Short for Encrypting File System, part of the Microsoft NTFS file system. EFS is a transparent public key encryption technology that works in conjunction with NTFS permissions to grant and deny users access to files and folders in Windows NT (excluding NT4), 2000 and XP (excluding XP Home Edition) operating systems.
EFS uses a public key and a private key for encryption. If the user does not have one, the EFS generates the key pair automatically. Files can be encrypted individually, or a folder can be designated as encrypted, so that any file written to that folder is automatically encrypted. Because EFS's encryption technology integrates into the file system, users can't access the hard disk without going through the file system.