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A quantum key distribution (QKD) system has been developed, using a standard telecommunications optical fiber, which is capable of operating at clock rates of greater than 1 GHz. The QKD system implements a polarization encoded version of the B92 protocol. The system employs vertical-cavity surface-emitting lasers with emission wavelengths of 850 nm as weak coherent light sources, and silicon single photon avalanche diodes as the single photon detectors. A distributed feedback laser of emission wavelength 1.3 μm, and a linear gain germanium avalanche photodiode was used to optically synchronize individual photons over the standard telecommunications fiber. The QKD system exhibited a quantum bit error rate (QBER) of 1.4%, and an estimated net bit rate (NBR) greater than 100 000 bits-1 for a 4.2-km transmission range. For a 10-km fiber range, a QBER of 2.1%, and an estimated NBR of greater than 7000 bits-1 was achieved.