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.
EFS is not available in Windows versions 95, 98 or Me as these operating systems use the FAT16 and FAT32 file systems.