Transparent Data Encryption is designed to protect data by encrypting the physical files of the database, rather than the data itself. Its main purpose is to prevent unauthorized access to the data by restoring the files to another server. With Transparent Data Encryption in place, this requires the original encryption certificate and master key. It was introduced in the Enterprise edition of SQL Server 2008. John Magnabosco explains fully, and guides you through the process of setting it up. How TDE WorksTransparent Data Encryption (TDE) was introduced in SQL Server 2008, as a feature of the Enterprise Edition of that product. The Developer Edition of SQL Server 2008 also offers TDE, but its license limits its use to development and testing only. As noted above, TDE's specific purpose is to protect data at rest by encrypting the physical files of the database, rather than the data. These physical files include the database file (.mdf), the transaction log file (.ldf) and the backup files (.bak). The protection of the database files is accomplished through an encryption key hierarchy that exists externally from the database in which TDE has been enabled. The exception to this is the database encryption key, which was introduced to the database encryption key hierarchy specifically to support the TDE feature, and is used to perform the encryption of the database files. Read more: simple-talk