In accordance with the teachings of the present invention, a system and method for bit stream compatible local link encryption are provided. In particular embodiments of the present invention, the method includes generating a random number stream using an active line count of a frame of video as an input to a first random number generator in a playback server; encrypting data at the playback server based upon a first deterministic mapping between the first random number stream and the data, wherein the first deterministic mapping prevents the generation of prohibited codes; transporting the encrypted data from the playback server to a digital video projector; generating a second random number stream using the active line count of the frame of video as an input to a second random number generator in the digital video projector; and decrypting the encrypted data at the digital video projector based upon a second deterministic mapping between the second random number stream and the encrypted data.