         if User.get_by_username(username):
             raise JSONRPCError("user %s already exist" % username)
 
@@ -165,6 +164,39 @@ class ApiController(JSONRPCController):
             raise JSONRPCError('failed to create user %s' % username)
 
     @HasPermissionAllDecorator('hg.admin')
+    def update_user(self, apiuser, username, password, email, firstname=None,
+                    lastname=None, active=True, admin=False, ldap_dn=None):
+        """
+        Updates given user
+
+        :param apiuser:
+        :param username:
+        :param password:
+        :param email:
+        :param name:
+        :param lastname:
+        :param active:
+        :param admin:
+        :param ldap_dn:
+        """
+        if not User.get_by_username(username):
+            raise JSONRPCError("user %s does not exist" % username)
+
+        try:
+            usr = UserModel().create_or_update(
+                username, password, email, firstname,
+                lastname, active, admin, ldap_dn
+            )
+            Session.commit()
+            return dict(
+                id=usr.user_id,
+                msg='updated user %s' % username
+            )
+        except Exception:
+            log.error(traceback.format_exc())
+            raise JSONRPCError('failed to update user %s' % username)
+
+    @HasPermissionAllDecorator('hg.admin')
     def get_users_group(self, apiuser, group_name):
         """"
         Get users group by name