Mac OS X since 10.3 has had a feature called FileVault. FileVault as of Mac OS X 10.5 uses 256 bit AES to encrypt your home directory. This is particularly good if you use a laptop. If your laptop is stolen, the hard drive home directory contents are basically gibberish to someone if they attempt to read your data.
In a nut shell, simply logging in as normal to your OS X computer ‘unlocks’ your home directory. And likewise logging out or turning off your computer does the reverse. It is completely transparent and easy for all users!
Here is how to enable FileVault in OS X:
[Important: There is always one tidbit concerning drive encryption of any kind. If the drive fails, or you need drive recovery of any kind, you may have limited recovery options. Make sure you have a backup of your data elsewhere. ]
In System Preferences, click on Security.
Click the FileVault tab and then Turn On FileVault.
If you haven’t already, you will be prompted to create a master password. This is a safety net which lets you unlock any filevault accounts on the computer.
Now your computer will logout and begin the encryption. Warning: this can take several hours. It took about 3 hours on my recent OS X laptop.
Note: You can turn off FileVault at anytime in the System Preferences: