A data storage system providing transparent encryption. The data storage system has a hardware encryption/decryption engine and a register coupled to the hardware encryption/decryption engine. The register is for securely storing a key for encrypting and decrypting data. The key may not be read from outside the data storage system. More specifically, the key may not be read by the operating system. The user does not have access to the encryption key, but may have a password that is passed to a controller coupled to the encryption/decryption engine. The controller verifies the password and causes data received from main memory to be encrypted by the hardware encryption/decryption engine using the key. The controller also transfers the encrypted data to the data storage device.