diff --git a/CHANGELOG.rst b/CHANGELOG.rst
index 2a6f4937ea..b26a4212d9 100644
--- a/CHANGELOG.rst
+++ b/CHANGELOG.rst
@@ -65,6 +65,11 @@ Fixed
   ``GET /v1/rules`` and ``GET /v1/rules/<ref>`` API endpoint. (bug fix) #4788 #4807
 
   Contributed by @Nicodemos305 and @jeansfelix
+* Fix a bug with authentication API endpoint (``POST /auth/v1/tokens``) returning internal
+  server error when running under gunicorn and when``auth.api_url`` config option was not set.
+  (bug fix) #4809
+
+  Reported by @guzzijones
 
 3.1.0 - June 27, 2019
 ---------------------
diff --git a/st2auth/st2auth/controllers/v1/auth.py b/st2auth/st2auth/controllers/v1/auth.py
index e32266b9d2..3b3073e32b 100644
--- a/st2auth/st2auth/controllers/v1/auth.py
+++ b/st2auth/st2auth/controllers/v1/auth.py
@@ -22,6 +22,7 @@
 from st2common.router import exc
 from st2common.router import Response
 from st2common.util import auth as auth_utils
+from st2common.util import api as api_utils
 from st2common import log as logging
 import st2auth.handlers as handlers
 
@@ -80,7 +81,8 @@ def post(self, request, **kwargs):
 
 def process_successful_response(token):
     resp = Response(json=token, status=http_client.CREATED)
-    resp.headers['X-API-URL'] = cfg.CONF.auth.api_url
+    # NOTE: gunicon fails and throws an error if header value is not a string (e.g. if it's None)
+    resp.headers['X-API-URL'] = api_utils.get_base_public_api_url()
     return resp
 
 
diff --git a/st2auth/tests/unit/controllers/v1/test_token.py b/st2auth/tests/unit/controllers/v1/test_token.py
index d1a5e46e5e..3a3eb237b1 100644
--- a/st2auth/tests/unit/controllers/v1/test_token.py
+++ b/st2auth/tests/unit/controllers/v1/test_token.py
@@ -87,6 +87,7 @@ def _test_token_post(self, path=TOKEN_V1_PATH):
         actual_expiry = isotime.parse(response.json['expiry'])
         self.assertLess(timestamp, actual_expiry)
         self.assertLess(actual_expiry, expected_expiry)
+        return response
 
     def test_token_post_unauthorized(self):
         response = self.app.post_json(TOKEN_V1_PATH, {}, expect_errors=True, extra_environ={
@@ -109,6 +110,22 @@ def test_token_post_new_user(self):
     def test_token_post_existing_user(self):
         self._test_token_post()
 
+    @mock.patch.object(
+        User, 'get_by_name',
+        mock.MagicMock(return_value=UserDB(name=USERNAME)))
+    def test_token_post_success_x_api_url_header_value(self):
+        # auth.api_url option is explicitly set
+        cfg.CONF.set_override('api_url', override='https://example.com', group='auth')
+
+        resp = self._test_token_post()
+        self.assertEqual(resp.headers['X-API-URL'], 'https://example.com')
+
+        # auth.api_url option is not set, url is inferred from listen host and port
+        cfg.CONF.set_override('api_url', override=None, group='auth')
+
+        resp = self._test_token_post()
+        self.assertEqual(resp.headers['X-API-URL'], 'http://127.0.0.1:9101')
+
     @mock.patch.object(
         User, 'get_by_name',
         mock.MagicMock(return_value=UserDB(name=USERNAME)))