Index: src/wp-activate.php
===================================================================
--- src/wp-activate.php	(revision 42080)
+++ src/wp-activate.php	(working copy)
@@ -131,7 +131,7 @@
 
 			<div id="signup-welcome">
 				<p><span class="h3"><?php _e('Username:'); ?></span> <?php echo $user->user_login ?></p>
-				<p><span class="h3"><?php _e('Password:'); ?></span> <?php echo $result['password']; ?></p>
+				<p><span class="h3"><?php _e('Password:'); ?></span> <?php echo empty( $result['user_exists'] ) ? $result['password'] : __( 'Use existing password.' ); ?></p>
 			</div>
 
 			<?php if ( $url && $url != network_home_url( '', 'http' ) ) :
Index: src/wp-includes/ms-functions.php
===================================================================
--- src/wp-includes/ms-functions.php	(revision 42080)
+++ src/wp-includes/ms-functions.php	(working copy)
@@ -1056,6 +1056,7 @@
 
 	$meta = maybe_unserialize($signup->meta);
 	$password = wp_generate_password( 12, false );
+	$user_already_exists = false;
 
 	$user_id = username_exists($signup->user_login);
 
@@ -1107,15 +1108,16 @@
 	 *
 	 * @since MU (3.0.0)
 	 *
-	 * @param int    $blog_id       Blog ID.
-	 * @param int    $user_id       User ID.
-	 * @param int    $password      User password.
-	 * @param string $signup_title  Site title.
-	 * @param array  $meta          Signup meta data. By default, contains the requested privacy setting and lang_id.
+	 * @param int    $blog_id             Blog ID.
+	 * @param int    $user_id             User ID.
+	 * @param int    $password            User password.
+	 * @param string $signup_title        Site title.
+	 * @param array  $meta                Signup meta data. By default, contains the requested privacy setting and lang_id.
+	 * @param bool   $user_already_exists Is user already exist or did we create new user?
 	 */
-	do_action( 'wpmu_activate_blog', $blog_id, $user_id, $password, $signup->title, $meta );
+	do_action( 'wpmu_activate_blog', $blog_id, $user_id, $password, $signup->title, $meta, $user_already_exists );
 
-	return array('blog_id' => $blog_id, 'user_id' => $user_id, 'password' => $password, 'title' => $signup->title, 'meta' => $meta);
+	return array( 'blog_id' => $blog_id, 'user_id' => $user_id, 'password' => $password, 'title' => $signup->title, 'meta' => $meta, 'user_exists' => $user_already_exists );
 }
 
 /**