[WebInvoke(UriTemplate = "widgets", Method = "POST")]
public XElement CreateWidget(XElement e)
{
...
}

<?xml version="1.0"?>
<configuration>

  <connectionStrings>
    <add name="DatabaseConnectionString" connectionString="Data Source=.SQLEXPRESS;Initial Catalog=Database;Integrated Security=True" providerName="System.Data.SqlClient" />
  </connectionStrings>
  <system.web>
    <compilation debug="true" targetFramework="4.0" />
    <httpRuntime maxRequestLength="10485760" />
  </system.web>

  <system.webServer>
    <modules runAllManagedModulesForAllRequests="true">
      <add name="UrlRoutingModule" type="System.Web.Routing.UrlRoutingModule, System.Web, Version=4.0.0.0, Culture=neutral, PublicKeyToken=b03f5f7f11d50a3a" />
    </modules>
  </system.webServer>

  <system.serviceModel>
    <serviceHostingEnvironment aspNetCompatibilityEnabled="true" />
    <standardEndpoints>
      <webHttpEndpoint>
        <standardEndpoint name="" helpEnabled="true" automaticFormatSelectionEnabled="true" maxReceivedMessageSize="1048576" maxBufferSize="1048576" />
      </webHttpEndpoint>
    </standardEndpoints>
  </system.serviceModel>

</configuration>

<system.web>
  <compilation debug="true" targetFramework="4.0" />
  <httpRuntime maxRequestLength="10485760" />
  <authentication mode="None"></authentication>
  <httpModules>
    <add name="BasicAuthenticationModule" type="YourNamespace.UserNameAuthenticator" />
  </httpModules>
</system.web>

using System;
using System.Collections.Generic;
using System.Text;
using System.Web;
using System.Web.Security;
using System.Security.Principal;
using System.ServiceModel.Activation;

namespace YourNamespace
{
    public class UserNameAuthenticator : IHttpModule
    {
        public void Dispose()
        {
        }

        public void Init(HttpApplication application)
        {
            application.AuthenticateRequest += new EventHandler(this.OnAuthenticateRequest);
            application.AuthorizeRequest += new EventHandler(this.OnAuthorizationRequest);
            application.EndRequest += new EventHandler(this.OnEndRequest);
        }

        public bool CustomAuth(string username, string password)
        {
            //TODO: Implement your custom auth logic here
            return true;
        }

        public string[] GetCustomRoles(string username)
        {
            return new string[] { "read", "write" };
        }

        public void OnAuthorizationRequest(object source, EventArgs eventArgs)
        {
            HttpApplication app = (HttpApplication)source;
            //If you want to handle authorization differently from authentication
        }

        public void OnAuthenticateRequest(object source, EventArgs eventArgs)
        {
            HttpApplication app = (HttpApplication)source;
            //the Authorization header is checked if present
            string authHeader = app.Request.Headers["Authorization"];
            if (!string.IsNullOrEmpty(authHeader))
            {
                string authStr = app.Request.Headers["Authorization"];
                if (authStr == null || authStr.Length == 0)
                {
                    // No credentials; anonymous request
                    return;
                }
                authStr = authStr.Trim();
                if (authStr.IndexOf("Basic", 0) != 0)
                {
                    //header not correct we do not authenticate
                    return;
                }

                authStr = authStr.Trim();
                string encodedCredentials = authStr.Substring(6);
                byte[] decodedBytes = Convert.FromBase64String(encodedCredentials);
                string s = new ASCIIEncoding().GetString(decodedBytes);
                string[] userPass = s.Split(new char[] { ':' });
                string username = userPass[0];
                string password = userPass[1];
                //the user is validated against the SqlMemberShipProvider
                //If it is validated then the roles are retrieved from the
                //role provider and a generic principal is created
                //the generic principal is assigned to the user context
                // of the application
                if (CustomAuth(username, password))
                {
                    string[] roles = GetCustomRoles(username);
                    app.Context.User = new GenericPrincipal(new
                    GenericIdentity(username, "Membership Provider"), roles);
                }
                else
                {
                    DenyAccess(app);
                    return;
                }
            }
            else
            {
                //the authorization header is not present
                //the status of response is set to 401 and it ended
                //the end request will check if it is 401 and add
                //the authentication header so the client knows
                //it needs to send credentials to authenticate
                app.Response.StatusCode = 401;
                app.Response.End();
            }
        }

        public void OnEndRequest(object source, EventArgs eventArgs)
        {
            if (HttpContext.Current.Response.StatusCode == 401)
            {
                //if the status is 401 the WWW-Authenticated is added to
                //the response so client knows it needs to send credentials
                HttpContext context = HttpContext.Current;
                context.Response.StatusCode = 401;
                context.Response.AddHeader("WWW-Authenticate", "Basic Realm");
            }
        }
        private void DenyAccess(HttpApplication app)
        {
            app.Response.StatusCode = 401;
            app.Response.StatusDescription = "Access Denied";
            // error not authenticated
            app.Response.Write("401 Access Denied");
            app.CompleteRequest();
        }
    } // End Class
} //End Namespace