Abstract: In Bilaterally Generated Variable Instant Password system, Variable character sets or Master Variable Character Set with Sub Variable Character Sets of any level containing Character Units are used as means of generating Passwords. Password is a random combination of Character Units of Variable Character Set/derivatives, which is generated by a call of random numbers from SERVICE PROVIDER and corresponding response of USER. Bilaterally Generated Variable Instant Passwords and Non Repeating Bilaterally Generated Variable Instant Passwords are the two types of passwords that can be generated in this system. Font properties differentiation provides high password variability. Transformation of Variable Character Sets is also used to safeguard passwords. This system can authenticate persons, objects, individual actions initiated by USERs through separate passwords.