Encrypting File System (EFS) is a feature of Windows that you can use to store information on your hard disk in an encrypted format. Encryption is the strongest protection that Windows provides to help you keep your information secure.
Some key features of EFS:
Encrypting is simple; just select a check box in the file or folder's properties to turn it on.
You have control over who can read the files.
Files are encrypted when you close them, but are automatically ready to use when you open them.
If you change your mind about encrypting a file, clear the check box in the file's properties.
EFS is not fully supported on Windows 7 Starter, Windows 7 Home Basic, and Windows 7 Home Premium. For those editions of Windows, if you have the encryption key or certificate, you can do the following:
Decrypt files by running Cipher.exe in the Command Prompt window (advanced users)
Modify an encrypted file
Copy an encrypted file as decrypted to a hard disk on your computer
Import EFS certificates and keys
Back up EFS certificates and keys by running Cipher.exe in the Command Prompt window (advanced users)