diff --git a/cloud/rax b/cloud/rax
index 2b38c546409..eea61c27a34 100644
--- a/cloud/rax
+++ b/cloud/rax
@@ -32,10 +32,18 @@ options:
      - Indicate desired state of the resource
     choices: ['present', 'active', 'absent', 'deleted']
     default: present
-  creds_file:
+  credentials:
     description:
-     - File to find the Rackspace Public Cloud credentials in
+     - File to find the Rackspace credentials in (ignored if C(api_key) and
+       C(username) are provided)
     default: null
+    aliases: ['creds_file']
+  api_key:
+    description:
+     - Rackspace API key (overrides C(credentials))
+  username:
+    description:
+     - Rackspace username (overrides C(credentials))
   name:
     description:
      - Name to give the instance
@@ -64,7 +72,7 @@ options:
   region:
     description:
      - Region to create an instance in
-    default: null
+    default: DFW
   wait:
     description:
      - wait for the instance to be in state 'running' before returning
@@ -77,16 +85,19 @@ options:
 requirements: [ "pyrax" ]
 author: Jesse Keating
 notes:
-  - Two environment variables can be used, RAX_CREDS and RAX_REGION.
-  - RAX_CREDS points to a credentials file appropriate for pyrax
-  - RAX_REGION defines a Rackspace Public Cloud region (DFW, ORD, LON, ...)
+  - The following environment variables can be used, C(RAX_USERNAME),
+    C(RAX_API_KEY), C(RAX_CREDS), C(RAX_CREDENTIALS), C(RAX_REGION).
+  - C(RAX_CREDENTIALS) and C(RAX_CREDS) points to a credentials file
+    appropriate for pyrax
+  - C(RAX_USERNAME) and C(RAX_API_KEY) obviate the use of a credentials file
+  - C(RAX_REGION) defines a Rackspace Public Cloud region (DFW, ORD, LON, ...)
 '''
 
 EXAMPLES = '''
 # Create a server
 - local_action:
      module: rax
-     creds_file: ~/.raxpub
+     credentials: ~/.raxpub
      service: cloudservers
      name: rax-test1
      flavor: 5
@@ -208,7 +219,9 @@ def main():
             service = dict(default='cloudservers', choices=SUPPORTEDSERVICES),
             state = dict(default='present', choices=['active', 'present',
                                                      'deleted', 'absent']),
-            creds_file = dict(),
+            credentials = dict(aliases = ['creds_file']),
+            api_key=dict(),
+            username=dict(),
             name = dict(),
             flavor = dict(),
             image = dict(),
@@ -223,7 +236,9 @@ def main():
 
     service = module.params.get('service')
     state = module.params.get('state')
-    creds_file = module.params.get('creds_file')
+    credentials = module.params.get('credentials')
+    api_key = module.params.get('api_key')
+    username = module.params.get('username')
     name = module.params.get('name')
     flavor = module.params.get('flavor')
     image = module.params.get('image')
@@ -234,24 +249,27 @@ def main():
     wait = module.params.get('wait')
     wait_timeout = int(module.params.get('wait_timeout'))
 
-    # Setup the credentials file
-    if not creds_file:
-        try:
-            creds_file = os.environ['RAX_CREDS_FILE']
-        except KeyError, e:
-            module.fail_json(msg = 'Unable to load %s' % e.message)
+    # Setup the credentials and region
+    try:
+        username = username or os.environ.get('RAX_USERNAME')
+        api_key = api_key or os.environ.get('RAX_API_KEY')
+        credentials = credentials or os.environ.get('RAX_CREDENTIALS') or \
+                                     os.environ.get('RAX_CREDS_FILE')
+        region = region or os.environ.get('RAX_REGION')
 
-    # Define the region
-    if not region:
-        try:
-            region = os.environ['RAX_REGION']
-        except KeyError, e:
-            module.fail_json(msg = 'Unable to load %s' % e.message)
+    except KeyError, e:
+        module.fail_json(msg = 'Unable to load %s' % e.message)
 
     # setup the auth
     try:
         pyrax.set_setting("identity_type", "rackspace")
-        pyrax.set_credential_file(creds_file, region=region)
+        if api_key and username:
+            pyrax.set_credentials(username, api_key=api_key, region=region)
+        elif credentials:
+            credentials = os.path.expanduser(credentials)
+            pyrax.set_credential_file(credentials, region=region)
+        else:
+            raise Exception('No credentials supplied!')
     except Exception, e:
         module.fail_json(msg = '%s' % e.message)