Web Page Password Protection

I have a web site residing on an APACHE Server. I would like to password protect a sub-directory, however, not having done this before, I am looking for resources. One method I have found is
.htaccess. The only problem is that what I have read, Theuser name and password are transmitted as plain, readable text, they are not encrypted. I am looking for the password to be encrypted. Most sites I visit have a box that pops up with “Enter Network Password” at the top and within the box “Please type your user name and password”. The password is encrypted. I am looking for this particular solution. Thank You