Abstract: An encrypted file storage solution consists of a cluster of processing nodes, external data storage, and a software agent (the “File System Watcher”), which is installed on the application servers. Cluster sizes of one node up to many hundreds of nodes are possible. There are also remote “Key Servers” which provide various services to one or more clusters. The preceding describes a preferred embodiment, though in some cases it may be desirable to “collapse” some of the functionality into a smaller number of hardware devices, typically trading off cost versus security and fault-tolerance.