A system and method for generating a disguised password are provided. The method presets a real password via an input device, selects one or more characters from the real password as a verification code. The method further generates an encryption code corresponding to the verification code according to an encryption algorithm, generates a character string based on the encryption code, and displays a verification box on a display screen to receive an input key from the input device. In addition, the method determines whether the input key matches the encryption code of the character string, and generates a disguised password by replacing the verification code with the encryption code in the real password if the input key matches the encryption code of the character string.