Abstract: A mutual authentication method is provided for securely agreeing application-security keys with mobile terminals supporting legacy Subscriber Identity Modules (e.g., GSM SIM and CDMA2000 R-UIM, which do not support 3G AKA mechanisms). A challenge-response key exchange is implemented between a bootstrapping server function (BSF) and mobile terminal (MT). The BSF generates an authentication challenge and sends it to the MT under a server-authenticated public key mechanism. The MT receives the challenge and determines whether it originates from the BSF based on a bootstrapping server certificate. The MT formulates a response to the authentication challenge based on keys derived from the authentication challenge and a pre-shared secret key. The BSF receives the authentication response and verifies whether it originates from the MT.