I have added the lines below to my squid conf file: cache peer <IP address of parent proxy server> parent 3128 0 no-query default acl all src 0.0.0.0/0.0.0.0 never_direct allow all With these lines added, the requests do appear to be directed to the parent proxy and the authentication window for the parent pops up. When the username and password are entered and OK is clicked, the authentication window pops up again. The user never gets past the authentication request. If I remove the 3 lines above, the local caching server works OK, without going through the authenticating parent.