The default algorithm for storing password hashes in /etc/shadow is MD5. I was told to use SHA-512 hashing algorithm. How do I set password hashing using the SHA-256 and SHA-512 under CentOS or Redhat Enterprise Linux 5.4?

You need to use authconfig command to setup SHA-256/512 hashing. This command provides a simple method of configuring /etc/sysconfig/network to handle NIS, as well as /etc/passwd and /etc/shadow, the files used for shadow password support. Basic LDAP, Kerberos 5, and SMB (authentication) client configuration is also provided.

Display Current Hashing Algorithm

Type the following command:
# authconfig --test | grep hashing

Sample outputs:

password hashing algorithm is md5

Configure Linux Server To Use The SHA-512

To configure the Linux system to use the SHA-512 algorithm, enter:
# authconfig --passalgo=sha512 --update

Note users need to change their passwords in order to generate hashes using SHA-512. You can force users to change their password on next login:
# chage -d 0 userName