A method is provided for operating a dual-mode access terminal such that a CAVE based authentication process may be used in both an IS-2000 and an HRPD mode of operation. Generally, the access terminal receives a CHAP challenge from an access network, and then derives a RAND challenge based on at least a portion of the CHAP challenge. The CAVE based authentication process is then performed using the RAND challenge to produce a SMEKEY and a PLCM. Thereafter a secret CHAP key is derived from the SMEKEY and PLCM and provided to the access network for purposes of authenticating the access terminal in the HRPD mode of operation.