Tip 69: EFS Encrypt/Decrypt options on Explorer shortcut menu

The following registry setting will enable an EFS Encrypt and Decrypt option on the shortcut menu. Encrypt and Decrypt will be available when a user right-clicks a file or folder in My Computer.

To enable or disable the EFS options on the shortcut menu in Windows 2000 or Windows XP, use the following registry setting:

Hive: HKEY_LOCAL_MACHINE
Key: SOFTWARE\Microsoft\Windows\CurrentVersion\Explorer\Advanced
Name: EncryptionContextMenu
Type: REG_DWORD
Value: 1 enable
Value: 0 disable

Note: As always, if the required Name entry is not currently present in the registry it should be added.

For a related setting setting, look at: Enable or Disable EFS in Windows XP

This link will take you to a good MS whitepaper on EFS.