A storage device contains a smart-card device and a memory device, which is connected to a controller. The storage device may be used in the same manner as a conventional smart-card device, or it may be used to store a relatively large amount of data. The memory device may also be used to store data or instructions for use by the smart-card device. The controller includes a security engine that uses critical security parameters stored in, and received from, the smart-card device. The critical security parameters may be sent to the controller in a manner that protects them from being discovered. The critical security parameters may be encryption and/or decryption keys that may encrypt data written to the memory device and/or decrypt data read from the memory device, respectively. Data and instructions used by the smart-card device may therefore stored in the memory device in encrypted form.