private Button mBtnPassword;
private EditText mEtPassword;
private boolean mbDisplayFlg = false;
 
/** Called when the activity is first created. */
@Override
public void onCreate(Bundle savedInstanceState) {
  super.onCreate(savedInstanceState);
  setContentView(R.layout.main);

  mEtPassword = (EditText)findViewById(R.id.password);
  mBtnPassword = (Button)findViewById(R.id.btnPassword);
  mBtnPassword.setOnClickListener(new OnClickListener() {

 @Override
 public void onClick(View v) {
 // TODO Auto-generated method stub
 Log.d("AndroidTest", "mbDisplayFlg = " + mbDisplayFlg);
 if (!mbDisplayFlg) {
  // display password text, for example "123456"
  mEtPassword.setTransformationMethod(HideReturnsTransformationMethod.getInstance());
 } else {
  // hide password, display "."
  mEtPassword.setTransformationMethod(PasswordTransformationMethod.getInstance());
 }
 mbDisplayFlg = !mbDisplayFlg;
 mEtPassword.postInvalidate();
 }
  });
}

<?xml version="1.0" encoding="utf-8"?>
<LinearLayout xmlns:android="http://schemas.android.com/apk/res/android"
 android:orientation="vertical" android:layout_width="fill_parent"
 android:layout_height="fill_parent">
 <Button android:id="@+id/btnPassword"
 android:layout_width="wrap_content"
 android:layout_height="wrap_content"
 android:text="密碼" />
 <EditText android:id="@+id/password"
 android:layout_width="fill_parent"
 android:layout_height="wrap_content"
 android:password="true"
 android:textSize="18sp"
 android:text="123456">
 </EditText>
</LinearLayout>