Abstract: A method of dynamic password authentication used in an authentication system, in which a password generator applies a segmentation on its dynamic variable, according to predetermined segment length and positions, to produce a segment initial value and an offset for the dynamic variable. An encryption process applied on secret cryptographic key, segment initial value and offset results in the production of first dynamic cipher. Another encryption process applied on secret cryptographic key, dynamic variable etc results in the production of second dynamic cipher. Then first dynamic cipher and second dynamic cipher are combined to result in the production of a dynamic password. When a password undergoes verification executed by verifier, the verifier applies appropriate inverse processing.