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The paper tries to have made a study of the security keys of USB, which can achieve these functions such as data encryption, digital signature, and identity authentication. Based on the analysis of the security key system, the paper also introduces its formation, functions and cryptosystem while putting forward a file encryption project on the basis of the USB security key. The project adopts the combination of soft hardware, the software conducting the process of file encryption and hardware taking charge of the management of secret key and the encryption of session key. The project makes a full use of the respective advantages upon the Symmetetric-key cryptosystems and the Publed-key cryptosystem, which means to encrypt the electronic documents by using the algorithms of the Symmetetric-key cryptosystems and transmit its secret key by employing the ones of the Public-key cryptosystem. Simultaneously, the validation of the informative integrity and authenticity have been realized by the use of information abstract algorithms. With high security, high efficiency and user-friendliness, the project achieves the file encryption with the strong extendibility of the system on the basis of the characteristics of USB security key.